High Court Of Rajasthan : Jaipur Bench
CIT vs. Prithviraj Maheshwari
Sections GT 16(1)(a)
Y.R. Meena & K.C. Sharma, JJ.
GT Ref. No. 61 of 1987
8th April, 2003
Counsel Appeared
Anuroop Singhi for J.K. Singhi, for the Revenue : V. Bhojwani with Sunil Bhojwani, for the Assessee
JUDGMENT
BY THE COURT :
On an application under s. 26(1) of the GT Act, the Tribunal has referred the following question for our opinion : “Whether, on the facts and in the circumstances of the case, the Tribunal was justified in quashing reassessment proceedings taken by the GTO.”
2. The assessee had sold 49.50 Bighas of land on 1st July, 1972. No return of gift was filed by the assessee. However, the GTO later on had the opinion that the assessee had sold land to persons closely related to him at a very nominal rates which was much below the market value and as such, the difference between the market value and the actual price at which the land has been sold is a deemed gift.
3. The case of the assessee was that assessee had disclosed all material facts before the AO and after disclosing the necessary facts regarding sale of the agricultural land in question, some queries were also sought by the AO. He replied those queries made in the letter of the AO and after considering the explanation and facts given by the assessee, no addition was made in the assessment order in income-tax proceedings. The GTO in gift-tax proceeding was not satisfied with the claim of the assessee. He estimated the fair market value of the land at Rs.5,000 per Bigha and brought to tax the deemed gift at Rs. 2,15,400.
4. In appeal before the CGT(A), he has reviewed the estimated market value of the land on the date of sale at Rs.75,000 and directed the GTO to recompute the gift taking value of the land at Rs. 75,000.
5. In appeal before the Tribunal, the Tribunal has estimated the value of the transferred land at Rs. 1,00,000 but in the opinion of the Tribunal as there was no concealment of fact within the meaning of s. 16(1)(a) of the GT Act, the assessment can be made within 4 years if he has any information in his possession, from the end of that assessment year and he cannot assess that deemed gift after expiry of 4 years. Admittedly, here notice has been issued after expiry of four years, when assessee has disclosed all basic material facts, there is no question of assessing after 4 years from the end of assessment year. Therefore, he quashed the assessment order made after notice under s. 16(1) of the Act.
6. Mr. Singhi, learned counsel for the Department, submits that as the value of the transferred agricultural land has been taken at Rs. 1,00,000 finally by the Tribunal and assessee has shown the amount of sale at Rs. 34,600, at least difference between Rs. 1,00,000 and Rs. 34,600 should be taken as deemed gift and that be taken as assessee has not disclosed truly and fully material facts, Therefore, assessment can be made after expiry of 4 years from the end of that assessment year, in accordance with law.
7. Mr. Bhojwani submits that in the income-tax proceedings various queries were raised regarding sale of some 50 Bighas of agricultural land and after considering the reply of the assessee, no addition was made. He further submits that the ITO, GTO and WTO is one and the same officer and when the value disclosed has been accepted in the income-tax proceedings, there is no justification to assess the assessee on deemed gift for the same transaction taking higher value of the same land.
8. Clause (a) of sub-s. (1) of s. 4 of the GT Act, 1958 provides for the deemed gift. Under that provision if any 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 be deemed to be a gift made by the transferor.
9. The facts are not in dispute that no gift-tax returns were filed. In the income-tax proceedings, the assessee has disclosed this transaction of the land and ITO who also happens to be the GTO has made some queries vide his letter dt. 21st Aug., 1975, which are replied by the assessee vide his letter dt. 12th Sept., 1975, and after seeing the reply, the ITO was satisfied regarding the genuineness of the transaction as also value of the sale proceeds and no addition has been made.
10. When after seeing the reply of the queries raised regarding transaction, no addition was made in income-tax assessment, there is no justification in the gift-tax proceedings, after referring the matter to the Valuation Officer, to estimate the value of that agricultural land at higher amount.
11. Once the assessee has declared fully and truly all material facts for the assessment of that transaction, in our view, there is no justification to disturb that value in the gift-tax proceedings which has been accepted by the same AO in the income-tax proceedings. Considering these facts, no interference is called for in the order of Tribunal.
12. In the result, we answer the question in affirmative i.e., in favour of the assessee and against the Revenue. The reference so made stands disposed of accordingly.
[Citation : 266 ITR 402]
