YUVRAJ Vs. UNION OF INDIA

JUDGEMENT

(1.) The petitioner-assessee challenges the proposed action under Section 147 of the Income-tax Act, 1961, vide order dated May 17, 2000, of the Deputy Commissioner of Income-tax, Circle 2(1), Dhule.

(2.) The petitioner contends that the late Shri Kisanrao Sonuji Karankal had acquired "right to purchase property", an open plot at Kothrud, Pune. Those rights were sold as per the agreement dated January 2, 1995, to one Shri Lalit Amrutlal Shah and Simil Shridhar Deshpande. The petitioner contends that the late Shri Kisan Karankal entered into an agreement of assignment and transfer. An amount of Rs. 5,50,000 was received from time to time by way of part completion and assignment as compensation from M/s. Bilwa Promoters, Pune and other intervening parties. The prospective purchasers committed breach of agreement and failed to perform their part of contract. Ultimately, on October 11, 1995, the petitioner made a total assignment in favour of Lalit Amrutlal Shah and Sunil Shridhar Deshpande for a total consideration of Rs. 12,00,000.

(3.) It is submitted that the petitioner filed a return on November 6, 1996, in respect of the assessment year 1996-97 disclosing income derived from the said memorandum of agreement dated January 2, 1995. According to the petitioner, the competent authority, the Assistant Commissioner of Income-tax, Circle-2(1) Dhule assessed the income and passed a speaking order under Section 143(3) of the Act on January 9, 1998. The Deputy Commissioner of Income-tax, Circle-2(1) Dhule issued a notice, dated December 29, 1999, purporting to be under Section 154 of the Income-tax Act. The notice was replied by the petitioner on January 5, 2000. According to the petitioner, the notice indicates that the long-term capital gain on sale of right to purchase of a open plot at Kothrud, Pune, was sought to be treated as casual income and bringing it to tax liability at 40 per cent.