TaxTMI 
TaxTMI 
1991 (9) TMI 354
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...., the concept of market value is hypothetical one while for the purpose of section 52 one has to consider the sale price actually fetched on the transfer of the capital assets. 3. The view taken and reasonings relied on by the learned Commissioner of Income- tax (Appeals) for upholding the applicability of section 52(2) are erroneous, unsound and unwarranted by the facts and material on record. 4. On the facts, circumstances, evidence and material on record both the conditions as envisaged by 52(2) are lacking insofar as there is nothing to show much less to prove that the market value of items sold were much more than selling price obtained and secondly there was any under hand dealing between the parties and the assessee has actually received much more money than shown by way of selling price, the action of learned Commissioner of Income-tax (Appeals) in upholding the applicability of section 52(2) is erroneous, misconceived and untenable in law. 5. For upholding the applicability of section 52(2), the reliance placed by the learned Commissioner of Income-tax (Appeals) on the order of the CIT(A) in the case of Shri Rampati Singhania by presuming that th....
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....nt 7 10 0 2. Ear Rings one pair 1 8 0 (iii) Diamond and Emerald Studded ornaments: 1. Necklace 5 0 0 2. Pair Kundan 3 8 0 3. Mang Tika 1 4 0 (iv) Diamond Studded ornaments: 4. Bangles 4 0 0 The value of the jewellery was estimated at Rs. 1,50,000 in the wealth-tax assessment for the assessment year 1977-78 by the learned CWT(A) in the appeal filed by the assessee. Most of the jewellery was sold in August, 1979 for Rs. 72,000. Four items of the said jewellery were not mentioned in the alleged sale bill. They were as follows:- 1. One diamond and ruby studded Broach. 2. Diamond & Emerald studded one pair of Kundan. 3. Diamond & Emerald studded one Mang Tika. 4. Diamond studded, four bangles. It was alleged by the assessee vide his letter dated 5th September, 1983, addressed to the IAC (Central) Range-II, Bombay (copy of which has been filed in the compilation at pages 4 and 5) that the said four items could not be located by the assessee when he was called upon to produce the same before the Government Valuation Officer in 1981. H....
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.... transfer is shown at lesser figure than that actually received by the assessee, and the burden of proving such under-statement of concealment is on the revenue. The sub-section has no application in case of an honest and bona fide transaction where the consideration received by the assessee has been correctly declared or disclosed by him. 5. It has been further argued by the learned counsel for the assessee that in this case no effort has been made by the Revenue to discharge the said onus. The only circumstances shown by the Department is that these ornaments were valued at Rs. 1,50,000 as back as in 1977-78 in the wealth-tax assessment of the assessee and thus normally it must have been of higher value in 1980-81. The other circumstance taken is that in the case of the brother of the assessee, who had received and other 50% of the jewellery from his mother, the finding of capital gains tax was upheld by the learned CIT(A). He has tried to distinguish both the facts, firstly, regarding the valuation in wealth-tax. He has stated that the said value in generally an estimate and not the actual valuation and secondly, the sale was not of the entire ornaments but the four items men....
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....f her mother. It is also admitted that all of a sudden his father died soon after the sale. The sale was also effected by the father of the assessee-In Indian Hindu families it is not very uncommon that when father is alive, it is he who manages the whole show and if all of a sudden he dies, then it becomes very difficult for the minor sons to know, control and manage the whole show of the family including that of the jewellery. Thus, as a natural corollary, it cannot be said to be unnatural or improbable that some ornaments might have been misplaced somewhere and the statement of the assessee on that score cannot be completely disbelieved. Hence, from this very fact of the wealth-tax assessment, a positive inference cannot be drawn that the sale price has been understated. 8. As regards the second point that in the case of the assessee's brother, assessment of capital gains was framed and the same was confirmed by the learned CIT(A). That too, in our opinion, does not much help the revenue or goes against the assessee. Facts of each case are independent and cannot lead to conclude the same inference as that of the other. Admittedly, the payment in the case of his brother was re....
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....ed the re-assessment. In special appeal, filed by the assessee, the Hon'ble Supreme Court held that sub-section (2) of section 52 can be invoked only where the consideration for the transfer has been under-stated by the assessee or, in other words, the consideration actually received by the assessee is more than what is declared or disclosed by him and the burden of proving such an under-statement or concealment is on the revenue. This burden can be discharged by the revenue by establishing the facts and circumstances from which the reasonable inference can be drawn that the assessee has not correctly declared or disclosed the consideration received by him and there is an under-statement or concealment of the consideration in respect of the transfer. Sub-section (2) has no application in the case of an honest and bona fide transaction where the consideration received by the assessee has been correctly declared or disclosed by him and there is no concealment or suppression of the consideration. Consequently, the Hon'ble Supreme Court set aside the assessment order holding that in their opinion there was no evidence in the said case that the assessee had received more amount than the....