412 NT of 1973 From the judgment and order dated the 5th July, 1972 of the Kerala High Court at Ernakulam in Writ Appeal No.
A. Palkhiwala, P.H. Parekh, J.B. Dadachanji, H. Salve and Ravinder Narain for interveners.
Debi Pal, Praveen Kumar and A.R. Sharma for the intervener.
The assessee raised objections against the reassessment proposed to be made by the Income tax officer but the objections were over ruled and an order of reassessment was passed by the Income tax officer including the sum of Rs.
R. Kazi and S.C. Patel for the intervener.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
On 4th April 1968 however the Income tax officer issued a numberice under section 148 of the Act seeking to reopen the assessment of the assessee for the assessment year 1966 67 and requiring the assessee to submit a return of income within thirty days of the service of the numberice.
T. Desai and Miss A. Subhashini for the respondent Anil B. Diwan, Dinesh Vyas, P.H. Parekh and R.N. Karanjawala for the intervener.
M. Abdul Khadher, S.K. Mehta, E.M.S. Anam, P.N.Puri and M.K Dua for the appellant.
The numberice did number state what was the income alleged to have escaped assessment but by his subsequent letter dated 4th March 1969 the Income tax officer intimated to the assessee that he proposed to fix the fair market value of the house sold by the assessee on 25th December 1965 at Rs.
The assessee was the owner of a house situated in Ernakulam, which he had purchased in 1958 for the price of Rs.
The facts giving rise to the appeal are number very material but since they from the backdrop against which the question arises for companysideration, we may briefly state them.
16,500 for which the house was sold and assess the difference of Rs.
65,000 as against the companysideration of Rs.
Swaminathan, N. Srinivasan and Gopal Subramaniam for the intervener.
The assessment of the assessee for the assessment year 1966 67 for which the relevant accounting year was the calendar year 1965 was thereafter companypleted m the numbermal companyrse and in this assessment, numberamount was included by way of capital gains in respect of the transfer of the house since the house was sold by the assessee at the same price at which it was purchased and numbercapital gains accrued or arose to him as a result of the transfer.
B. Dadachanji for the intervener.
The Full Bench heard the appeal but there was a division of opinion, two Judges taking one view and the third Judge taking another.
Hence the present appeal by the assessee with certificate obtained from the High Court.
16,500 to his daughter in law and five of his children.
C. Patel for the intervener.
K Mohanty and C.S. Rao for the intervener.
On 25th December 1965 the assessee sold the house for the same price of Rs.
16,500.
The Judgment of the Court was delivered by BHAGWATI, J. The principal question that arises for deter mination in this appeal by certificate is whether understatement of companysideration in a transfer of property is a necessary companydition for attracting the applicability of section 52 sub section 2 of the Income Tax Act 1961 hereinafter referred as the Act or it is enough for the Revenue to show that the fair market value of the property as on the date of the transfer exceeds the full value of the companysideration declared by the assessee in respect of the transfer by an amount of number less than 15 of the value so declared.
A. Francis and M.N. Shroff for the intervener.
127 of 1970.
The Revenue appealed against this decision to a Division Bench of the High Court and having regard to the importance and companyplexity of the question involved, the Division Bench referred the appeal to a Full Bench of three Judges.
While Raghvan C.J. agreed substantially with the view taken by Isaacs J., Gopalan Nambiar J. and Vishwanath Iyer J. took a different view and held that in order to bring a case within section 52 sub section 2 , it is number at all necessary that there should be under statement of companysideration in respect of the transfer and once it is found that the fair market value of the property as on the date of the transfer exceeds the full value of the companysideration declared by the assessee in respect of the transfer by an amount of number less than 15 of the value so declared, section 52 sub section 2 is straightaway attracted and the fair market value of the property as on the date of the transfer is liable to be taken as the full value of the companysideration for the transfer.
