TaxTMI 
TaxTMI 
1983 (11) TMI 134
X X X X Extracts X X X X
X X X X Extracts X X X X
....43 (2) (b) with the prior approval of the IAC. The ITO in the assessment made pursuant to section 143 (2) (b) took note of the sale of a property on 23rd August, 1976 at Rs. 1,05,000, considered that this was below the fair market value of the property and applied the provisions of section 52 (2) of the Income-tax Act, 1961. He relied on the decision of the Kerala High Court in the case of ITO v. K.P. Varghese (1973) 91 ITR 49 (Ker.). The contention of the assessee on the validity of the action of the ITO under section 143 (2) (b) is based upon the decision of the Supreme Court in the case of K.P. Varghese v. ITO (1981) 131 ITR 597 (SC) whereby the decision of the Kerala High Court in (1973) 91 ITR 49 (Ker.) was reversed. It was contended t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 143 (2) (b) where a return has been made under section 139 and whether or not an assessment has been made under sub-section (1) of section 143, if the ITO considers it necessary, or expedient to verify the correctness and completeness of the return by requiring the presence of the assessee or the production of evidence in this behalf, the ITO shall serve on the assessee a notice under section 143 (2) after obtaining the prior approval of the IAC. At the time the ITO resorted to this provision the decision of the Kerala High Court in K.P. Varghese's case governed the question and therefore, with the fact enumerated in the note appended to the return, the ITO was well within the his rights to resort to this provision. This point raised by....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Rs. 82,025 ---------- Capital gains was taken at the difference of Rs. 82,025. He did not take into account the investment in the incomplete structure. 4. The AAC accepted the plea of the assessee based upon the decision of the Supreme Court in the case of K.P. Varghese v. ITO (1981) 131 ITR 597 (SC). He held that the provisions of section 52 (2) will not apply and, therefore, the sale consideration as shown in the document has to be adopted. He computed ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....4,125 as capital gains. The assessee objects to this mode of computation of the ground capital gains. We consider that this objection is quite valld. The assessee had claimed the cost of the super- structure at Rs. 90,000. No doubt, the assessee has not been able to establish this cost of the super structure to him. Nevertheless the working of the AAC fixes the cost of super structure at only Rs. 66,400. The Valuation Officer himself had worked out the value of the super structure on the date of sale at Rs. 76,756. It is possible that the value of the land might increase from time to time. But the same cannot be said of the structure on the land which would definitely depreciate in value with the passage of time. The market value fixed by t....