COMMISSIONER OF INCOME TAX Vs. N R BHUSANRAJ

JUDGEMENT

(1.) THE question referred before us is as follows :

(2.) FOLLOWING factual matrix will help to understand the controversy. The assessee sold the property at No. 2, Barracks Maidan Road, Vellore, for Rs. 2,00,000 by a sale deed dt. 11th June, 1981, to one Smt. D. Narmada. This sale deed was, however, not presented for registration though it was executed on that date. Instead, another deed came to be executed on 22nd June, 1981, between the assessee and the said D. Narmada under the heading 'Deed of resale agreement'. Under this, it was specifically mentioned that there was a sale of the concerned property for Rs. 2,00,000 on 11th June, 1981, and since the assessee herein had requested to resell the aforesaid property for the aforesaid amount, the vendee D. Narmada consented and agreed to sell on the following conditions. In those conditions, it was stated that the sale deed shall be got registered at the instance of the assessee after the payment of the balance amount of sale consideration of Rs. 1,99,500 as the amount of Rs. 500 was received by the assessee by way of an earnest. It was then agreed by the said vendee D. Narmada that in default of the payment of the sale consideration of Rs. 1,99,500, the resale agreement would be rendered invalid. It was also agreed that this sale deed was to be got executed after a period of two years i.e., after 21st June, 1983, but within a period of three years i.e., before 21st June, 1984. It is also agreed that if the vendee Narmada failed to execute the sale deed, the assessee shall be at liberty to file a suit in the Court and obtain the resale. Both the documents were got registered on 22nd June, 1981.

(3.) A further appeal came to be filed before the Tribunal. The Tribunal, however, found in favour of the assessee holding that the transaction could not be viewed to be a transfer as there was no intention between the parties to transfer the asset. The Tribunal, more or the less, came to the conclusion that since the sale deed was registered on 22nd June, 1981, on the very same day when even the agreement of sale was executed and registered between the parties wherein the vendee had agreed to sell back the same property for the same consideration within three years, there would be no question of any intention on the part of the assessee to transfer the property. The Tribunal has held thus :