Itr/56/2000 Of The Commissioner Of Incometax v. Smt.chandra Balakrishnan

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE T.R.RAMACHANDRAN NAIR WEDNESDAY, THE 16TH JANUARY 2008 / 26TH POUSHA 1929 ITR.No. 56 of 2000() -------------------- AGAINST THE ORDER IN IT(S&S)A.5/COCH/96 IN RA.231/COCH//1997 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPLICANT: ----------- THE COMMISSIONER OF INCOME TAX,COCHIN. BY ADV. SRI.GEORGE K. GEORGE, SC FOR IT SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENTS: ------------- SMT.CHANDRA BALAKRISHNAN,MURUGA NIVAS, SHORNUR ROAD,TRICHUR. BY ADV. SRI.P.BALACHANDRAN SMT.PREETHA S.NAIR THIS TAX REFERENCE HAVING BEEN FINALLY HEARD ON 16/01/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &T.R.RAMACHANDRAN NAIR, JJ. .................................................................... ....................................................................Dated this the 16th day of January, 2008. JUDGMENT C.N.Ramachandran Nair, J. The reference is at the instance of the Revenue and it is pursuant todirection of the Supreme Court in the SLP filed by Revenue againstjudgment of this court dismissing an O.P. filed under Section 256(2) of theIncome Tax Act for compelling reference of question of law. While theRevenue contended that question raised is pure question of law, counsel forthe assessee contended that the question raised arises from pure findings offact rendered by the Tribunal. However, we have considered the sameissue in I.T. Appeal Nos.6 and 18 of 1999 arising in the connected casespertaining to the company to which the assessee sold the property. Wehave held in the judgment rendered today in the connected IT appeals thatsale of the property by the respondent-assessee to the company was foractual sale price of Rs.32.5 lakhs as against Rs.18 lakhs declared in the saledeed. Therefore, following the judgment in the connected IT appealsreferred above, we reverse the order of the Tribunal and uphold theassessment whereunder capital gain is determined by taking into consideration sale price at Rs.32.5 lakhs. However, we find force in thecontention of the counsel for the assessee that the market value determinedby the Assessing Officer as on 1.4.1981 at Rs.1 lakh and refixed by theTribunal at Rs.2 lakhs is too low. In fact the property was purchased by therespondent-assessee in 1974 for Rs.65,000/-. There is no basis forassuming that the actual sale price was declared by the assessee becauseassessee was found to be suppressing sale price when the property was latersold. It is quite possible that there was suppression of purchase price in thesale deed at the time of purchase of property by the respondent-assessee.Besides this, the more important aspect is that the property was found to besold in November 1994 for Rs.32.5 lakhs. It is hard to believe that theproperty the value of which was estimated by the Tribunal at Rs.2 lakhs in1981, was sold for Rs.32.5 lakhs in the course of 13 years. It is commonknowledge that the property price started increasing in a very unprecedentedmanner in the State only for the last 3 to 4 years. Price of immovableproperty, though has been steadily growing, the unprecedented level ofincrease is only a recent phenomenon. Therefore, we feel the price fixed bythe Tribunal as on 1.4.1981 for the purpose of determination of capital gainsis too low. We, therefore, set aside this part of the order of the Tribunaland refer the matter to the Tribunal for refixation of market value as on 1.4.1981 for determination of capital gains. The Tribunal is directed to decide the matter afresh within a period of three months from the date ofreceipt of copy of this judgment. The Income Tax Reference is accordinglydisposed of answering the question referred in favour of the Revenue andagainst the assessee. 1.4.1981 for determination of capital gains. The Tribunal is directed to decide the matter afresh within a period of three months from the date ofreceipt of copy of this judgment. The Income Tax Reference is accordinglydisposed of answering the question referred in favour of the Revenue andagainst the assessee. A copy of this judgment under the seal of the High Court andsignature of the Registrar shall be forwarded to the Income Tax AppellateTribunal, Cochin Bench. C.N.RAMACHANDRAN NAIRJudge pms T.R.RAMACHANDRAN NAIRJudge