TMI Blog1997 (8) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreement, balance consideration was to be paid in instalments and possession of the Estate has to be given in the following manner:- (i) On payment of Rs. 90 lakhs on or before 22nd Sept., 1982 an area of 192.57 acres would be released; (ii) On payment of Rs. 70 lakhs on or before 31st Dec., 1982 a further extent of 200 acres would be released; (iii) The balance area has to be released on payment of Rs. 45 lakhs on or before 30th April, 1983. The assessee could not pay the instalments on due dates due to labour trouble and litigations before this Court. Therefore, the company extended the time and the entire dues to the company were finally settled on 24th Sept., 1984. 3. A search under s. 132 of the IT Act was conducted on 15th Jan., 1985 in the residential premises of three partners of the firm. Simultaneously search was conducted in the office of the company and assessee-firm. Certain files, deeds of settlement including torn copies of agreements were seized. After the search the assessee approached the CIT to settle its income-tax by assessing a profit of Rs. 25 lakhs distributed equally among the asst. yrs. 1985-86 to 1987-88. According to the assessee, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otted more area to certain purchasers disproportionate to the advance received. There was no evidence of excess payment being returned. From this, the ITO came to the conclusion that there is no refund of such excess amount and the entire amount has been appropriated by the assessee as purchase price. The contention raised by the assessee that in the sale transaction which took place through M/s A G Enterprises the assessee had no role to fix the sale price was not accepted by the ITO. According to him, the terms of agreement would show that the value had to be fixed by the assessee. Thus, the ITO estimated the value of transactions at Rs. 50,000 per acre for 684 acres and for the balance of 15 acres at Rs. 15,000 per acre. The profit for the asst. yr. 1985-86 was assessed at Rs. 51,86,290 and for 1986-87, 23,97,200. The CIT(A) agreed with the view expressed by the ITO. But he found that in respect of sales relating to 220 acres effected through M/s A G Enterprises the assessee was entitled to only a commission from the sale by M/s A G Enterprises and that a firm itself kept the profit which has been made in the transaction. The first appellate authority estimated the sale value at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and it had failed in its duty to examine the reasons given by those authorities before rejecting them. Another decision relied on by the learned standing counsel is that of this Court in CIT vs. Nirmal Liquors (1991) 92 CTR (Ker) 213 : (1991) 190 ITR 636 (Ker) : TC 8R.754. In the above case this Court found that the procedure adopted by the Tribunal in reversing the decision of the CIT was infirm. The Tribunal has summarised the decision arrived at by the ITO and also the CIT and thereafter it had proceeded to summarise the pleas urged by the assessee as well as by the Revenue. Then, on its own, the Tribunal reached the conclusion it did without, in any manner, demonstrating or finding that the decision appealed against was wrong or otherwise unsustainable. Reliance was also placed by the learned standing counsel on a decision of the Orissa High Court in CIT/CEPT vs. S. Sen Ors. (1949) 17 ITR 355 (Ori) : TC 11R.241. It was held therein that the Tribunal while considering the view taken by the ITO must not arrive at its own conclusion unsupported by any facts which are justly receivable as evidence. It was contended by the learned counsel for the assessee that even by applying th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es were reflected in the suspense account No. 1, which the officer came across during the search. There was no other account found with the assessee and therefore, the Tribunal took the view that the buyers had paid only that amount which was credited to them in the suspense account No. 1. This document is a piece of evidence which is relevant in estimating the income. The Tribunal also noted that even though no proper books of account had been maintained, the assessing authority accepted the expenses claimed by the assessee. What was disbelieved by the ITO was only the rate at which sale of property was effected. 8. The conveyance deed was ultimately made by NUCL to the individual purchaser. These registered documents reflect the price of the land. According to the Tribunal, this is a piece of evidence which cannot be discarded. The Tribunal also took into consideration the settlement of account between the firm and the individual purchaser. In the case of one of the purchasers, Mrs. Elizabeth Joseph, it was shown in Annexure-A to the deed of settlement that Rs. 57,000 was paid to the firm on 18th Jan., 1984. Annexure B gave the details regarding splitting of the amount. Consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xcess of sale consideration and the assessee had not proved by evidence the refund of the excess, it should be presumed that the entire advance has been appropriated towards the sale price, commission and service charges. In this type of cases the torn and mutilated papers recovered from the premises of the assessee during the search could be considered as evidence. According to the Tribunal, if those papers show that the intended agreement was for a higher rate than what was shown in the document and higher amounts tally with the advance received, then, it has to be held that the advances received was the true consideration. The estimate would be on the basis that the amount received represented the sale consideration. The Tribunal then proceeded to consider the second type of cases coming under the second category. It found that since the case of the Department that the assessee had collected unrecorded amounts, each transaction has to be considered individually with reference to the evidence relied on by the Department. Individual cases were, therefore, considered by the Tribunal and it came to its own conclusion regarding the amount alleged to have been received by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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