COMMISSIONER OF INCOME TAX Vs. KRISHNAPPA

JUDGEMENT

(1.) Being aggrieved by the order dated 24.3.2006 made in ITA No. 1276/Bang/ 2003, ITA No. 1116/Bang/2002 and ITA No. 1277/Bang/2003 passed by the Income Tax Appellate Tribunal, Bangalore dismissing the appeals and confirming the order passed by the Commissioner of Income-tax (Appeals), Bangalore, the revenue has preferred these three appeals under Section 260A of the Income-tax Act, 1961 (hereinafter referred to as 'Act') for the assessment year 1996-97. Since the common question of facts and law are involved in these appeals, a common order was passed by the Income Tax Appellate Tribunal in these appeals. Hence, all these appeals are clubbed together and disposed of by this common order:

(2.) The facts of the case in brief as follows:

(3.) A notice was issued to the respondents/assessees and also to the respondents in these appeals. In response to the notice issued under Section 148 of the Act, filed a reply stating that their income is less than Rs. 40,000/- and therefore no books of account has been maintained and no returns of income has been filed. The Assessing Authority after considering the MoU entered into between three assessees and Sri N.K. Mohta held that the assessees have earned the profit of Rs. 75,22,525/- towards the sale transaction of 31.19 acres of land at the rate of Rs. 4 lakhs per acre. Hence, the profit to the each assessee taken at 1/3rd share of 75,22,525/-, which comes to Rs. 25,07,508/-. After giving an opportunity to the assessees to cross-examine Sri N.K. Mohta, the Assessing Authority assessed the income earned from the Real Estate business of Rs. 25,07,508/- for each assessee and called upon them to pay the income tax on the said amount. Being aggrieved by the assessment order passed by the Assessing Authority, the assessee, Sri M.R. Lakshmanappa preferred an appeal before the Commissioner of Income-tax (Appeals)-III, Bangalore. The Commissioner of Income-tax (Appeals) after considering the matter in detail and the other relevant records and the plaintiff and written statement filed in OS No. 113/1996 filed by Sri N.K. Mohta for specific performance and also his statement recorded by the Assessing Authority noticing that Sri N.K. Mohta has not paid the amount directly to the assessees and he has paid the amount to the land owners held that the said amount cannot be taken as income of the assessee. Accordingly, the Commissioner of Income-tax (Appeals) allowed the appeal by his order dated 3.5.2002. Further, the appeals filed by other two assessees were also allowed following the order dated 3.5 2002.