TMI Blog1985 (12) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... -576, New Rajinder Nagar, New Delhi, the sum of rupees four thousand only (Rs. 4,000) by way of earnest money for the purchase by him of house No. R-576, New Rajinder Nagar, New Delhi, the ownership of which stands in the joint name of Mahesh Chander and Surinder Nath Dewan sons of Dewan Bhim Sen and the vendor being legally and fully authorised to receive the same, in consideration for the sum of rupees one lakh and twenty one thousand only (Rs. 1,21,000) only (inclusive of the earnest money but exclusive of cost of transfer) to be paid by Shri Sohan Nayyar and sale completed on or before the 31st of March, 1979 day of............... 1979. . Sd- Witness : Sd/- (Mahesh Chander Dewan)" Gurcharan Dass Vendor Mahajan . Mahajan House, . Assandh Road, Panipat. . 16th Feb., 1979" . An on 2-9-1979 another agreement claimed to be a tripartite agreement was entered into as between the landlords, viz., Shri Mahesh Chander Dewan and Shri Surinder Nath Dewan; the assessee, namely, Shri Sohan Nayyar and Shri Triloki Nath Dhingra and Shri Om Prakash Dhingra, sons of Shri Nand Lal Dhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase of the property and the consideration agreed to, in the tripartite agreement dated 2-9-1979 as between the owners of the property, the assessee-tenant and the new purchasers, namely, Triloki Nath Dhingra and Om Prakash Dhingra, is the income of the assessee? 4. Admittedly when the assessee agreed to purchase the property, the consideration was Rs. 1,21,000 and when he agreed to part with his possession as tenant and the property was to be conveyed to a third party, the consideration was Rs. 1,75,000 and in this view of the matter, what the assessee agreed to in the tripartite agreement was to dispossess himself of the possession of the property which he handed over to the third party, the purchaser of the property. Accordingly, what the assessee surrendered in terms of consideration for Rs. 54,000 was his possession as a tenant earlier and as a purchaser later under the so-called agreement dated16-2-1979. The assessee, as such, surrendered his tenancy rights and possession as a tenant for Rs. 54,000 and that is pure and simple a consideration paid by the third party to the assessee and it is not taxable as an income in view of the ratio laid down by the Hon'ble Delhi High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompletion of the sale referred to above was extended by mutual consent up to30-9-1979. The intervening period was, prima facie, utilised by the assessee to look for a person who might be willing to purchase the said property for a higher price. Ultimately, he got such persons, namely, Shri Om Prakash Dhingra and Shri Nandlal Dhingra who agreed to purchase the said property for Rs. 1,75,000. A formal agreement to sell was thereupon entered into on2-9-1979. A copy of it is placed at paper book 9 to 13 of the assessee's paper book. In the preamble of the agreement, it has been noted that the first party (i.e., the vendors) agreed to sell for Rs. 1,21,000 the aforementioned property to the second party (i.e., the assessee), out of which Rs. 4,000 were paid as earnest money on 16-2-1979, and the remaining sum of Rs. 1,17,000 was to be paid at the time of the completion of the agreement of sale, which was to be executed by 31-3-1979, but which time was extended up to 30-9-1979 with mutual consent. It was further noted therein that the first party agreed to execute the sale deed in favour of the second party or in favour of any other person or persons as desired by the second party, and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed over to third party in part performance of this agreement and the third party can use the above property in any manner they like without any interruption or interference by the first party or the second party. (3) (4) That as soon as the permission for sale of the above house is granted from the competent authority/authorities, the first party shall intimate the above fact to the third party and the third party shall provide necessary stamp papers for execution of the sale deed within one month from the date of the said intimation whereafter within one week, the sale deed shall be executed and cause registered by the first party in favour of third party on payment of balance of Rs. 10,000 to the second party, as provided above. (5) to (7) (8) That in case, the third party is deprived of the above property or any portion thereof or possession thereof for any defect in the right, title or interest or for any default or fault of the first party, then the first party shall be liable to refund to the third party the above consideration amount of Rs. 25,000 as liquidated damages. In such event the second party shall also refund to the third party, the said sum of Rs. 44,000, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estion in accordance with which (instead of the agreement to sell dated 2-9-1979) the said transaction was ultimately executed on 5-8-1981. What was this additional agreement and what were the terms of it and in what circumstances the final sale agreement differed from the terms of the original agreement to sell has not been looked into or examined by the authorities below before coming to the conclusion to which they came. In my opinion, it would not be possible to say anything on the merits of the case without examining all the relevant facts. That may be done by the authorities below in the relevant accounting period in accordance with law. Prima facie, the agreement to sell to which I have made detailed reference above does not support the assessee's version that he was to receive Rs. 54,000 from the vendee on account of the giving up of his rights of tenancy. In fact, there is no reference to the transaction being related to the rights of tenancy in the agreement to sell. The assessee had obtained a right to purchase the property in question either by himself or to his nominee and it appears he did exercise this right of getting the property in question conveyed to his nominee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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