9911796707
TMI Blog1990 (2) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... was that no sale deed could be made because of the Land Ceiling Act and that, therefore, no profit was declared. The ITO has tabulated the returned and assessed income for the various years and more than that the assessee has been showing very small income and that no prudent businessman would be labouring so much to earn either a very small income or incur losses. The ITO thereupon issued a letter dt. 19th Feb., 1987 asking the assessee to explain why no profits have been returned although this year the assessee had given a list of 24 flats to allottees who had already made the payment to the maximum. He has noted that the assessee's plea was that no sale deed had been executed so far but pointed out that this was a practice of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this, he relied on the Bombay High Court decision in the case of Estate Investments Co. Ltd., vs. CIT (1980) 121 ITR 580 (Bom) which, according to him, was applicable. He has noted that in this case 90 per cent of the consideration was received by the assessee who has surrendered the right, title and interest in the flat to the members before the date of registration of the sale deeds. He has further relied on the decision of the Gujarat High Court in the case of Arundhati Balkrishna vs. CIT (1982) 29 CTR (Guj) 85 : (1982) 138 ITR 245 (Guj) to state that the transaction was effective from the date on which the document was executed and not when the sale deed was registered. 3. Before us, the assessee's counsel first of all submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red all the rights, titles and interest in the flat to the various members. This basis in quite different from that of the ITO and is not a valid basis for sustaining the addition. It is true that in this case although the assessee has received substantial payment he had not been showing the income but that is no reason for making the addition without a sound legal basis which has to be found by the assessing authorities. From the details given by the assessee's counsel it is seen that a sale deed relating to flat No. D-2 in favour of one Rameshchandra R. Acharya had been registered on 4th May, 1983 which falls in the relevant period before us. The profit in respect of this receipt may be considered for the year before us. The balance canno ..... X X X X Extracts X X X X X X X X Extracts X X X X
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