A. KALYANASUNDHARAM,A.M. These are three Miscellaneous Applications filed by Department and are said to arise out of Tribunal's order in Gift-tax Appeals for asst. yrs. 1971-72 and 1972-73. In M.A. No. 58/JP/85 it has been submitted by Department that basic question for consideration of Tribunal was whether capital contribution by assessee of its capital assets was transfer or not. In Tribunal's order it was held that there was no transfer. According to Department in view of Special Bench decision in case of Mannalal Nirmal Kumar Surana vs. ITO, Special Bench decision in (1982) 1 ITD 412 (Del) it was held that introduction of capital assets to partnership firm tantamounts to transfer. Therefore, according to them order of Tribunal give rise to mistake apparent from record. In M.A. No 8/JP/85, it has been submitted that there had been non-presentation of correct and actual fact to GTO. It has been submitted that assessee's counsel has mis-presented facts. It has also been submitted that due consideration of Settlement Commission's order has also not been given. Reference was made to Para 21 of Tribunal's order as well as Para 34 of order. Further it has been submitted that gift-tax records show that there were two returns and by referring to letter dt. 30th April, 1980 it was submitted that assessee's representative had suppressed facts. Reference was also made to Paras 22,29,31 and 41of order. It has been further submitted that facts regarding particulars of property sold have not been correctly brought out in order. It has also been submitted about share holdings of Company by different persons and relationships of persons. Further facts have also been provided in Miscellaneous Application. Referring to Para 41 Department again submitted that Tribunal did not consider values arrived at by Settlement Commission. Alongwith this M.A. assessee had filed copy of Gift-tax Return filed on 23rd May, 1980. In M.A. No.9 he submitted that situation is similar to that of asst. yr. 1971-72 and again properties sold have not been properly brought out. Mr. S.S. Ruhela, ld. Departmental Representative submitted that Supreme Court in case of Mc Dowell and Co. Ltd. vs. CTO (1985) 47 CTR (SC) 126: (1985) 154 ITR 148 (SC) has provided clearly that intention to defraud with view to avoid tax even where it is legally done cannot be permitted. He also relied on recent Supreme court decision in case of Kartikey V. Sarabhai vs. CIT (1985) 49 CTR (SC) 172: (1985) 23 TAXMAN 14 W (SC). He specially made reference to Para 20 of order and submitted that authorised representative has not only did not bring out correct facts and this had led to various mistakes in order and its conclusion. He, therefore, vehemently argued that on basis of application also made, order needs to be rectified. Shri S.P. Mehta, ld. Counsel for assessee submitted that in M.A. No. 58 what Department has submitted clearly shows that there was no error apparent from record and in fact it was not subject matter of appeal. As regards settlement, it was event that happened in 1973 and has no relevance for two asst. yr. 1971-72 and 1972-73. Mr. S.P. Mehta further submitted that assessment under Gift-tax has been made on basis of deemed gift. He referred to Tribunal's order in paras 2, 3 & 4 till para 11 where facts obtained. For asst. yr. 1972-73, facts are contained in para 12 onwards. He submitted that Settlement Commission's order was part of order and submissions made by ld. Departmental Representative that assessee had suppressed facts is totally incorrect and is baseless. He further submitted that if GTO chooses not to mention something in order than assessee cannot be said to have submitted wrong facts. In regard to other two M.A.s, reference was made to para 40 of Tribunal's order as well as paras 24 and 42 which contain specific mention as regards matters considered by Settlement Commission. We have heard parties concerned. Tribunal's order is emphatic on issue that sale of properties were made for adequate considerations. Tribunal's finding which is at para 41 is to effect that sales having been effected for adequate considerations and that there being no attempt to tax evasion, there can be no question of deemed gift that can be said to arise in respect of sales so effected in both years. clear finding of fact was sales were not for inadequate consideration or below market value. As regards question of transfer is concerned, same has been finally settled by Supreme Court in case of Kartikey vs. Sarabhai (1985) 49 CTR (SC) 172: (1985) 23 TAXMAN 14W (SC). According to their Lordships of Supreme Court contribution of assets to partnership firm by partner involves transfer. Their Lordships have further observed that credit that is given to partners capital account, who has brought in capital asset, represents notional value so as to bring in asset at particular value in books of firm. According to their Lordships this is with view to show some amount of contribution made by partner and does not reflect value of asset as such and evaluation of value of property for purpose of transfer cannot be done and therefore, it is outside ambit of ss. 45 and 48 of IT Act. They have thus, come to conclusion that though there is transfer, it does not attract capital gains tax. ld. Departmental Representative Mr. S.S. Ruhela had emphasised that Supreme Court in case of K.P. Varghese vs. ITO (1981) 24 CTR (SC) 358: (1981) 131 ITR 597 (SC) have held that in cases where there is transfer of property to value below market price though s. 52(2) may not be attracted it would before Department to establish that something more than what was shown in agreement had changed hands, but gift tax would be attracted where it is found that property has changed hands at lesser value than market price. According to him, in instant case K.P. Varghese's decision would squarely apply to facts of case. We are of view that Departmental Representative view is ill-founded. reason being in K.P. Varghese's decision, there are three requirements, which are (a) transfer of property, (b) receipt of value by one party from another, and (c) value so received is less than market price. In instant case, in accordance with their Lordship's decision in case of Kartikeya Sarabhai (supra), there is transfer, but amount credited to partner's capital account is not consideration received from other partners and, therefore, amount cannot be said to be received from other partners. In accordance with Supreme Court decision in case of Kartikeya Sarabhai, amount so credited to partners capital account is only notional value and evaluation for purpose of capital gains is not possible. Therefore, remaining two conditions required in K.P. Varghese's case is not at all satisfied in instant case. two conditions being receipt of consideration and consideration so received paying lesser than market price. Therefore, gift-tax cannot be attracted in such situation at all, as application of deemed gift would arise only when initial consideration is lower than market value and when initial consideration itself cannot be evaluated, then provisions of deemed gift are not attracted. As regards returns filed by assessee observations of Tribunal are contained in paras 33 and 34. observation of Tribunal was to effect that since there was no return prior to March, 1980, assessment could only be made under s. 15(5) and not under s. 15(3). Therefore, it has been held that assessment was bad and accordingly quashed. Even according to Mr. Ruhela, ld. Departmental Representative copy of return that has been filed for 1971-72 clearly indicates that return was only filed on 23rd M y , 1980. Therefore, on facts alone it is clear that there was no mis- representation of facts by assessee at any stage. submissions made by Departmental Representative are wholly unwarranted in view of facts. Even for asst. yr. 1972-73 Tribunal have considered various facts and submissions of ld. Departmental Representative are without any merit. With these observations all three Miscellaneous Applications are dismissed. H.S. AHLUWALIA, J.M. I have had benefit of going through order proposed by my ld. brother. Personally speaking I am of opinion that earlier order of Tribunal calls for reconsideration. In MA Nos.58,8 & 9/JP/85 it has been contended on behalf of applicant that Bench had earlier overlooked decision in case of Mannalal Nirmal Kumar Surana vs. ITO (1982) 1 ITD 412 (Del) (SB), wherein it had been held that capital assets contributed by partners amounted to transfer. This view has, in fact, been endorsed by Hon'ble Supreme Court in case of Sidharth Sarabhai vs. CIT (1985) 49 CTR (SC) 172: (1985) 23 TAXMAN 14W (SC). On this basis, I am of opinion that earlier order of Tribunal was not correct in law. argument of my ld. Brother that even after Supreme Court decision, there cannot be said to be any consideration for transfer of these assets and, therefore, there could not be any liability to gift-tax. To may mind it would be case in which para 20 of decision of their Lordships in Sidharth Sarabhai's case would be applicable. In M.A. No. 8/Jp/85 it has further been contended that correct and actual facts were not presented to Bench. Sales of six properties were, in fact were made to close relatives of assessee and to concerns in which assessee was substantially interested. In para 10 of application Revenue has pointed out that assessee had sold certain properties to Jodhan Real Estate Development Corporation P. Ltd. in which assessee had one share, h i s mother had 100 shares and M/s Jodhan Real Estate Development Corporation P. Ltd. had 5000 shares. assessee was Director of both companies and had substantial interest therein. Further market value of assets for purpose of computation of net wealth of assessee had been held to be much higher than value for which properties had been transferred. Settlement Commission had also estimated value at much higher figure. Apparently, there was no reason why different value should have been computed for purpose of gift -tax liability. Therefore, para 20 of Supreme Court decision would be apparently applicable. Similarly, in M.A. No.9/Jp/85, again it has been alleged that transfer of Rai- ka-Bagh Palace was in favour of Dowager Maharani's Residential & Welfare Accommodation. This was trust created by assessee himself. Again Umaid Bhawan palace had been transferred to M/s Marudhar Hotels (P) Ltd. In which assessee had 95 per cent shares. In view of decision of their Lordships o f Supreme Court in K.P. Varghesse vs. ITO (1981) 24 CTR (SC) 358: (1981) 131 ITR 597 (SC) these transfers may not be subject to capital gains tax, but in view of certain observations at page 615 of Report, they would certainly attract liability to gift-tax. In view of all these circumstances, I am of opinion that Tribunal's decision holding that assessee was not bound to disclose transactions in his returns of Gift-tax, requires reconsideration. When person is transferring properties at value different from value adopted in wealth tax returns and market value has certainly been found to be different and much higher than value to which they have been to be different and much higher than value to which they have been transferred, Prima facie, assessee is expected to disclose all these facts to GTO so as to enable him to find out whether there is case for applicability of cl. 4(1)(s) of GT Act. Unless assessee discloses, sales, GTO cannot take action and failure of assessee to do so would entitle GTO to take recourse to s. 16(1)(a) of GT Act. However, while earlier decision of Tribunal on all these matters appears to be wrong fact remains that decision is there. Since my ld. brother, who was party to original decision has chosen not to interfere with that decision and it can be legitimately urged on behalf of assessee that this is not proper form for re-considering earlier decision, I do not propose to make out case under s. 255(4) of IT Act read with sub-s. (11) of s. 23 of GT Act and respectfully concur with ultimate order proposed by my ld. Brother. *** GIFT TAX OFFICER v. H.H. SHRI GAJ SINGH