TMI Blog1993 (12) TMI 98X X X X Extracts X X X X X X X X Extracts X X X X ..... endor agreed to sell 466 cents of land with buildings thereon at Calicut either to the appellant or to its nominees. As per the agreement, if the purchase price was not paid within the specified time, the appellant was to pay interest at 18% per annum. The buildings on the lands purchased were demolished and the scrap materials were sold for Rs. 5,88,001, which was treated as business income. Unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owed as revenue expenditure. He allowed only the interest referable to 65.57 cents of land retained by the assessee. Thus, he gave part relief. The assessee is on further appeal. 3. We have heard rival submissions. The assessee had furnished the particulars of property agreed to be purchased from Peirce Leslie Co. Ltd. and sold afterwards, as follows: 1. Sale deed dt. 27th Dec., 1984 in favo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ala Roadlines. 13. Sale deed dt. 29th Dec., 1986 in favour of Kerala Roadlines. In addition, the agreement dt. 27th Sept., 1983 with Peirce Leslie Co. Ltd. has also been furnished. We have perused the documents. The agreement for sale of 466 cents of land with buildings thereon is between M/s Peirce Leslie Co. Ltd. and the assessee. Under the agreement, the vendor is bound to transfer the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in the transactions between the vendor and sister concerns, who have ultimately purchased 399.43 cents of land out of the total of 466 cents of land agreed to be purchased by the assessee or its nominees under the agreement dt. 27th Sept., 1983 with the vendor. But the assessee in this case did not content to remain as a mere intermediary. It had entered on the entire property and demolished the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ile, would not only forfeit the advances already made by it towards the purchase of the property under the agreement but also would stand exposed to civil and criminal action. Thus the payment of interest in the facts and circumstances of the case is to be viewed as an expenditure under s. 37 of the IT Act, especially when the sale proceeds of the scrap materials from the demolished structures hav ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
