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REGISTERED NO. D. 221

The Gazette of India

EXTRAORDINARY

PART II—Section 2

PUBLISHED BY AUTHORITY

No. 31] NEW DELHI, WEDNESDAY MAY 10, 1972/VAISAKHA 20, 1894

Separate paging is given to this Part in order that it may be filed as a separate compilation.

LOK SABHA

The following Report of the Select Committee on the Bill further to amend the Income-tax Act, 1961, the Wealth-tax Act, 1957 and the Gift-tax Act, 1958 was presented to Lok Sabha on the 10th May, 1972: —

COMPOSITION OF THE COMMITTEE

Shri Bhagwat Jha Azad—Chairman

MEMBERS

2. Shri Virendra Agarwala

3. Shri K. Baladhandayutham

4. Shri Chhotey Lal

5. Chaudhry Dalip Singh

6. Shri Anandi Charan Dasi

7. Shri K. R. Ganesh

8. Shri H. R. Gokhale

9. Shrimati V. Jeyalakshmi

10. Shri Chiranjib Jha

11. Shri Dinesh Joarder

12. Shri A. Kevichusa

13. Shri K. Mallanna

(347)

14. Shri Nageshwararao Meduri

15. Shri Piloo Mody

16. Shri Tarkeshwar Pandey

17. Shrimali Sahodrabai Rai

18. Chowdhury Ham Scwak

19. Shri Ram Surat Prasad

20. Shri Birender Singh Rao

21. Shri P. Narasimha Reddy

22. Shri Mulki Raj Saini

23. Shri N. K. P. Salve

24. Shri S. C. Samanta

25. Shri Era Sczhiyan

26. Shri Shco Pujan Sha-itri

27. Shri Satyandra N. Sinha

28. Shri T. Sohan Lai

29. Shri V. Tulsiram

30. Shri Y. B. Chavan

LEGISLATIVE COUNSEL

1. Shri K. K. Sundaram, Joint Secretary and Legislative Counsel.

2. Shri P. B. Venkatasubramanian, Joint Secretary and Legal Adviser,

3. Shri R. V. S. Peri-Sastri, Additional Legislative Counsel.

4. Shri S. Ramaiah, Deputy Legislative Counsel.

KEPRESENTATIVES OF THE MINISTRY OF FINANCE (DEPARTMENT OF REVENUE

AND INSURANCE)

A. Shri B. D. Pande, Secretary.

2. Shri R. D. Shah, Ctairman (CBDT) and Additional Secretary.

3 Shri K. E. Johnson, Member {WTikA) and Joint Secretary.

4. Shri M. B. Palckar, Memln-T (I.T.) and Joint Secretary.

5. Shri R. R. Khosla, Secretary, Central Board of Direct Taxes.

6. Shri O. P. Bhardwaj, Secretary, Central Board of Direct Taxes.

7. Shri Balbir Fingh, Secretary, Central Board of Direct Taxes.

SECRETARIAT

Shri P. X. Patnaik—Joint Secretary.

Shri H. G. Paranjpe- -Deputy Secretary.

REPORT OF THE SELECT COMMITTEE

1. the Chairman of the Select Committee to which the *Bill further to amend the Income-tax Act, 1961, the Wealth-tax Act, 1957 and the Gift-tax Act, 1958 was referred, having been authorised to submit the Report on their behalf, present their Report with the Bill, as amended by the Committee, annexed thereto.

2. The Bill was introduced in Lok Sabha on the 12th August, 1971. The motion for reference of the Bill to a Select Committee was moved in the House by Shri Y. B. Chavan, Minister of Finance on the 17th November, 1971 and was discussed and adopted on the same day.

3. The Committee held 13 sittings in all.

4. The first sitting of the Committee was held on the 23rd November, 1971 to draw up their programme of work. The Committee decided to take evidence of the Constitutional experts and the experts in the field of taxation law, accountancy and valuation of property.

5. 15 memoranda|representations|notes on the Bill were received by

the Committee from different individuals/associations etc.

6. At their 2nd, 3rd, 4th, 5th and 6th sittings held on the 7th, 8th, 20th, 21st and 22nd December, 1971 respectively, the Committee heard the evidence given by the individuals/Federations etc.

7. At their 7th and 8th sittings held on the 24th and 28th January, 1972, respectively, the Committee had a general discussion on the con- stitutional validity of the Bill and also heard the views of the Minister of Law and Justice (Shri H. R. Gokhale) in this regard.

8. The Report of the Committee was to be presented by the 15th December, 1971. The Committee felt that in view of the important na- ture of the Bill it would not be possible to complete the various stages of the Bill within the specified time and as such decided to ask for an extension of time for the presentation of their Report upto the last day of the first week of the Budget Session (1972). Necessary motion to that effect was moved in the House and adopted on the 10th December, 1971.

At their 8th sitting held on the 28th January, 1972, the Committee had decided to sit and take up clause-by-clause consideration of the Bill some time in March, 1972. But due to pre-occupation of most of the members of the Committee with the elections to some State Assemblies and Union territories held in early March, 1972, the Committee could hold their 9th siting only on the 15th March, 1972. At this sitting, the Commute*

*Published in the Gazette of Trciin. Fxirarrrlinary. Part II, Section 2. ctat

the 12th August 1971.

felt that as the time loft lor presentation oi' thoh Report was very short, it would not be possible for them to complete the various stages of the .Bill by the stipulated date and as such decided to seek further exten- sion of time upto the 10th May, 1972. Necessary motion in this behalf was moved and adopted in the House on the 17th March, 1972.

9. The Committee have also decided that the evidence given before them should be printed and laid on the Table of the House.

10. The Committee considered the Bill clause-by-clause at their 10th, 11th and 12th sittings held on the 3rd, 5th and 18th April, 1972 respec- tively.

11. The Committee decided that a set of memoranda[representations| notes etc. submitted by various essociatJons|individuals|Federations etc. should be placed in Parliament Library for reference by members.

12. The Committee considered and adopted the Report on the 5th May, 1972.

13. Th>e observations of the Committee with regard to the principal changes proposed in the Bill are detailed in the succeeding paragraphs.

14. Clause 2, 10 (original clause 9) and clause 21 (original clause 20).—

These clauses seek to amend respectively the Income-tax Act, the Wealth- tax Act and the Gift-tax Act ^o make provisions therein for reference of he valuation of any capital asset, asset or property to a valuation offi- cer. The Committee feel that to avoid arbitrariness on the part of the tax authorities making such references, it is desirable to spell out the guidelines on the basis of which such references may be made. The Committee recommend that for this purpose, a distinction should be made between cases in which the valuation is based on the estimate of a re- gistered valuer and cases in which it is not so based. In the first cate- gory, of cases, a reference may be made to the valuation officer if the tax authority considers that the estimate made by the registered valuer requires an upward revision. In the second category of cases, a refe- rence may be made if the tax authority considers it necessary to do so on account of the nature of the capital asset, asset or property and other relevant circumstances, or if he H of opinion that the fair market value Wi the capital asset, asset or prpperty exceeds the value claimed or re- turned by such percentage of the claimed or returned value or by such amount as may be prescribed by rules. New section 55A, as proposed to be inserted in the Income-tax Act by clause 2 of the Bill, sub-section (1) of new section 16A, as proposed to be inserted in the Wealth-tax Act by clause 10 of the Bill and row sub-section (6) as proposed to h^ inserted in section 15 of the Gift-t'ix Act by clause 21 of the Bill, have been amended accordingly.

15. Clause 4.—The Committee hive made certain amendments to this clause as explained below :—

(1)Section 269A— SEC. 2] THE GAZETTE OF INDIA EXTRAORDINARY 351

by paying the consideration for the transfer of such property partly in cash and partly in kind or wholly in kind. The Committee, therefore, feel that the transfer of immovable pro- perty by way of exchange must also be brought within the the ambit of the provis'ons of the Bill. Accordingly, the defi- nition of the expression "transfer" has been amended so as to include transfers by way of exchange also.

As a consequence thereof, the existing definition of the expression "apparent consideration" has also been amended so as to include con- sideration for transfers by way of exchange as well.

Clause (e).—The Committee feel that the proposed definition of the expression "immovable property" is too narrow in its scope. In order to ensure that the provisions relating to acquisition of immovable property are not defeated bv transfer of a part of a building or by composite transfers of land, building, plant and machinery etc., the definition should be enlarged so as to cover part of a building or any rights therein and should also include machinery, plant, furniture, fittings or other things where such machinery, plant etc., is transferred along with any land or building or part of a building.

The definition of the expression "immovable property" has, therefore, been amended accordingly.

The Committee in principle accepted that it was essential to bring within the ambit of this legislation transfers of flats in the buildings own- ed by the Housing Co-operative Societies. It would otherwise leave a large loop-hole in the law. It was, however, pointed out to the Com- mittee that in case of Housing Co-operative Societies it is net the flats which are sold or transferred as such. It is usually the shares in the Co-opperative Societies which are transferred: the right of ownership of shares being virtually the right of ownership of the flats. Since, however, transfers of shares do not require registration and the entire legislation rests on registration as the starting point, the flats of Housing Co-opera- tive Societies are left out for the time being.

The Committee, therefore, recommend that the Registration Act and other relevant laws should be amended to treat transfers of shares of Housing Co-operative Societies as immovable property requiring regis- tration on transfer-

New claus? (q).—The Committee note that the expression "person in- terested" occurs in the proposed sections 269DC2)(a) and 269EO) of the Bill. The Committee feel that a definition of the expression so as to in- clude all persons claiming or entitled to claim an interest in the compen- sation payable on account of the acquisition of that properfv under the provisions of the Bill, ma? be added. A definition of the expression "person interested" has therefore, been added accordinglv.

(ii) Section 269C—The Committee feel that while .safeguards should be provided f<">r ensuring that t)OW6f3 of acquisition are not misused, special rules nf evidence =hoiild be provided to ensure effective operation of the law. Bv w"v of safefn^rds. the Committee rp^ommend t.h 352 THE GAZETTE OF INDIA EXTRAORDINARY [PART II—

exceeds its apparent consideration by more than fifteen per cent of such consideration.

The Committee have given anxious consideration to the question as to whether any special rules of evidence should be provided for. As tax evasion and dealings in black money take place in an utterly clandestine manner, the Committee feel that unless special rules of evidence are made applicable, it will not be possible to deal effectively with the evils of tax evasion and black money. The Committee accordingly recom- mend that the fact that the fair market value of any property transferred exceeds its apparent consideration by more than twenty-five per cent of such apparent consideration shall, in proceedings for acquisition of such property, be deemed to be conclusive proof of the fact that the considera- tion for the property has not been truly stated in the instrument of trans- fer. The Committee also recommend that the rebuttable presumption provided in section 269F(8)(a), namely, that where any property has been transferred for an apparent consideration which is less than its fair market value, it shall be presumed that the consideration for the transfer has not been truly stated with the object of evasion of tax, should apply at all stages of the acquisition proceedings and not merely at the stage of passing the order of acquisition.

Clause 269C has been amended to provide for the aforementioned

safeguards and special rules of evidence.

(iji) Section 269D.— (a) The Committee recommend that the period of limitation for initiating proceedings for acquisition of any property should be computed from the end of the month in which the instrument of transfer is registered as that would enable parties to compute the period of limitation with certainty and avoid unnecessary anxiety. Pro- viso to sub-section (1) has been amended accordingly-

With a view to avoiding delays in registration and the consequent postponement of the running of the period for initiation of acquisition proceedings, the Committee recommend that Government might exa- mine the feasibility of amending the Registration Act, 1908, for fixing a time-limit within which documents should be registered thereunder.

(b) The Committee feel that notice of initiation of acquisition proceed- ings should be served on the transferor also as he is a party to the trans- fer. Sub-section (2) (a) has been amended accordingly.

(iv) Section 269E.-—The Committee feel that the period of limitation for filing objections is not adequate. The Committee recommend that in the case of persons on v/hom notice of initiation of proceedings is requir- ed to be served, it should be forty-five days from the date of publication of the notice in the Official Gazette or thirty davs from the date of ser- vice of notice, whichever period expires later. In other cases, it should be forty-five days from the date of pubHcation of the notice in the Official Gazette. Sub-section (1) has been amended accordingly.

The Committee recommend that in place of eub-section (3"i. which has become redundant in vie'"' of thp^r recommendation for inserting a defini- tion nf 'person interested' m "e<-ti-on 2p0A. a new sub-sp'-tion should be substituted. The n"w snb-sect^r. ^houlr] make it clear that nhipr-tion can be mad^ '-orW the section to the pffpot thQ.t the fair market value of anv property sought to he acquired does no+ exceed its apparent consideration by more than 25 per cent of such apparent consideration and that there*

fore the special rule as to conclusive proof provided in section 269C(2)(a) does not apply.

(v) Section 269F [Sub-section (2)].~-The amendment made in sub- section (2) is of a drafting nature and is consequent upon the addition of new section 2690.

Sub-section (6).—The Committee are of the; opinion that it should be made clear that the competent authority should make an order for acquisition only after hearing the objections, if any, and after taking into account all the relevant material on record. The opening portion of the sub-section has been amended accordingly- The amendment made in clause (b) of the sub-section is consequent upon the second proviso added to section 269C(1). The amendments made in clause (c) of the sub-section are of a drafting nature.

New sub-section (8).—The Committee recommend that orders of the competent authority in respect of any property should be served on the transferor, transferee and the persons who preferred objections against the acquisition of such property. A new sub-section (8) has been added accordingly, and the existing sub-section (8) has been renumbered as sub- section (9).

Subsection (9) [original subsection (8)].—The amendments made are of a consequential or drafting nature. Clause (a) of this sub-section has been omitted in view of the provision made in clause (b) of sub- section (2) of section 269C.

(vi) Section 2G9G and section 269H {original section 269G).—The Committee feel that appeals against the orders of the competent authority should lie not to an administrative body as provided in the Bill, but to a judicial forum. The Committee feel that it would be patently unfair and unreasonable if a person who has a right to go in appeal to a judicial forum, namely, the Income-tax Appellate Tribunal against an order of assessment for even a comparatively small amount is denied a right of appeal to such a forum against an order for acquisition of property of substantial value. The Committee,therefore, recommend that appeals against the orders of the competent authority should lie to the Income- tax Appellate Tribunal. The Committee, however, feel that the proce- dure of making reference to High Court on questions of law arising out of the orders of the Appellate Tribunal in assessment cases results in delays and is not suited to the acquisition cases. The Committee, there- fore, recommend that in acquisition cases, the parties concerned should be given a right to prefer directly an appeal to the High Court on any question of law against the orders of the Appellate Tribunal.

Two new sections—(section 269G and section 269H), providing for appeals to the Appellate Tribunal and to the High Court, respectively, have accordingly been substituted for section 269G-

(vii) SecUon 2691 (original section 269H).—The amendments made In the Explanation to sub-section (1) are consequent upon the new provi- sions as to appeals to the Appellate Tribunal and High Court.

(viii) Section 269K (original section 269J) .—The Committee recom- mend that in conformity with the provisions made in the Finance Bill, 1972, the rate of interest should be increased from 9 per cent to 12 per cent. Sub-section (4) has been amended accordingly. The oilier amend- ments made in the section are of a consequential nature.

(ix) Section 269L (original section 269K).—The omission of sub- section (3) is consequent upon the insertion of new section 2690. The other amendments made in this section are also of a consequential nature.

(x) Section 269M (original section 269L) and section 269AT (original section 269M).—The amendments made in these sections are of a draft- ing or consequential nature.

(xi) New section 269O.—The Committee recommend that it should be made clear that a person entitled to appear before the competent authority or the Appellate Tribunal may, except where he is required to attend personally, attend by an authorised representative within the meaning of section 288 of the Income-tax Act. The Committee also recommend that the cases in which a person may attend by an authorised representative or a registered valuer may be set out in a separate section. Accordingly, new section 2690 has been added.

(xii) Section. 269P (original section 269JV).—The amendments made

are of a consequential nature.

(xiii) New section 269Q.—The Committee feel that the provisions as to acquisition should not apply to transfers made to relatives out of natural love and affection as in such cases consideration less than the fair market value is accepted not with a view to evasion of tax but on account of natural love and affection between the parties. Accordingly new section 269Q has been added.

16. New clause 6.—The Committee feel that an assessee who is entitled or required to attend before any income-tax authority or the Appellate Tribunal in connection with any matter relating to the valuation of any asset, otherwise than when he is required to attend personally, should be allowed to be represented by a registered valuer. Accordingly, a clause has been added for inserting a new section 287A in the Income- tax Act.

17. Clause 10 (original clause 9).—The amendments made in this clause are for providing the guidelines on the basin of which a Wealth- tax Officer may make a reference of the valuation of any asset to a Valua- tion Officer. These have been explained in paragraph 14 ante.

18. Clause 14 (original clause 13).—The Committee recommend that new section 34AA proposed to be inserted by this clause in the Wealth- tax Act be amended to provide that a person required to attend before a Wealth-tax authority or the Appellate Tribunal in connection with the valuation of any asset may, except where he is required to attend in per- son, attend by a registered valuer. The section has been amended accordingly.

19. Clause 16 (original clause 15)—The Committee feel' that mere imprisonment upto six months or mere fine may not be adequate punish- ment in some cases of false verification by a registered valuer. The Committee, therefore, recommend that it should be open to the Court to impose both the punishments. Sub-section (2B) as proposed to be

inserted in section 36 of the Wealth-tax Act has been amended accord- ingly. The other amendment made in the sub-section is for correcting a patent mistake which had the effect of excluding the requirement as to mcns rea.

20. Clause 18 (original clause 17).—The Committee note that under section 38A which this clause seeks to insert in the Wealth-tax Act, a Valuation Officer to whom a reference has been made in connection with the assessment of any assessee has powers to enter only a building or other place occupied by the assessee. The Committee feel that in cases where the assessee owns or is in occupation of, any land or owns any building or other place, the Valuation Officer should also have powers to enter such land, building or other place. Sub-section (1) (b) of new section 38A has been amended accordingly.

21. Clause 21 (original clause 20).—The amendments made in this clause are for providing the guidelines on the basis of which a Gift-tax Officer may make a reference of the valuation of any property to a valua- tion officer and the same have been explained in paragraph 14 ante.

22. New clause 24.—The Committee feel that as under the Income- tax Act (vide clause 6, new section 287A, explained in paragraph 16 ante.), the facility of appearance by registered valuers in connection with matters relating to valuation should be extended to assessees under the Gift-tax Act. A new section 43A has, therefore, been added accord- ingly.

23. Clause 1 and Enacting Formula.—The amendments made are of & formal nature.

24. The Select Committee recommend that the Bill, as amended, be passed.

NEW DELHI; BHAGWAT JHA AZAD,

May 10, 1972.

Chairman,.

Vaisakhfi 20, 1894 (S.)

Select Committee.

MINUTES OF DISSENT

I

The fact that tax evasion, accumulation and circulation of black money have assumed menacing proportions, is agreed on all hands. Direct Taxes Enquiry Committee had submitted an interim report deal- ing with this question. The final report also has since been received by the Government of India. Yet all that the Government could think of in this regard is this halting and all too restricted bill on tax evasion with too narrow a scope to be of any significance.

2. This Bill is confined to acquisition of immovable properties in cer- tain cases of transfer to counteract evasion of tax and is in the nature of a deterrent. One form of concealment of accumulated black money which runs into thousands of crorcs of rupees is immovable property. The Government should strive not only to counteract tax evasion but also acquire all the ill-gotten wealth as resources for the benefit of deve- lopment. With that in view, any amendment to taxation law must pro- vide for acquisition of all immovable property undervalued in assess- ment in order to evade tax.

3. Even as it is, according to this it is legally not obligatory to acquire every property transferred for an apparent consideration which is less than the fair market value of the property. At best this Bill is only an enabling legislation. For strict implementation of this law, it has to depend on the policies of the Government. It should be binding on the Grovernment by law, to enforce this legislation in letter and in spirit.

4. An amendment to taxation law aiming at counteracting tax evasion should not lay itself open to evasion. It is significant to note that people could already think of half a dozen ways of circumventing this Bill. It is regrettable that the Committee have not made any serious attempt to plug such possible loopholes.

5. Section 269C, sub-section (1) of Chapter XXA contemplates that any immovable property of a fair market value exceeding twenty-five thousand rupees only can be liable for initiation of proceedings for the acqusition of such property, transferred for an apparent consideration, less than the market value by fifteen per cent. Here the stipulation of a minimum of twenty-five thousand rupees value opens the way for evad- ing this legislation. Immovable properties of market value exceeding twenty-five thousand rupees can be parcelled out in such manner that each part is of the market value of less than twenty-five thousand rupees for transfer at an apparent consideration. This minimum is prescribed in the name of the small man only to provide a loophole for the big. No minimum need be fixed, and the words "exceeding twenty-five thousand rupees" may be omitted without any serious consequences on the small man who' does not acquire black money nor is capable of utilising it.

6. Again in Section 269D, sub-section (1) of the same Chapter it is provided that no proceedings shall be initiated in respect of an immovable

property after expiry of six months from the end of the month in which the instrument of transfer in respect of such property is registered under the Registration Act of 1908. There is no denying the fact that it will be wholesome if proceedings are initiated without any delay whatsoever. If necessary even penalty may be provided for such delays for those concerned. But to provide that no proceedings shall be initiated after expiry of six months, coupled with lack of any provision to deal with wanton delays, again opens out the way for evading this legislation. It is not uncommon that officials collude with defrauders for a considera- tion especially when there is no watch dog over delays in initiating pro- ceedings. The plea that every transferor and transferee will be passing through anxious six months is to say everyone is a fraud trying to evade tax and richly deserves to be punished by such anxiety without time limit. The principle should be that no one who attempts to evade taxes in transfer of immovable property shall go without proceedings being initiated as in any other criminal offence by lapse of time.

7. The whole bill becomes a farce and a mockery when you go to Section 269J, sub-section (1) of the same Chapter which provides 15 percent solatium for acquiring the property. The Select Committee did give serious thought to this provision and sought the advice of the Law Ministry. There was a general feeling that it is out of place in a bill of penalty for evasion of taxes. But ultimately the flimsy argument that it may be retained as a measure of abundant caution against the whole legislation being struck down by the court on the ground that discriminatory use by the Government was possible while the Land Acquisition Act provides for 15 per cent solatium, carried the day. This is a serious matter where this line of least resistance should not have been taken but fought out if necessary with the judiciary.

8. It is now hoped thai this Bill which has emerged from the Select Committee will be passed by both the Houses of Parliament with the improvements suggested above and without delay and will thus soon become the law of the land.

K. BALADHANDAYUTHAM.

NEW DELHI;

May 8. 1972,

Vaisakha 18, 1894 (S.)

II

1. I have given extremely anxious consideration to the Report of the Select Committee and by and large I am in respectful agreement with what the Committee has to report on the bill. I, have, however, to regretfully dissent on two very fundamental provisions of the Bill refer- red to in the Report. One of the objects of the Bill basically being to deter citizens from tax evasion by under-statcment of value of immovable properties at the time of transfer, its commendability and laudability could not in theory be disputed. In practice, however, stringent provi- sions made more drastic in fiscal legislation are skilfully ignored by tax dodgers and evaders who manage by necessary ways and means to do so. It is the unsuspecting and honest citizens who get embroiled in unjust, unwarranted and protracted litigation and other harassment inherent in Tax fraud laws made to arrest tax evasion. And every effort

needs to be made to avoid this, hence I am constrained to write this note of dissent.

2. This tax legislation, in my opinion as now recommended, leaves a wide margin of honest and unsuspecting assessees being subjected to harassment, expenditure and protracted litigation. This would be inevi- table upon the subjective decision of the authorities based on an unrea- listic and arbitrary determination of fair market value of immovable pro- perties to be transferred.

3. Clause 4 seeks to insert a ntw chapter, chapter XXA in the Income- tax Act, 1961. The said chapter will contain new sections 269A to Sec- tion 269S proposed by the Bill. The proposed section 269A (d) defines "fair market value" in relation to immovable property transferred as the price that "the immovable property would ordinarily fetch on sale in the open market on the date of execution of the instrument of trans- fer of such property", but fails to clearly specify how such fair market value is to be determined. The entire legislation now proposed vests vast powers in the competent authority to acquire immovable property when there is a difference between the "fair market value" and the apparent consideration mentioned in the instrument of transfer on the mere valuation report made by the valuation officer of the department. The department's valuation officer's opinion may drastically differ from the professional opinion of any number of authorised professional valuers and yet acquisition proceedings and the harassment to the citizen inhe- rent in them can be started by the department on its own valuation of the property transferred. This in my humble opinion places an unfair and unjust weightage on the opinion of the department's valuation officer.

4. The said definition, however, is so utterly vague and ambiguous and obscure that even the most competent expert in the field of valua- tion of properties will fail to come to conclusions as to what is the fair market value in accordance with its definition with any degree of preci- sion much less with any degree of certainty. It is, therefore, my humble but considered opinion that the law itself must indicate in clear and un- ambiguous terms the criteria and guidelines which would form the basis of determining the "fair market value". The fair market value must not be left to be the sport of subjective tests used by valuers in search of the price the property would fetch if sold in the open market. Statutory criteria and guidelines must make the concept of fair market value more precise.

5. There are innumerable divergent and heterogenous circumstances which are taken into consideration while transferring immovable pro- perty that unless some precise criteria or guidelines as mentioned above are clearly prescribed by law, even the most honest and unsuspecting straight-forward citizen will be harassed by the provisions of this Bill. To say that a transaction involving transfer of immovable properties in which intentions are bona -fide or honest will be outside the purview of this legislation is. in my opinion, an over simplification of the problem. Therefore the definition of fair market value must be made more com-. prehensive, definite and easily ascertainable by any honest citizen.

6. I also disagree with the Report of this committee on the proposed section 269C The competept authority in terms of the ;"afd, ge^ion is-,

now vested with authority to initiate acquisition proceedings if he haa reason to believe that any immovable property of fair market value exceeding Rs. 25,OOIO|- has been transferred for an apparent consideration untruly mentioned in the instrument of transfer and is motivated by consideration of facilitating reduction or evasion of tax liability of the transferor or for facilitating the concealment of any income or money or other assets which should have been disclosed by the transferee for purposes of the Income-tax Act and the Wealth-tax Act.

7. Such a provision will take even a well meaning and bonaflde trans- feror of immovable property by surprise. In my opinion it was neces- sary in the drastic legislation of the type which is now contemplated, to make suitable provision for citizens, who on making appropriate pay- ment could get the department's opinion as to the "fair market value" of the property sought to be transferred prior to sale. So that if the prospective seller found himself landing into difficulties, without intend- ing to evade tax, he could either decide not to sell or buy at all, or revise the sale price or could go ahead with the sale, rejecting the valuation of the department in the hope that his own valuation being honest will prevail in appeal. In my opinion, therefore, section 269C should have contained appropriate provisions for pre-veriflcation as mentioned here- in-above.

8. An eminent commentator on Tax Law observes that "the utter waste of intelligence and labour on the part of both the public and the income-tax department entailed by perennial stream of amendments and complexities of our fiscal law is truly beyond belief."

Such amendments were made until a few years ago in the name of simplification which added to the complexities of the law, making it incomprehensible. Now the amendments are being mad^ lo make the tax laws more drastic in the name of unearthing colou^d money which only makes its dyedceper. But that is not the whole misfortune, there is something worse. And it is that with these stringent provisions while well-to-do tax dodgers continue this sport of tax evasion with impunity, the punitive rod of the tax gatherer becomes more unjust and more unsparing on honest and the law abiding citizens. Such amendments have to be resisted, the outcome of the same notwithstanding.

NEW DELHI;

PILOO M O D \.

May 8, 1972,

Vaisakha 18, 1894 (&",)

THE TAXATION LAWS (AMENDMENT) BILL, 1971

ARRANGEMENT OF CLAUSES

CHAPTER I

PRELIMINARY

CLAUSES

1. Short title and commencement.

CHAPTER U

AMENDMENTS TO THE INCOME-TAX ACT, 1961

2. Insertion of new section 55A. 3. Amendment of section 254. 4. Insertion of new Chapter XXA. 5. Insertion of new section 281 A,

6. Insertion of new section 287A.

CHAPTER in

AMENDMENTS TO THE WEALTH-TAX ACT, 1957

7. Amendment of section 2. 8. Amendment of section 7. 9. Insertion of new section 12A. 10. Insertion of new section 16A. 11. Amendment of section 23, 12. Amendment of section 24. 13. Amendment of section 26 14. Insertion o' new Chapter VLIB. 15. Amendment of section 35. 16. Amendment of section 36. 17. Amendment of section 37. n Insertion of new section 38A. 19- Amendment of section 46.

CHAPTER IV

AMENDMENTS TO THE GIFT-TAX ACT, 1958

20. Amendment of section 2.

21. Amendment of section 15. 22. Amendment of section 23. 23. Amendment of section 25. 24. Insertion of new section 43A.

CHAPTER V

MISCELLANEOUS

25. Saving and special provision.

BILL N O. 115-A OF 1971

THE TAXATION LAWS (AMENDMENT) ACT, 1971

(AS REPORTED BY THE SELECT COMMITTEE)

[Words underlined or side-lined indicate the amendments suggested by

the Committee; asterisks indicate omissions.]

A BILL further to amend the Income-tax Act, 1961, the Wealth-tax Act, 1957 and the Gift-tax Act, 1958.

BE it enacted by Parliament in the Twenty-third Year of the Republic

of India as follows: —

CHAPTER I

PRELIMINARY

   1.  (1)  This  Act  may  be  called  the  Taxation  Laws  (Amendment)  Act,      Short
1972.                                                                               title
                                                                                    and com-
    (2)  It  shall  come  into  force  on  such  date  as  the  Central  Government mence-
may,  by  notification  in  the  Official  Gazette,  appoint,  and  different  dates ment.
may  be  appointed  for  different  provisions  of  this  Act.

CHAPTER II

AMENDMENTS TO THE INCOME-TAX ACT, 1961

y 1 1961.

2. In the Income-tax Act, 1961 (hereinafter referred to as the Income- tax Act), after section 55, the following section shall be inserted, namely: —

Insertion of new- section 55A.

'55A. With a view to ascertaining the fair market value of a capital asset for the purposes of this Chapter, the Income-tax Officer may refer the valuation of the capital asset to a Valuation Officer—

Refe- rence to Valuation Officer.

(a) in a case where the value of the asset as claimed by the assessee is in accordance with the estimate made by a registered valuer, if the Income-tax Officer is of opinion that the value so claimed is less than its fair market value;

(b) in any other case, if the Income-tax Officer is of opinion—

(i) that the fair market value of the asset exceeds the value of the asset as claimed by the assessee by more than such percentage of the value of the asset as so claimed or by more than such amount as may be prescribed in this behalf; or

(ii) that having regard to the nature of the asset and other relevant circumstances, it is necessary so to do,

27 oi 1957.

and where any such reference is made, the provisions of sub-sections (2), (3), (4), (5) and (6) of section 16A, clauses (ha) and (i) of sub- section (i) and sub-sections (3A) and (4) of section 23, sub-section (5) of section 24, section 34AA, section 35 and section 37 of the Wealth-tax Act, 1957 shall, with the necessary modifications, apply in relation to such reference as they apply in relation to a reference made by the Wealth-tax Officer under sub section (1) of section 16A of that Act.

Explanation.—In this section, "Valuation Officer" has the same meaning as in clause (r) of section 2 of the Wealth-tax Act, 1957.'.

27 of 1957

3. In section 254 of the Income-tax Act, sub-section (1A) shall be omitted.

Amend-

ment of

•ectloft

254.

4. In the Income-tax Act, after Chapter XX, the following Chapter shall be inserted, namely: —

'CHAPTER XXA

Insertion

of new

Chapter

XXA.

ACQUISITION OF IMMOVABLE PROPERTIES IN CERTAIN CASES OF TRANSFER TO COUNTERACT EVASION OF TAX

269A. In this Chapter, unless the context otherwise requires,—

Deflni-

tlom.

(a) "apparent consideration", in relation to any immovable property transferred, means,—

(i) if the transfer is by way of sale, the consideration for such transfer as specified in the instrument of transfer;

(ii) if the transfer is by way of exchange.—

(A) in a ca3e where the consideration for the trans- fer consists of a thing or things only, the price that such thing or things would ordinarily fetch on sale in the open market on the date of execution of the instrument of transfer;

(B) in a case where the consideration for the trans- fer consists of a thing or things and a sum of money, the aggregate of the price that such thing or things would ordinarily fetch on sale in the open market on the date of execution of the instrument of transfer and such sum;

(b) "competent authority" means an Assistant Commissioner of Income-tax authorised by the Central Government under sec- tion 269B to perform the functions of a competent authority under this Chapter;

(c) "court" means a principal civil court of original jurlsdlc tion unless the Central Government has appointed (as it is here by authorised to do) any special judicial officer within any speci- fied local limits to perform the functions of the court under thli Chapter;

(d) "fair market value¹', in relation to any immovable pro- perty transferred, means the price that the immovable property would ordinarily fetch on sale in the open market on the date oi execution of the instrument of transfer of such property;

(e) "immovable property" means any land or any building or part of a building, and includes, where any land or any build- ing or part of a building is transferred together with any machi- nery, plant, furniture, fittings or other things, such machinery, plant, furniture, fittings or other things also.

Explanation.—-For the purposes of this clause, land, building, part of a building, machinery, plant, furniture, fittings and other things include any rights therein;

(j) "instrument of transfer" means the instrument of transfer 16 of 1P08

registered under the Registration Act, 1908;

(fil) "person interested", in relation to any immovable pro- perty, includes all persons claiming, or entitled to claim, an inter- est in the compensation payable on account of the acquisition of that property under this Chapter;

(h) "transfer", in relation to any immovable property, means transfer of such property by way of sale or exchange.

269B. (1) The Central Government may, by general or apeclal order published in the Official Gazette,—

Compe-

tent

authority.

(a) authorise as many Assistant Commissioners of Income- tax, as it thinks fit, to perform the functions of a competent authority under this Chapter; and

(b) define the local limits within which the competent autho- rities shall perform their functions under this Chapter.

(2) In respect of any function to be performed by a competent authority under ajny provision of this Chapter in relation to any Im- movable property referred to in section 269C, the competent autho- rity referred to therein shall,—

(a) in a case where such property is situate within the local limits of the jurisdiction of only one competent authority, be such competent authority;

(b) In a case where such property is situate within the local limits of the jurisdiction of two or more competent authorities, be the competent authority empowered to perform such functions in relation to such property in accordance with rules made in this behalf by the Board under section 295.

(3) No person shall be entitled to call in question the jurisdiction of a competent authority in respect of any immovable property after the expiry of thirty days from the date on which such competent authority initiates proceedings under section 269D for the acquisition of such property.

(4) Subject to. the provisions of sub-sectien (3), where the juris- diction of a competent authority is questioned, the competent autho- rity shall, if satisfied with the correctness of the claim, by order In writing, determine the question accordingly and if he is not so satis- fied, he shall refer the question to the Board and the Board shall, by order in writing, determine the question.

Immov- able property in respect of which proceed- tnf • for acquisition may be taken.

269C, (1) Where the competent authority has reason to believe that any immovable property of a fair market value exceeding twenty-five thousand rupees has been transferred by a person (here- after In this Chapter referred to as the transferor) to another person (hereafter in this Chapter referred to as the transferee) for an appa- rent consideration which is less than the fair market value of the property and that the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of 'transfer with the object of—

(a) facilitating the reduction or evasion of the liability of the transferor to pay tax under this Act in respect of any income arising from the transfer; or

(b) facilitating the concealment of any income or a(ny moneys or other assets which have not been or which ought to be disclos- ed by the transferee for the purposes of the Indian Income-tax Act, 1922, or this Act or the Wealth-tax Act, 1957,

H of 182*.

27 of HHS7.

the competent authority may, subject to the provisions of this Chapter, Initiate proceedings for the acquisition of such property under this Chapter:

Provided that before initiating such proceedings, the competent

authority shall record his reasons for doing so:

Provided further that no such proceedings shall be initiated un- less the competent authority has reason to believe that the fair market value of the property exceeds the apparent consideration therefor by more than fifteen per cent, of such apparent consideration.

(2) In any proceedings under this Chapter in respect of any

immovable property,—

(a) where the fair market value of such property exceeds the apparent consideration therefor by more than twenty-five per cent, of such apparent colnsideration, It shall be conclusive proof that the consideration for such transfer as agreed to bet- ween the parties has not been truly stated in the Instrument of transfer;

Prelimi-

nary

notice.

(b) where the property has been transferred for an appa- rent consideration which is less than Its fair market value, it shall be presumed, unless the contrary Is proved, that the consi- deration for such transfer as agreed to between the parties has not been truly stated in the Instrument of transfer with such object as is referred to in clause (a) or clause (b) of sub-section U). 269D. (1) The competent authority shall initiate proceedings for the acquisition, under this Chapter, of any immovable property re- ferred to In section 269C by notice to that effect published In tha Official- Gazette:

W e* 1008.

Provided that no such proceedings shall be initiated in respect of any immovable property after the expiration of a period of six months from the end of the month in which the instrument of trans- fer in respect of such property is registered under the Registration Act, 1908:

Provided further that—

(a) in a case where it is determined under sub-section (4) of section 269B by the competent authority who has Initiated pro- ceedings for the acquisition of any Immovable property under this Chapter or by the Board that such competent authority has no jurisdiction to initiate such proceedings, the competent autho- rity having jurisdiction may initiate such proceedings within—

(i) the period of six months specified in the foregoing proviso; or

(ii) a period of thirty days from the date of such determination,

whichever period expires later;

(b) in a case where proceedings for the acquisition of any Immovable property under this Chapter could not be initiated during any period of time by reason of any injunction or order of any court prohibiting the initiation of such proceedings or preventing the examination of documents or other materials required to be examined for the purpose of¹ determining whether such proceedings should be initiated, the time of the continuance of the injunction or order, the day on which it was Issued or made and the day on which it was withdrawn shall be excluded in computing the period during which such proceedings may be Initiated under this sub-section.

(2) "TCie competent authority shall—

(a) cause a notice under sub-section (1) in respect of any Immovable property to be served on the transferor, the transferee, the person in occupation of the property, if the transferee is not in occupation thereof, and on every person whom the competent authority knows to be Interested in the property;

(b) cause such notice to be published—

(i) In his office by affixing a copy thereof to a conspicuous place;

(ii) in the locality in which the immovable property to which It relates is situate, by affixing a copy thereof to a conspicuous part of the property and also by making known In such manner as may be prescribed the substance of such notice at convenient places in the said locality.

ObJ"w- tioni.

269E. (7) Objections against the acquisition of the Immovable property in respect of which a notice has been published in the Official Gazette under sub-section (1) of section 269D may be made—

(a) by the transferor or the transferee or any other person referred to in clause (a) of sub-section (2) of that section, within a period of forty-five days from the date of such publication or a period of thirty days from the date of service of notice on such person under the said clause, whichever period expires later;

(b) by any other person interested in such immovable pro- perty, within forty-five days from the date of such publication.

(2) Every objection under sub-section (7) shall be made to th" competent authority in writing.

(3) For the removal of doubts, it is hereby declared that objec- tion may be made under sub-section (/) that the provisions of clauM (a) of sub-section (2) of section 269C do not apply in relation to any immovable property on the ground that the fair market value of such property does not exceed the apparent consideration therefor by more than twenty-five per cent, of such apparent consideration.

Hearing ot obj"o- tlona.

289F. (1) The competent authority shall fix a day and place for the hearing of the objections made under section 269E against the acquisition under this Chapter of any immovable property, and shall give notice of the same to every person who has made such objec- tion:

Provided that such notice shall also* be given to the transferee of •uch property even if he has not made any such objection.

(2) Every person to whom a notice is given under aub-section (1) shall have the right to be heard*** at the hearing of the objec- tions.

(3) The competent authority shall have the power to adjourn the hearing of the objections from time to time.

(4) The competent authority may, before disposing of the objec- tions, make such further inquiry as he thinks fit.

(5) The decision of the competent authority in respect of tha objections heard shall be in writing and shall state the reasons for the decision with respect to each objection.

(6) If after hearing the objections, if any, and after taking into account all the relevant material on record, the competent authority Is satisfied that,—

(a) the immovable property to which the proceedings relate is of a fair market value exceeding twenty-five thousand rupees; (b) the fair market value of such property exceeds the apparent consideration therefor by more than fifteen per cent, of such apparent consideration; and

(c) the consideration for such transfer as agreed to between the parties has not been truly stated in the instrument of transfer with such object as is referred to in clause (a) or clause (b) of sub-section (2) of section 269C,

he may, after obtaining the approval of the Commissioner, make an order for the acquisition of tke property under this Chapter.

Explanation.—In this sub-section, "Commissioner", in relation to a competent authority, means such Commissioner as the Board may, by general or special order in writing, specify in this behalf.

(7) If the competent authority is not satisfied as provided in sub- section (6), he shall, by order in writing, declare that the property will not be acquired under this Chapter,

(8) The competent authority shall Berve a copy of his order under sub-section (6) or sub-section (7), as the case may be, on the transferor, the transferee and on every person who has made objections against such acquisition under section 269E.

(9) In any proceedings under this Chapter in respect of any im- movable property, no objection shall be entertained on the ground

16 of 1908.

that although the apparent consideration for the property is less than the fair market value of the property on the date of the execu- tion of the Instrument of transfer, the consideration as agreed to between the parties has been truly stated in the instrument of transfer because such consideration was agreed to having regard to the price that such property would have ordinarily fetched on sale in the open market on the date of the conclusion of the agreement to sell the property, except where such agreement has been registered under the Registration Act, 1908.

269G. (1) An appeal may be preferred to the Appellate Tribunal against the order for the acquisition of any immovable property made by the competent authority under section 269F,—

Appeal

against

order for

acquisi-

tion.

(a) by the transferor or the transferee or any other person referred to in sub-section (8) of that section, within a period of forty-five days from the date of such order or a period of thirty days from the date of service of a copy of the order on such per- son under the said sub-section, whichever period expires later;

(b) by any other person interested in such Immovable pro- perty, within forty-five days from the date of such order:

Provided that the Appellate Tribunal may, on an application made in this behalf before the expiry of the said period of forty-five days or, as the case may be, thirty days, permit, by order, the appeal to be presented within such further period as may be specified there- in if the applicant satisfies the Appellate Tribunal that he has suffi- cient cause for not being able to present the appeal within the said period of forty-five days or, as the case may be, thirty days.

(2) Every appeal under this section shall be In the prescribed form and shall be verified in the prescribed manner and shall be accompanied by a fee of one hundred and twenty-five rupees.

(3) The Appellate Tribunal shall fix a day and place for the hearing of the appeal and shall give notice of the same to the appel- lant and to the competent authority.

(4) The Appellate Tribunal may, after giving the appellant and the competent authority an opportunity of being heard, pass such orders thereon as it thinks fit.

(5) The Appellate Tribunal may, at any time within thirty daya from the date of the order, with a view to rectifying any mistake apparent from the record, amend any order passed by it under sub- section (4) and shall make such amendment if the mistake is brought to its notice by the appellant or the competent authority:

Provided that if any such amendment is likely to affect any person prejudicially, it shall not be made without giving to such person a reasonable opportunity of being heard.

(6) The Appellate Tribunal shall send a copy of any orders passed under this section to the appellant and to the Commissioner.

(7) Save as provided in section 269H, orders passed by the Ap- pellate Tribunal on appeal shall be final.

(8) Every appeal under this section shall be disposed of as ex- peditiously as possible and endeavour shall be made to dispose ef every such appeal within ninety days from the date on which It ia presented,

(9) The provisions of section 255 [except sub-section (3) thereof] shall, so far as may be, apply in relation to the powers, functions and proceedings of the Appellate Tribunal under this section as they apply in relation to the powers, functions and proceedings of the Appellate Tribunal under Chapter XX.

Appeal to Hieh Court.

269H. (1) The Commissioner or any person aggrieved by any order of the Appellate Tribunal under section 269G may, within sixty days of the date on which he is served with notice of such order under that section, prefer an appeal against such order to the High Court on any question of law:

Provided that the High Court may, on an application made in this behalf before the expiry of the said period of sixty days, permit, by order, the appeal to be presented within such further period as may be specified therein, if the applicant satisfies the High Court that he has sufficient cause for not being able to present the appeal within the said period of sixty days.

(2) An appeal under sub-section (1) shall be heard by a Bench of not less than two Judges of the High Court and the provisions of section 259 shall apply in relation to any such appeal as they ap- ply in relation to a case referred to the High Court under section 256.

(3) The costs of the appeal shall be in the discretion of the High Court

Vesting of property in Central Govern- ment.

2691. (1) As soon as may be after the order for acquisition of any immovable property made under sub-section (6) of section 269F becomes final, the competent authority may, by notice in writing, order any person who may be in possession of the immovable property to surrender or deliver possession thereof to the competent authority or any other person duly authorised in writing by the competent authority in this behalf, within thirty days of the date of the service of the notice.

Explanation,—For the purposes of this sub-section, an order for the acquisition of any immovable property (hereafter in this Explana- tion referred to as the order for acquisition) made under sub-section (6) of section 269F becomes final,—

(a) in a case where the order for acquisition is not made the subject of an appeal to the Appellate Tribunal under section 269G, upon the expiry of the period during which such appeal may be presented under that section;

(h) in a case where the order for acquisition is made the subject of am appeal to the Appellate Tribunal under section 269G,—

(i) if the order for acquisition is confirmed by the Appellate Tribunal and the order of the Appellate Tribunal is not made the subject of an appeal to the High Court under section 269H, upon the expiry of the period during which such appeal may be presented under that section to the High Court;

(U) if the order of the Appellate Tribunal is made the subject of an appeal to the High Court under section 269H, upon the confirmation of the order for acquisition by the High Court.

(2) If any person refuses or fails to comply with the notice under sub-section (1), the competent authority or other person duly authorised by the competent authority under that sub-secti"n may take possession of the immovable property and may, for that purpose, use such force as may be necessary.

(3) Notwithstanding anything contained in sub-section (2), the competent authority may, for the purpose of taking possession of any property referred to in sub-section (2), requisition the services of any police officer to assist him and it shall be the duty of such officer to comply with such requisition.

(4) When the possession of the Immovable property is surren- dered or delivered under sub-section (1) to the competent authority or a person duly authorised by him in that behalf or, as the case may be, when the possession thereof is taken under sub-section (2) or Hub-section (3) by such authority or person, the property shall vest absolutely in the Central Government free from all encumbrances:

Provided that nothing in this sub-section shall operate to dis- charge the transferee or any other person (not being the Central Government) from liability in respect of such encumbrances and, notwithstanding anything contained in any other law, such liability may be enforced against the transferee or such other person by a suit for damages.

Compen- sation.

269J. (I) Where any immovable property is acquired under this Chapter, the Central Government shall pay for such acquisition compensation which shall be a sum equal to the aggregate of the amount of the apparent consideration for its transfer and fifteen per cent, of the said amount.

(2) Notwithstanding anything contained in sub-section (1),—

(a) where, after the transfer to the transferee of the pro- perty referred to in that sub-section but before the vesting of the property in the Central Government, the property has been da- maged (otherwise than as a result of normal wear and t e a r ), the compensation payable under that sub-section shall be reduced by such amount as the competent authority and the persona entitled to the compensation may agree within fifteen days of the vesting of the property in the Central Government or in default of such agreement as the court may, on a reference made to it in this behalf by the competent authority or by any person duly autho- rised for the purpose by the competent authority, determine to be the amount that may have to be expended for restoring the property to the condition in which it was at the time of such transfer;

(b) where, after the transfer of such property to the trans- feree but before the date of publication in the Official Gazette of the notice In respect of such property under sub-section (1) of section 26&D, any improvements have been made to the pro- perty, whether by way of addition or alteration or in any other manner, the compensation payable in respect of such property under sub-section (1) shall be increased by such amount as the competent authority and the persons entitled to the compensa- tion may agree within fifteen days of the vesting of the property in the Central Government or in default of such agreement as the court may, on a reference made to it in this behalf by the competent authority or by any person duly authorised for the purpose by the competent authority, determine to be the amount spent for making such improvements.

(3) Every reference under clause (a) or clause (b) of sub-section (2) shall be made within thirty days of the date on which the immovable property to which it relates becomes vested in the Central Government or within such further period as the court may, on an application made in this behalf before the expiry of the said period and on being satisfied that there is sufficient cause for doing so, allow and such reference shall state clearly the compensation payable under sub-section (1) in respect of the immovable property and the amount by which, according to the estimate of the competent authority, such compensation shall be reduced under clause (a) or, as the case may be, increased under clause (b), of sub-section (2).

1 of 1894.

(4) The amount by which the compensation payable under sub- section (i) in respect of any immovable property acquired under this Chapter falls short of the amount which would have been payable BB compensation if that property had been acquired under the Land Acquisition Act, 1894, after the issue of a preliminary notice under section 4 of that Act on the date of publication in the Official Gazette of the notice in respect of the property under sub-section (7) of section 269D, shall be deemed to have been realised by the Central Government as a penalty from the transferee for being a party to a transfer with such object as is referred to in clause (o) or clause (b) of sub-section (1) of section 269C, and no penalty shall be levied for any assessment year on the transferee—

(a) under clause (in) of sub-section (1) of section 271, for concealing the particulars or furnishing inaccurate particulars of BO much of his income as is utilised by him for paying to the transferor, by way of consideration for the property, any amount in excees of the apparent consideration for the property, notwith- standing that such amount is included in the income of the transferee;

17 of 1057.

(b) under clause (Hi) of sub-section (1) of section 18 of the Wealth-tax Act, 1957, for concealing the particulars or furnish- ing inaccurate particulars of so much of his assets as are utilised by him for paying to the transferor, by way of consideration for the property, any amount in excess of the apparent consi- deration for the property, notwithstanding that such assets are included in the net wealth of the transferee.

BKc.rfc>fl"

Paymeijt or CIP'BRS'U of com- i. peneation!