MANNALAL NANHELAL Vs. SITAMBERNATH RAMHIRDELAL

JUDGEMENT

(1.) IN this reference under section 66(1) of 1he Income -tax Act at the instance of the assessee, the questions formulated by the Appellate Tribunal, Bombay, for our opinion are: -

(2.) WHETHER on the facts and circumstances of the case the Income -tax Officer was entitled to re -open the assessment in respect of the escapement of deemed income under the second proviso to section 10(2)(vii) of the Act, when the notice dated 11 -11 -1952 under section 34(1)(b) mentioned only capital gains ? and

(3.) ON 31st March 1947 the assessee M/s. D.B. Ballabhdas Mannoolal Kanhaiyalal, an unregistered firm which was the owner of a colliery known as 'Hindusthan Lalpeth Colliery of Chanda', entered into an agreement with the Perfect Pottery Co. Ltd., Jabalpur, for the sale of the colliery including machinery, fixtures, land etc. for Rs. 4 lakhs. The agreement provided, inter alia, (1) that the vendors would sell and the purchasers would purchase as from 1st April 1947; (2) that out of the consideration money of Rs. 4 lakhs, Rs. 50,000 would be paid on the execution of the agreement to sell, Rs. 50,000 on the execution of the deed of sale and the remaining a mount in three equal instalments of Rs. 1 lakh each on the dates specified in clause, (2) of the agreement; (3) that the purchase would be completed within three months from the date of the execution of the agreement or within fifteen days of the receipt of the sanction of the Government for the transfer of the mining rights, whichever was earlier, when formal possession of the business and property would be given to the purchasers; and (4) that the possession of the business and property would be retained by the vendors up to the date of the completion of the purchase, who would in the meantime carry on the business as agent for and on behalf of the purchasers in accordance with their instructions and shall account to and be entitled to be indemnified by the purchasers accordingly. The sale -deed was executed and registered on 12th October 1948.