2001 (2) TMI 51

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..... he agreement is dated January 2, 1980. The consideration for the sale is Rs.30 lakhs. Rs.5 lakhs was payable before October 10, 1979, and the balance of Rs.25 lakhs in five equal instalments starting from April 10, 1980. The vendee was to pay interest at the rate of 15 per cent. on the outstanding unpaid purchase price. Possession of the building was delivered to the vendee on March 31, 1979. After taking possession of the building, the vendee put up 5th floor on the building, received all the rentals from the tenants, and was paying interest on the unpaid purchase price to the vendor in the sum of Rs.3.75 lakhs, during the assessment years 1980-81 and 1981-82 at the end of which the sale deed was yet to be registered. The assessee-ve .....

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..... me-tax Act to revise the income is concerned, there can be no doubt that his powers are as extensive as those of the Income-tax Officer. However, when it is found that a particular head of income had not been part of the assessment, the proper course for the Commissioner would have been to send the matter back to the Income-tax Officer to redo the assessment indicating the additional head under which the income should be considered, if the Commissioner was of the view that such consideration was required. So far as the assessee's liability to be taxed on the rental income of the property is concerned, counsel for the assessee is right in pointing out that the assessee, though in the eye of law, is still the owner and would con tinue as su .....

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..... he sum of Rs.3.75 lakhs received by her as interest on the unpaid purchase price was income from house property and had also claimed deductions permissible under that head, that claim of the vendor was clearly erroneous. The interest received by the vendor was required to be treated as "income from other sources" and the deduction if any limited to the amount of the expenditure incurred for the purpose of earning that income. The Tribunal, therefore, was in error in holding that the interest on the unpaid purchase price could not be taxed in the hands of the vendor solely on the ground that the vendor had not shown that amount under the head "Income from other sources". That conduct of the vendor cannot serve as a bar to the amount of .....

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