Part performance and non-registration did not create a refundable liability for received sale consideration in wealth computation

Sale consideration received under an unregistered sale deed, where possession had already been delivered, was treated as part of the assessee's wealth and not as a refundable liability. The purchaser's possession was protected under part performance, and the assessee had no enforceable contractual obligation to refund the amount. Mere non-registration did not convert the received consideration into a liability, and even if legal title was incomplete, the money remained with the assessee without any restitutionary duty. Section 65 of the Contract Act was held inapplicable on these facts, so the inclusion of the consideration in wealth was upheld.

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Issues: Whether the sale consideration received for agricultural land, transferred under an unregistered sale deed with possession already delivered to the purchaser, was liable to be included in the assessee's wealth as an asset or excluded as a refundable liability.

Analysis: The assessee had already handed over possession and received the full consideration. The purchaser's possession was protected under the doctrine of part performance, and the assessee was not entitled to disturb it. There was no contractual obligation to refund the consideration. The circumstance that registration had not been completed did not convert the received amount into a liability. Even assuming the transfer of legal title was incomplete, the consideration already received remained with the assessee without any enforceable obligation of refund. The principle of restitution under section 65 of the Contract Act did not apply on these facts.

Conclusion: The sale consideration of Rs. 46,250 was rightly included in the assessee's wealth and the challenge to such inclusion failed.

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