RAMAN PILLAI M Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference by the Income-tax Appellate Tribunal, Madras lunch, under Section 66 (1) of the Indian income-tax Act, 1022. The assessment year concerned is 1959-60; and the accounting period, the twelve months ended 31-3-1959. The question referred is:

(2.) THE assessee agreed to purchase 92 cents of land In Trivandrum with the buildings thereon from one J. M. Sawyer for Rs. 1,40,000/-. THE agreement was on 25-4-1958 and the advance paid an that day was Rs. 5,000/-, THE arrangement was that the sale should he completed by 30-8-1958. It was effected within that time, by a sale deed dated 23-8-1958.

(3.) IT Is clear from what has been stated above that only 221/2 cents of the 92 cents purchased were sold by the assessee and that the remaining 691/2 cents are still with him and continue to be his property. The only foundation for the assumption that the transaction was an adventure in the nature of trade is the fact that the assessee did sell those 221/2 cents for a total consideration of Rs. 60,600/- between 25-4-1958 and 13-9-1958. Apart from the said sum of Rs. 60,600/- and the balance of the consideration that still remains unpaid, the rest of the amount due to the vendor was found by the assessee not by sale of any portion of the land but from his own resources, Rs. 45,000/- being raised by an overdraft from the Bank.