- (1.) FOLLOWING question has been referred for opinion of this Court by the Tribunal, Chandigarh Bench, Chandigarh, arising "Whether, in the absence of any evidence on record to prove that the consideration of the impugned plot had been understated by the assessee with the object of avoiding or reduction of his tax liability, the Tribunal erred in law in holding that the provisions of s. 52(2) were applicable to the case of the assessee -
(2.) FACTS noticed by the Tribunal in the statement of case are : 55,755. Thus, a profit of Rs. 11,418 was shown on this transaction. The average sale price as per sq. yd. came to Rs. 45. The ITO made certain enquiries and found that the fair market value of the assets transferred by the assessee as on the date of transfer exceeded the full value of the consideration declared by the assessee in respect of the transfer of such capital assets. He referred the matter to the IAC, Central, Ludhiana, and sought his permission for action under s. 52(2) for enhancing the capital gains and tax thereon by taking the rate of Rs. 55 per sq. yd. as against Rs. 45 per sq. yd. shown by the assessee. After taking the approval of the IAC, the ITO computed the capital gains by adopting the sale consideration at Rs. 55 per yard. While determining the sale consideration being the fair market value at Rs. 55 per sq. yd., the ITO relied on the following sale transactions : Sr. Plot No. Area of plot Sale rate Registry Date No. (sq. yd.) per sq. yd. No. 1974 (ii) 10 -D 980 Rs. 62 591 -do - (iii) 47 -C 649,5 Rs. 64 -do - (iv) 31 -G 714 Rs. 63 -do - (v) 140 -H 793 33 Rs. 60 -do - 62 and Rs. 67 per sq. yd. against which he had adopted the sale rate of Rs. 55 per sq. yd. According to the CIT(A), the lower rate adopted by the ITO took care of the assessees contention of odd dimensions and also bigger area of the plot. He, therefore, confirmed the order of the ITO. The assessee preferred appeal before the Tribunal. The Tribunal for the reasons recorded in paras 9 and 10 of its order dismissed the appeal by the assessee. It has observed that the ITO had quoted the instance of sale of plots near about the time when the plot of the assessee was sold and on that basis adopted the rate of Rs. 55 per sq. yd. for sale of plot. When worked on this basis, the sale consideration which had to be considered to be the fair market value in the context of the facts stated above, gave a difference of Rs. 12,390 between the sale consideration and the fair market value as worked out by the CIT(A) in para 5 of this order. The provisions of s. 52(2) were, therefore, held to be attracted."
(3.) WE have heard learned counsel for the parties and perused the record. Sec. 52(2) of the IT Act, 1961 (for short, 'the Act'), relevant for the assessment year in question, is reproduced below : "52(2). Without prejudice to the provisions of sub -s. (1), if in the opinion of the ITO the fair market value of a capital asset transferred by an assessee as on the date of the transfer exceeds the full value of the consideration declared by the assessee in respect of the transfer of such capital asset by an amount of not less than fifteen per cent of the value so declared, the full value of the consideration for such capital asset shall, with the previous approval of the IAC, be taken to be its fair market value on the date of its transfer;" ;