TMI Blog2005 (8) TMI 296X X X X Extracts X X X X X X X X Extracts X X X X ..... had also been processed under s. 143(1)(a). The assessee filed another revised return on 30th March, 1994 declaring an income of Rs. 135,47,93,338. In this revised return, the assessee omitted the short-term capital gains of Rs. 2,72,50,000 which had been disclosed in the original return. The said return had also been processed under s. 143(1)(a) after making some adjustments. Subsequently, notice under s. 143(2) had been issued. When asked to explain as to why the short-term capital gains were excluded, the assessee explained as under: "That the assessee had purchased 2 crore units of the UTI on 16th Nov., 1991 from the Bank of Saurashtra for Rs. 27,09,50,000 @ Rs. 13.55 per unit. The Bank of Saurashtra had not delivered the units to the assessee. However, as per banking norms, bankers receipt for purchase/sale of 2 crore units was issued. (Bankers receipt is recognised in the banking circle as a promise to deliver the scripts/units within a period of 90 days. In case, the supplier bank fails to deliver the scripts/units within the said period of 90 days, the bankers receipt can be renewed for a further period). On 12th March, 1992, the assessee sold 2 crore units of US 64 to St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , no profits accrued to the assessee in the previous year. The assessee placed reliance on the following decisions: (i) CIT vs. Smt. Suraj Bai (1972) 84 ITR 774 (Raj) (ii) CIT vs. Ramaswamy (1985) 151 ITR 122 (Mad) (iii) Rajagiri Rubber Produce Co. Ltd. vs. CIT (1993) 111 CTR (Ker) 241 : (1993) 203 ITR 663 (Ker) That the income-tax is on real income and since no income accrued to the assessee, no tax was chargeable. That the assessee had neither received the delivery of the units of US 64, nor received any documents/transfer deeds authorizing for transfer of such units in the name of the appellant. That the future events have got to be taken into account, co-terminus, the nature of transaction. That doctrine of relating back is applicable in respect of future events. For this proposition, reliance was placed on the following decisions: (i) Assam Roller Flour Mills vs. CIT (1996) 133 CTR (Raj) 355 : (1997) 227 ITR 43 (Raj) (ii) Durga Prasad Ramniwas Poddar vs. V. Saswaney, WTO Anr. (1984) 43 CTR (Bom) 15 : (1985) 153 ITR 76 (Bom) (iii) CIT vs. S. Baldev Inder Singh (1993) 203 ITR 837 (P H) That under the provisions of IT Act, the tax is on real income and not on noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Representative contended that the CIT(A) has all the powers co-terminus with the AO. It was, therefore, pleaded that appeal of the assessee may be dismissed. 7. We have given our careful consideration to the rival contentions. We have already stated the facts which are not in dispute. The assessee had purchased 2 crore units of UTI from the Bank of Saurashtra and also paid the consideration to the said bank. The assessee had received bankers receipt from Bank of Saurashtra confirming the sale of said units to the assessee bank. Issue of bankers receipt has been recognized by the Indian Bankers Association. As per the said receipt, the transaction could be completed without on spot delivery subject to the condition that the delivery is made within 90 days of the issue of the bankers receipt. A period of 90 days could, however, be extended with the mutual consent of the parties. If there had not been any default by the supplier bank in giving the delivery of the said units to the assessee, there is no doubt in our mind that the transaction of purchase and sale could be said to be completed on 16th Nov., 1991 i.e. on the issue of bankers receipts in favour of the assessee. So, howev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted for the second option of paying the damages/interest. Similarly, the assessee has received damages/interest from Bank of Saurashtra. As pointed earlier, interest of Rs. 17.76 crores is claimed to have been disclosed as income in asst. yr. 1997-98. We are, therefore, of the considered view that but for the non-delivery of units of US 64, the transaction of purchase and sale could, be taken as completed on the date of respective purchase and sale of the same. So however, it is not disputed that there was default in the delivery of US 64 units by the supplier bank as well as by the assessee bank. In the event of the default committed by the respective banks the transaction of sale and purchase of US 64. in our view, has got to be treated as not having materialized. The dispute between the Bank of Saurashtra and the assessee as also between Standard Chartered Bank and the assessee has been amicably settled. Damages have been received from Bank of Saurashtra and damages have been paid by the assessee to the Standard Chartered Bank. The subsequent events are not disputed. We agree with the contention advanced on behalf of the assessee that the income-tax is a tax on real income. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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