1990 (4) TMI 112

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....short frontage and a long depth tapering towards the interior. The land itself was sub-divided into four plots, one behind the other, the first floor being retained by the assessee, the second plot of 5.25 grounds being given to an other subsidiary on 15-7-1974, the third plot being the property in dispute and the last plot being retained by the assessee. The property in question was 10.66 grounds which was transferred by a deed dated 10-4-1975 by the assessee to the wholly owned subsidiary company for a consideration of Rs. 4,20,000. Though the document itself states that the market value according to the Government guide lines for the purposes of stamp duty was Rs. 8,48,000, no stamp duty was paid since the document was exempt under the S....

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.... in aggregation. On the other hand, it was contended on behalf of the revenue that since the consideration shown in the document was less than the market value according to the guidelines and the assessee and wholly owned subsidiary company were separate juridical entities, there was a transfer without adequate consideration which resulted in a deemed gift which had to be brought to tax. 4. On a consideration of the rival submissions, we are of the opinion that the assessee is entitled to succeed. Under section 4(1)(a) of the Gift-tax Act, where a property is transferred otherwise than for adequate consideration, the amount by which the market value of the property at the date of the transfer exceeds the value of the consideration shall ....

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....00 per ground. According to the revenue, this shows that the valuation was an understatement. But it was stated that the assessee had taken a valuer's report from a qualified architect on the basis of which the value was adopted which shows that it was a bona fide valuation, particularly when that has taken into account various distinguishing features of this land such as its being further away from Mount Road with a narrower width and also being burdened with a tenancy. These factors we consider were relevant in depressing the value. 6. There is a letter of the Central Board of Direct Taxes dated 27-2-1969 declaring that the provisions for assessing deemed gift were not intended to be applied to bona fide transactions. In this context, ....