COMMISSIONER OF INCOME TAX Vs. KRISHNA LAL AJMANI

JUDGEMENT

(1.) THIS reference under Section 256(1) of the Income-tax Act, 1961, is at the instance of the Revenue. The Income-tax Appellate Tribunal, Patna Bench, has referred the following question to this court for its opinion :

(2.) THE material facts are as follows :

(3.) SAHAY Properties and Investment Co. (P.) Ltd.'s case [1983] 144 ITR 357 (Patna) was a converse case in which the question was whether the intending purchaser was liable to tax on income from the house property even though the transfer deed had not been executed in his favour. This court held that as the consideration money had been paid in full and the assessee had been put in exclusive and absolute possession of the property, with authority to dispose of and even alienate the same, to get the conveyance deed registered and executed in its favour, it could not absolve itself of the liability to pay tax on its income merely because it had not exercised its option to get the transfer deed executed and registered since that would amount to giving premium for its own default. In the present case', it was pointed out, although an agreement of sale has been executed, only part of the consideration money of Rs. 1 lakh as earnest money has been paid by the intending purchaser ; the balance money to be paid in instalments.