9911796707
TMI Blog1961 (12) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... daries Ltd. for a period of 99 years in respect of certain lands fully described in the second schedule of the deed of sale dated February 25, 1948. The assessee carried on business under the name of East Kajora Collieries on the leasehold interest on the said 400 bighas of coal lands and the said surface lands. On December 6, 1946, and on December 27, 1946, there were two agreements for sale between the assessee on the one part and Jogesh Chandra Dutt, Abdul Malik Nagi and Abdul Qayoom Khan on the other. On January 1, 1947, the assessee delivered possession of East Kajora Collieries together with underground rights etc. and all lands, buildings and structures to the said Jogesh Chandra Dutt, Abdul Malik Nagi and Abdul Qayoom Khan. On April 16, 1947, there was an agreement for sale in writing. The agreement was between the assessee called the vendor of the one part and said Jogesh Chandra Dutt, Abdul Malik Nagi and Abdul Qayoom Khan. On behalf of a company to be formed in the name of East Kajora Collieries Ltd. called the purchasers of the other part. By the April 1947 agreement, the two December agreements of the year 1947 were cancelled.By the April 1947 agreement the assessee a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpany. If the purchasers in spite of the vendor's making out a marketable title failed to pay the balance of the consideration money and to complete the purchase, the sum of ₹ 5,50,000 shall be forfeited or the vendor shall be at liberty to enforce specific performance of the agreement and claim damages. If the vendor failed to make out a marketable title or failed to procure the consent of the superior landlord the purchaser shall be entitled to hold the vendor liable for all losses and expenses. The schedule to the agreement of April 16, 1947, comprised the underground coal mining rights of the 400 bighas of land situated in Chaks Madhur Band and Damari Band held by the vendor as the lessee under the aforesaid lease dated December 15, 1939, together with all machinery, tools, implements, stores, furniture, motor trucks, buildings, etc. The East Kajora Collieries Ltd. was incorporated on May 2, 1947. In that company shares of the value of ₹ 1,25,000 were allotted to the assessee. On February 25, 1948, a sale deed was executed by the assessee in favour of the East Kajora Collieries Ltd. and the same was registered on February 26, 1948. The balance sum of ₹ 2, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that by delivery of possession no title to any property in fact passed or could pass prior to the actual conveyance dated February 25, 1948. Counsel on behalf of the Commissioner of Income-tax contended first that title to movable property passed by delivery of possession on January 1, 1947, and secondly, that title to the immovable property also passed on January 1, 1947, because possession was given on that date and further that parties intended that title to all the properties should pass on that date. As to the intention of the parties, it was contended that there were three reasons for supporting such intention. First, that possession was given on January 1, 1947. Secondly, the assessee did not include in his return the income since January 1, 1947, for he had parted with the property and thirdly, that the transferee showed income of the period since January 1, 1947, as his income. Counsel on behalf of the Commissioner of Income-tax laid considerable emphasis on clause 2 of the agreement dated April 16, 1947 and the recitals in the conveyance dated February 25, 1948, to illustrate the intention of the parties that title was to pass as and from the 1st day of January, 1947. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5, 1873, and other a confirmation bond dated December 31, 1878. The 1873 document was unregistered. In March, 1879, the confirmation bond was presented to the Collector for registration. The confirmation bond referred to the deed of April, 1873, which was set out in a schedule as a part of the deed of 1878. The memorandum of registration was written not on the first sheet of the deed of 1878 but at the end of the deed of 1873 which was annexed as a schedule to, and was consequently a part of, the deed of 1878. The Allahabad High Court, from where the appeal went up to the Judicial Committee, in the decision in Mathura Das v. Mitchell** held that as a matter of fact the confirmation bond of 31st December, 1878, was not registered, whereas that of the year 1873 contained the registration certificate, and further held that neither of the documents was admissible in evidence. The Judicial Committee held that though the deed of 1873 could not be given in evidence that was no reason why the deed of 1878 should not be given in evidence and that the deed of 1878 referring to the deed of 1873 was proved to have been duly executed and registered. The Judicial Committee observed that the Regi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bombay decision are not of any help in the present case, because the question raised here is that on construction of the April 1947 and February 1948 deeds, intention is sought to be gathered that title to property passed anterior to the deed of sale. Counsel on behalf of the assessee construed the April 1947 agreement and the 1948 conveyance as indicating in clear words that the transfer was not intended by the agreement of April 16, 1947, and that in fact the immovable properties were conveyed and transferred by the deed of February 25, 1948. He laid emphasis on clause 2 of the agreement which stated that "the vendors shall sell, transfer, etc." These words according to counsel for the assessee showed that this transfer or assignment was to be on a future date. He further contended that the operative part in the sale deed showed beyond doubt that the conveyance or the transfer was made by the deed itself. It was secondly contended that the schedule to the agreement dated April 16, 1947, described the coal and mining rights together with machinery, tools, implements, stores, furniture, etc., with the result that the assessee did not make any distinction either between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her any tax was payable in respect of profits or gains arising from the sale, exchange or transfer of the capital as set effected after March 31, 1946, and before April 1, 1948. As to immovable properties it was held in that case that the title passed only when the sale deed was executed on May 17, 1946, and not when the agreement was concluded on March 16, 1946. So far as the movable properties were concerned, it was contended that property passed on March 30, 1946, and, therefore, they were not assessable. It was held by the Supreme Court that there were two sale transactions and that different prices were fixed therefor and the actual conveyance under the sale was only in respect of immovable properties. On behalf of the department, it was contended that the parties really intended to sell under the deed dated May 17, 1946, not merely the immovable properties mentioned in part 1 of the agreement of the sale but also the properties mentioned in part II thereof. This contention was negatived by holding that it would be rewriting the whole document. The department also contended that some of the properties mentioned in part II of the schedule were really fixtures though described a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
