RAMILABEN RATILAL SHAH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Tribunal, Ahmedabad Bench 'C', has referred the following three questions under Section 256(1) of the IT Act, 1961 (the Act), at the instance of the assessee :

(2.) THE assessment year is 1984 -85 and the relevant accounting period is S.Y. 2039. The assessee filed return of income on 30th June, 1984 declaring total income of Rs. 37,510. The said return was accepted under Section 143(1) of the Act vide order made on 21st Jan., 1987.

(3.) DURING the relevant accounting period, the assessee entered into an agreement for sale on 7th Oct., 1983 whereunder the assessee agreed to purchase property situated at 1st floor of residential house at Athugar Street, Nanpura, Surat. The agreement showed that it was agreed between the parties to purchase the flat for a total sum of Rs. 1,76,121. As per balance sheet furnished by the assessee as well as wealth -tax return filed by the assessee it was found that a sum of Rs. 76,121 had been paid towards purchase price till the end of the accounting year under consideration. In the succeeding year viz., S.Y. 2040, relatable asst. yr. 1985 -86, final sale deed came to be executed on 31st Aug., 1984 and the assessee made balance payment of Rs. 1,00,000. This is apparent from the property account appearing in the books of account of the assessee. At the time of execution of the sale deed a sum of Rs. 14,100 was incurred towards expenditure for stamp paper, registration, etc. Thus, the total cost of the property as reflected in the wealth -tax return, for asst. yr. 1985 -86 came to Rs. 1,90,221.