Attribution of income from routed land transactions requires proof that the assessee funded or received the disputed amounts as its own income.

Income from land transactions cannot be attributed to an assessee merely because the purchases were routed through connected companies or intermediary buyers to comply with land ceiling restrictions. Where the financing for acquisition came from a finance company, the assessee did not advance the purchase consideration, and the sums paid to intermediaries were part of the acquisition cost without evidence of being returned to the assessee, the profits booked in related hands and the intermediary payments were not taxable as the assessee's income. The additions were therefore unsustainable on the facts found.

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Issues: Whether the amounts arising out of the land transactions, including the profits of Rs. 2,10,000, Rs. 41,039.67 and Rs. 10,402, could be treated as the assessee's income.

Analysis: The transactions were structured through inter-related companies and intermediary purchasers because the Punjab Security of Land Tenures Act, 1953 restricted acquisition of agricultural land beyond the permissible area. The financing for the purchases came from the finance company, while the assessee itself did not advance the consideration for the original acquisition. The amounts paid to the intermediary purchasers were part of the cost of completing the land acquisition through the statutory restriction and were not shown to have come back to the assessee. On the facts found, the profits booked in the hands of Raisina and the sums paid to the intermediary purchasers could not be treated as income of the assessee merely because the parties were connected or acted as dummies.

Conclusion: The amounts in question were not the assessee's income and the additions were not sustainable; the findings were against the Revenue.

Final Conclusion: The reference was answered in favour of the assessee, with the disputed additions set aside and costs awarded to the assessee.

Ratio Decidendi: Income arising from a land transaction cannot be attributed to an assessee merely because connected persons acted as intermediaries or dummies, unless the evidence shows that the assessee actually financed the acquisition or received the disputed amounts as its own income.

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