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TMI Blog1959 (6) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... t right was also assigned to the assessee. On 14th September, 1945, the assessee purchased a half share in the reversion from the original owner, and on 5th May, 1946, he entered into an agreement with a housing society for sale of his rights in the land and obtained ₹ 60,000 as earnest money. Under another conveyance, dated 24th September, 1947, the assessee purchased from the original owner of the land his right of reversion in the remaining half share. On 1st October, 1947, the society executed in favour of the assessee a lease in respect of the entire land, and in 1950, the assessee executed a conveyance in favour of the society in pursuance of the covenant under the deed of lease conveying the land S. No. 45 to the society for &# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment years 1946-47 and 1951-52 for assessing tax liability. Counsel submits that tax appropriate to the amount of ₹ 60,000 received by the assessee in the year 1946 was payable in the assessment year 1947-48 and the tax on the balance was payable by the assessee in the year of assessment 1951-52. That the venture of the assessee was a trading venture has been found by the Tribunal and that question is not open to be canvassed and has not been canvassed before us. It is evident that the assessee had purchased the leasehold rights in the land, which were purchased by Bhudarbhai, only ten days after the latter had obtained the same. Thereafter the assessee purchased the rights of the owner in two instalments, and in the venture he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rfeit the amount in the event of failure on the part of the society to complete the contract. This agreement, as is evident from the recital contained therein, was drawn up by an advocate. If in a document drawn up by a lawyer the expression earnest money was used in referring to the amount of ₹ 60,000 received by the assessee, we would require much stronger evidence than is to be found in this case to justify us in holding that the expression earnest money in the agreement was not intended to have the meaning which it normally has, and it was used in the sense of part payment of the price : and the circumstance that this amount of ₹ 60,000 was liable to be forfeited in the event of the housing society failing to carry out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciation under section 43 of the Indian Income-tax Act and assessed them to income-tax under section 4(1)(a) or, in the alternative, under section 4(1)(c). It was held by their Lordships of the Supreme Court that the income, profits and gains derived from the sale of salt in British India were assessable to income-tax under section 4(1)(a) as income, profits and gains received by the company in British India on behalf of the association. In dealing with the question as to when the income may be deemed to be received, their Lordships observed (at page 160 of the report): There can, therefore, be no question that when the gross sale proceeds were received by the agents in India they necessarily received whatever income, profits and gains ..... X X X X Extracts X X X X X X X X Extracts X X X X
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