TaxTMI 
TaxTMI 
1974 (5) TMI 16
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....l (hereinafter called " the assessee "), is a Hindu undivided family of which Shri Chanan Ram was the karta during the assessment year 1963-64, to which year these petitions relate. By a registered sale deed dated June 14,1962, he sold on behalf of the Hindu undivided family as its karta the gram dal and cotton ginning factory at Dabwali to the Mandi Dabwali Haryana Handmade Paper Chemicals and General Works production-cum-sale Co-operative Industrial Society Limited, Dabwali, for Rs. 1,31,400. When the Income-tax Officer asked the assessee to furnish the details of the total cost of the assets transferred by means of the registered sale deed dated June 14, 1962, for the purpose of arriving at the capital gains, if any, the assessee flatly ....
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....apital gains had accrued to the assessee and, therefore, no assessment could be made. This plea was not accepted by the income-tax authorities on the ground that the transactions had been made through a registered sale deed and it could not be ignored and had to be given effect. Another plea raised by the assessee was that the plot of land had been purchased in 1938 for Rs. 1,200 and its price was to be taken as at January 1, 1954, in accordance with section 55(2) of the Income-tax Act, 1961, (hereinafter called " the Act "). That price on January, 1 1954, was Rs. 37,500 and the value of other assets, that is, building and plant, was Rs. 82,500. The total cost of the plot and the assets transferred, vide sale deed dated June 14, 1962, wa....
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....elating to the cost to be deducted from the sale price in order to arrive at the net capital gain ? 6. Whether, on the facts and in the circumstances of the case, the Tribunal was legally right in coming to the conclusion that Rs. 10,000 in the account of Smt. Shanti Devi, married daughter of Shri Chanan Ram, was the income of the applicant from undisclosed sources ? 7. Whether the decision on the issue raised in paragraph 4 is not vitiated for the reason that the relevant evidence produced before the authorities below had not been considered ? " The Tribunal rejected that application and that is why this petition under section 256(2) of the Act has been filed by the assessee. It is apparent from the orders of the Income-tax Off....
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....s is in accordance with section 55(2)(i) of the Act. For the reasons given above, we allow this petition and direct the Income-tax Appellate Tribunal to draw up the statement of the case and to refer the following two questions of law to this court for decision. 1. Whether it is open to the assessee to prove that the sale transaction evidenced by a registered sale deed was a sham transaction and no sale in fact took place ? 2. Whether the amount of capital gains liable to assessment has been correctly computed in accordance with the provisions of section 55(2) of the Income-tax Act, 1961 ? The parties are, however, left to bear their own costs. I.T.C. No. 41 of 1973. The Income-tax Officer imposed penalty on the assessee u....