9911796707
TMI Blog1987 (9) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... led in the said document. 2. A perusal of the document shows that one K. S. Raman had entered into an agreement with the vendor for the purchase of the property on 14-3-1975. Raman was the tenant of the vendor. He did not hand over possession of the property nor did he complete the sale within the period of six months as stipulated. He was, therefore, liable to pay Rs. 1,100 for damages for use and if he continued to occupy the property without delivery of possession he should be liable to pay Rs. 550 p.m. as damages for use and occupation. Further, the premises were mortgaged to one Rangachari for Rs. 25,000 under a registered mortgage deed dated 14-7-1969. The vendor had reason to believe that some amounts were paid by Raman which the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vey, transfer and assign unto the PURCHASER the property described in the Schedule hereunder and the right to recover damages for use and occupation of the premises from K. S. Raman, written together with all fixtures, yards, waterways, water courses, all threes, all electrical, sanitary and other fittings and fixtures and all the easements, advantages and appurtenances whatever to the said property or any part thereof now or heretobefore enjoyed and appurtenant thereto and all the estate, right, title, interest, claim and demand whatsoever of the VENDOR, if any, into or upon the paid property TO HAVE AND TO HOLD the said property unto the PURCHASER absolutely and for ever free from all encumbrances. The PURCHASER shall be entitled to take ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mbrances. THE VENDOR further covenants and assures the PURCHASER that there is no lispendens and that there is no will or other document affecting the VENDOR's title to the property. THE VENDOR further covenants with the PURCHASER that she has paid off all the property tax and the other taxes including urban land tax due on the property up-to-date to the Government and the Corporation of Madras. THE VENDOR also hereby undertakes to pay the urban land tax not so far paid by her as and when the same is demanded by the Government. THE VENDOR both hereby agree and undertake to indemnify the PURCHASER against all claims, costs, losses and damages that the PURCHASER may be put to on account of any defect in title of the VENDOR to convey the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g to tax again the amount of Rs. 20,000. 7. We have considered the submissions of the parties. The property income is assessed on a notional basis. The property was let out to Raman and it was not vacant. Therefore, the annual assessment of property income does not preclude the assessment of capital gains separately on the sale of the property. Rents had not been received by the assessee but the assessee assigned to the purchaser the right to recover the rent which was of Rs. 20,000 and this was treated as part of the consideration of Rs. 1,01,000, according to the document. We are, therefore, unable to agree with the AAC that this amount of Rs. 20,000 was an admissible deduction. We restore the amount deleted. 8. Coming to the amount o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and showed this amount as part of the sale consideration. Therefore, as far as the assessee was considered notionally the amount of Rs. 35,000 which even if could be deemed to have received, was paid back to the purchaser to enter into litigation for getting vacant possession of the property, which was part of the contract of sale. No doubt, the fixation of Rs. 35,000 is not with reference to any exact amount of legal expenses incurred; but in a commercial transaction one has to make an evaluation on a commercial basis of probable expenditure necessary for completion of the transaction if the transaction were not to fall through. The point to be seen is whether Rs. 35,000 could be considered as reasonable expenditure for getting vacant pos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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