Law:

Section:

Section 52 of the income-tax act, 1961-Capital gains-Transfer in case of under-statement-Assessment year 1968-69-Assessee on 1-9-1967 sold its property to a partnership (whose partners were near relations of assessee) for consideration of Rs. 2,50,000-ITO estimated fair market value on 1-1-1954 at Rs. 2,45,538 and at date of sale at Rs. 3,50,000 and determined capital gains at Rs. 1,06,462-AAC upheld ITO's order-Whether tribunal right in holding that sub-section (1) or (2) of section 52 did not apply and assessee not liable to pay impugned capital gains tax under section 45 read with section 52(2)-Held, on facts, yes Facts During the assessment year 1968-69, in relation to the accounting year ended 31-3-1968, the assessee sold, on 1-9-1967, one of her properties, together with the furniture and fittings, to a partnership firm (whose partners were near relations of the assessee) for a consideration of Rs. 2,50,000. The ITO estimated the fair market value of the property on 1-1-1954 at Rs. 2,43,538 and on the date of sale by the assessee at Rs. 3,50,000. The ITO determined the capital gain chargeable to tax under section 45 at Rs. 1,06,462 and opined that the provisions of sub-sections (1) and (2) of section 52 were both applicable. On appeal, the AAC upheld the ITO's order. On further appeal, the Tribunal concluded that its fair market value on the date of sale was Rs. 3,00,000 and, accordingly, accepted its fair market value on 1-1-1954 at Rs. 2,45,538. It, however, held (0 that there was no evidence or material to establish that there was any understatement of consideration by the assessee, or that the assessee received higher offer for purchase but did not accept them, or that the impugned transfer was effected with the object of avoidance or reduction of liability to capital gains; and (ii) that neither sub-section (1) nor sub-section (2) of section 52 was applicable. It, accordingly, deleted the amount of capital gain of Rs. 1,06,462 from the assessment. On reference: Held 1. For applicability of section 52(1), two things are necessary (i) the person acquiring the capital asset from the assessee should be directly or indirectly connected with him; and (ii)…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492