LAWS(CAL)-1981-7-18

COMMISSIONER OF INCOME TAX Vs. DHANRAJ DUGAR

Decided On July 27, 1981
COMMISSIONER OF INCOME-TAX Appellant
V/S
DHANRAJ DUGAR Respondents

JUDGEMENT

(1.) In this reference under Section 256(1) of the I.T. Act, 1961, the following question has been referred to this court:

(2.) The assessment year involved in this case is 1972-73. In that assessment the ITO noted that the assessee's system of accounting was mercantile. The assessee is an individual and he derived his income from the business as a broker of land and building. The assessee had shown a sum of Rs. 1,00,000 in Part II of the return and had claimed that it was a capital receipt not liable to income-tax. The assessee contended that there was an agreement dated the 15th October, 1959, to which we shall refer later, between the assessee and three others, viz., Sri Banwarilal Pasari, Sri Purushottamdas Pasari and Sri Sankarlal Pasari in respect of the purchase and sale for profit of permises No. 12-A and 12-B, Russel Street, Calcutta. It would be relevant in view of the contentions that have been raised before us to refer to some of the clauses of the agreement. The agreement, after setting out the names of the parties, inter alia, provided as follows: "That the first, second; third, and fourth parties will purchase the properties known as 12-A and 12-B, Russel Street, Calcutta, at or for a sum of Rs. 8,00,000."

(3.) It may be mentioned that Dhanraj Dugar who is named as the party of the fourth part is the assessee before us. Other relevant clauses of the agreement are as follows: