Commissioner of Income Tax vs Basudeoprasad Budhna

Sujata V. Manohar, J.—This reference pertains to the asst. yr. 1967-68. The following question has been referred to us for determination u/s 256(1) of the IT Act, 1961 :

"Whether, on the facts and in the circumstances of the case, the difference of Rs. 80,000 between the fair market value of Rs. 1,50,000 estimated by the Tribunal for the shares transferred and the consideration shown to have been received by the Tribunal for the shares transferred and the consideration shown to have been received by the assessee from his wife of Rs. 70,000 was liable to be taken into account in computing capital gains chargeable to tax u/s 45 of the Act by invoking the provisions of s. 52(2) of the Act ?"

This is an accepted position that in view of the decision of the Supreme Court in the case of K.P. Varghese Vs. Income Tax Officer, Ernakulam and Another, the question before us must be answered in the negative, that is to say, in favour of the assessee and against the department.

There will be on order as to costs.