S.L. BANERJEE, J.M. These four appeals were filed by two assessee, S/Sri Dilip Kumar r o r and Anil Kumar Arora who had purchased property from Dr. Sudhanshu Kumar Sen by four different deeds, on 16th Sept., 1982 (two deeds No. 8396 & 8397) and on 16th Sept., 1982 (sic) (two deeds No. 8503 & 8504). total consideration mentioned in those deeds was Rs. 1,96,000. 2 . land in question is situated 350 feet off Frazer Road and approach land is of average width about 16 ft. Competent Authority relied upon four sale instances of land at Frazer Road as per Inspector s report to initiate acquisition proceeding under s. 269C of IT Act, 1961. sale instances relied upon by him were as under : Sl. Deed Date Area Amount No. No. 9-2- 10 Rs. 1. 597 1980 Dhurs 49,000 11- 10 Rs. 2. 1372 3-1980 Dhurs 49,000 20- 10 Rs. 3. 860 2-1980 Dhurs 49,000 11- 10 Rs. 4. 673 2-1980 Dhurs 49,000 Competent Authority referred valuation of property to Valuation Cell of Department. report of Valuation Officer was given in following manner : "Annexure No. 1 valuation of property of Shri Dilip Kumar Arora, S/o Shri Pranath R/o. Dak Bunglow Road, P.S. Kotwali, P.O. G.P.O., Distt. Patna bearing holding No. 36-30, Ward No. 1, Circle No. 6, Sheet No. 2, Plot No. 58(P), Touzi No. 205 (Pata collectorate) Road. Known as off Frazer Road, (Mazharul Haque Path.) Valuation as on 16th Sept., 1982 1. cost of structure : Khapra Poash with 9 -6 Av. Rs. Ht. 30-0X1 6 0 =480.00 s ft. = 44.59 Sq.m @ Rs. 427.52 Per. 19,063 S.qm. 2. Compound Wall of ht. 6 -9 59.22 Mtr. @ Rs.. 236.30 Rs. per R. Mtr. 13,994 Rs. . 33,057 3. No water supply and electricity . ( ) 4. Less for depreciation of 27 years passed. 9/10X27/30X Rs. Rs. 33,057= Rs. 26,776 26,776 Rs. 5. Depreciated value of structure. 6,281 Rs. 6. Cost of land of area 6759 S. ft. =Rs. 4,965 Kathas 1,59,919 (a) 1st belt 3.173 Katha @ Rs. 50,400 per katha . Rs. (b) 2nd belt 1.792 Katha @ 2/3 of Rs. 50,400 per Katha 60,211 Rs. Total 2,26,411 (Since partition amongst transferees not yet done, therefore, their area as per deed comes to 1/4 of total area Rs. 2,26,411 @ Rs. 56, 603 or 56,600." Competent Authority did not accept report of Valuation Officer and relied upon report of Inspector to take rate of Rs. 1 lakh per katha. manner he worked out valuation of land was as under : "The value of land (1) 1st Belt of 3,173 Katha @ Rs. 1,00,000 per Rs. Katha 17,300 (2) 2nd Belt of 1,792 Katha @ Rs. 2/3rd of Rs. Rs. 1,00,000 per katha 1,19,470 Rs. (3) Value of Structure as determined by V.O. 6,281 Rs. . 4,43,051 1/4th of fair market value as on date of transfer is, therefore, determined at Rs. 1,10,763 against Rs. 49,000 declared in instrument of transfer. assessee, inter alia, gave instances of same plot of land on basis of which Inspector had made its report. entire land in sale instances of Inspector together with other four sale deeds measuring 5.5 kathas of land for total sum of Rs. 3,96,000 as under : Sl. Deed Date Areas Amount No. No. 19- Rs. 1. 4617 1Katha 6-1980 49,500 25- 15 Rs. 2. 1893 3-1980 Dhurs 49,500 9-2- 10 Rs. 3. 597 1980 Dhurs 49,500 11- 10 Rs. 4. 1372 3-1980 Dhurs 49,500 11- 1 Rs. 5. 674 2-1980 Katha 49,500 20- 10 Rs. 6. 860 2-1980 Dhurs 49,500 10- 15 Rs. 7. 2391 4-1980 Dhurs 49,500 11- 10 Rs. 8. 673 2-1980 Dhurs 49,500 Total area 5 1/2 Kathas Rs. 3,96,000 3. contention of assessee before IAC (Acq.) was that average rate of sale instances taken together of aforesaid land worked out to Rs. 72,000 per katha. If this is to be taken note of, cost of land after allowing benefit of 25 per cent for being off Frazer Road, cost will come to Rs. 54,000 per katha. If, belting method was adopted cost of land situated in lane of 13 feet frontage, further would go down nearer to cost declared in sale deeds. Apart from above submission already made before ld. lower authorities, ld. Counsel for assessee reiterated illegality of proceedings initiated by IAC (Acq.) in this case. He contended, there were no material before Competent Authority to show that something more than stated consideration in document had passed between transacting parties. There was no presumption in law to asume that something more than apparent consideration as shown in deed had passed between transacting parties. burden of showing that there was understatement of consideration was on Revenue and not on assessee as held by Supreme Court in case of K.P. Verghese vs. ITO (1981) 24 CTR (SC) 358 : (1981) 131 ITR 597 at 615 (SC). ld. Counsel for assessee further argued that in case of Mathew M. Thomas vs. IAC (1982) 1 ITD 115 (Coch) : 1 SOT 5 29 (Coch) Tribunal had held that above Supreme Court decision had relevance in respect of provisions of s. 269C especially claimed. (a) and (b) of sub-s(1).He urged, it was necessary for competent authority to form belief on rational, relevant and congent material that transferor had object of reducing or evading tax on income arising from transaction in question. In order to entertain this belief there must be some material before competent authority which would indicate that consideration received by transfer is more, in fact, than consideration stated in document. Without evidence to this effect claimed by ld. counsel of assessee, there would be no basis , in fact, for belief that transferer entertained object of tax evasion Similar would be position in respect of transfer under cl. (b) which refers not only to evasion of income tax but also to evasion of wealth tax. This particular clause seemed to be contemplated that transferee, by not accounting for entire consideration paid in document was seeking to keep out of assessment part of its income that was so accounted from liability to both income tax and wealth tax. This suggests according to learned counsel for assessee, even for this there must be some material before competent authority to show that some thing more than stated consideration in document had passed between transacting parties. id counsel for assessee, therefore, pleaded, in absence of any material indicating such position action of IAC (Acq.) was not sustainable in law and therefore, same should be struck down. learned counsel for assessee further drew out attention to case of Gujarat High Court CIT vs. Smt. Vimlaben Bhagwandas Patel (1979) 13 CTR (Guj) 27(1979) 118 ITR 134 (Guj) where their Lordships had expressed their opinion power under s. 269c.of IT Act 1961 was penal in nature and proceedings initiated thereunder were quasi-criminal and merely untrue statement of consideration in instrument of transfer was enough ulterior motive of tax evasion or concealment of income must be established, and without such proceeding could not be initiated. learned counsel for assessee pointed out that in case of CIT vs. Amrit Sports Industries (1983) 37 CTR (P&H) 29(1984) 145 ITR 231 (P&H) their Lordships of Punjab & Harayana High Court followed decision of Gujarat High Court mentioned above. 4 . ld. Departmental Representative Shri R.B. Sukla. Pointed out that decision relied upon by ld. Counsel if property interpreted it would be seen that those decisions were only based on legal interpretation but also on fact. According to ld. DR Mr. R.B., sukla, if suggestion of id counsel is accepted it would be different for Department to proceed with acquisition except on concrete proof of understatement. He was of opinion to overcome such difficulty legislature in its wisdom provided where understatement had to be presumed. He drew out attention to sub-s (2) of cl.(a) & (b) which reads as under; (a) where fair market value of such property exceed apparent consideration therefor by more than twenty five percent of such apparent consideration, it shall be conclusive proof that consideration for such transfer as agreed to between parties had not been truly stated in instrument of transfer; (b) where property has been transferred for apparent consideration which is less its fair market value, it shall be presumed, unless contrary is proved that consideration for such transfer as agreed to between parties has not been truly stated in instrument for transfer with such object as is referred to in cl. (a) or cl. (b) of section (1) According to him said clauses are available to competent authorities even for initiation of proceedings .He was of opinion that if presumption was not available at time for initiation , there was no reason to enquire at time of acquisition. In other words, these sections, would be of no use if decisions cited by ld counsel for assessee are followed literally. According to ld. DR, general object of legislature was to acquire these properties where consideration had not been truly stated in document. To achieve such object it had in its wisdom defined which should be considered as true consideration passed in case of transfer. It had presumed fair market value as true consideration passed between parties, it had also presumed, if real consideration is more than 25 per cent of apparent consideration mentioned in transfer deed, it should be treated as conclusive proof that consideration for such transfer as agreed between parties had not been truly stated in instrument of transfer deed. According to him, theory of conclusive proof of understatement or concealment suggested by ld. Counsel for assessee would mean to input something in section which was not there ld. Counsel for Department lastly relied on decision of Punjab & Haryana High Court in case of Sutlej Chit Fund and Financiers. (Pvt.) Ltd. vs. CIT (1986) 55 CTR (P&H) 114 (1986) 161 ITR 174 (P&H) where it had been decided that cls. (A) and (b) of subs. (2) of s. 269C. were available at time of initiation of proceeding. He drew our attention to fact in this case their Lordships had in detail discussed decisions of various High Courts on this point He claimed this decision should be followed in preference to decision cited by learned counsel for assessee as this being recent decision. 5. We have considered submissions made by parties. We are of opinion that ld. DR is justified in stating that to form belief qua object of understatement, if other requirements are satisfied, competent authority can have resort to presume availability of sub s. (2) (b) for s. 269C We are therefore of view that respectfully following decision of Sutlej Chit Fund and Financiers (Pvt) Ltd. (Supra) learned competent authority validly initiated proceeding in this case. To elucidate matter we should refer entire section of 269C; 269C.Immovable property in respect of which proceedings for acquisition may be taken (1) Where competent authority has reason to believe that any immovable property of fair market value exceeding (one hundred thousand rupees) has been transferred by person (hereafter in this chapter referred to as transferor) to another person (hereafter in this chapter referred to as transferee) for apparent consideration which is less than fair market value of property and that consideration for such transfer as agree to between parties has not been truly stated in instrument of transfer with object of (emphasis supplied) (a) facilitating reduction or evasion of liability of transferor to pay tax under this Act in respect of any income arising from transfer; or (b) facilitating concealment of any income or any money or other assets which have not been or which ought to be disclosed by transferee for purposes of Indian ITA, 1922 (11 of (1922) or this Act or Wealth tax Act 1957 (27of 1957) .the competent authority may subject to provisions of this Chapter, initiate proceedings for acquisition of such property under this Chapter; Provided that before initiating such proceedings competent authority shall record his reasons for doing so provided further that no such proceedings shall be initiated unless competent authority has reason to believe that fair market value of property exceeds apparent consideration therefor by more than fifteen percent of such apparent consideration (2) In any proceedings under this Chapter in respect of any immovable property (a) where fair market value of such property exceeds apparent consideration therefor by more than twenty five percent of such apparent consideration it shall be conclusive proof that consideration of such transfer as agreed to between parties has not been truly stated in instrument of transfer; (b) where property has been transferred for apparent consideration which is less than its fair market value, it shall be presumed unless contrary is proved, that consideration for such transfer as agreed to between parties has not been truly stated in instrument of transfer with such object as is referred to in cl. (a) or cl. (b) of sub section (1) Subs. (1) of s. 269C deals with initiation of proceedings and sub-s. (2) deals with rules of evidence to determine understatement of consideration in transfer deed. Proceedings for acquisition can be initiated by competent authority if he has reason to believe that any immovable property of fair market value exceeding prescribed amount has been transferred by person to any other person for apparent consideration which is less than fair market value by more than 25per cent to facilitate reduction or evasion of liability of taxes or facilitating concealment of any income for wealth in case of transferer and transferee respectively. It will be seen that to initiate proceedings competent authority is also to look into fact whether consideration has been truly stated in instrument of transfer deed; whether consideration had been truly stated or not is matter to be considered by competent authority to initiate proceedings. This is first and foremost duty of competent authority to initiate proceedings whether consideration is truly stated or not guideline has been given in this section itself i.e. sub s. (2) There are two types of understatement which had been envisaged by section One is consideration understated by less than 25per cent and another by more than 25per cent . If it is less than 25per cent onus is on competent authority to prove that consideration had not been truly stated in deed. On other hand if consideration is understated by more than 25per cent from fair market value onus is on parties claiming that consideration had been truly stated in deed. As decision whether consideration and been truly stated to be considered by competent authority at time of initiation of proceeding it is not understand able why he cannot take resort to sub s. (2) (b) to presume that he consideration was not truly stated where it was less than 25 per cent of market value However even if we agree with submissions to DR we do not find that competent authority was justified in initiating proceedings in this case as market value of property was not more than 25 per cent as stated in transfer deed. For that reason, subs s (2) claimed. (b) was not available to competent authority to initiate proceedings. We find Valuation Cell Officer had estimated value of entire property at Rs.. 2,26,411 as against apparent consideration mentioned in transfer deed of Rs.. 1,96,000 ld. Competent authority however, had preferred valuation made by Inspector to initiate proceedings. valuation made by Valuation Cell is to be taken as opinion of expert. ld. Competent authority has not given any congent reason of not following report of Valuation Cell and we also do not find anything in report of Inspector as reason for differing with report of Valuation Cell. In view of above, we find that valuation made by Valuation Cell Officer should be accepted. Moreover if proper deductions are again allowed to situation of land in land abound by residential unit and much away from commercial area of Frazer Road valuation would come to figure of apparent consideration stated in transfer deed and acquisition cannot be made in respect of these transfers. We, therefore, cancel order of ld. IAC (Acq.) 6. In result appeals are allowed. *** DILIP KUMAR ARORA v. INSPECTING ASSISTANT COMMISSIONER OF INCOME TAX (ACQ.)