1988 (8) TMI 140

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....he assessee's claim for exemption under s. 5(1)(iv) of the WT Act in respect of a house that the assessee had agreed to purchase. The authorities below held that no exemption was admissible to the assessee as the property has not been legally conveyed to the assessee. The WTO has not assessed the house as belonging to the assessee but has included in the net wealth of the assessee the amount paid towards purchase of house property atIndore. 3. The facts are that the assessee agreed to purchase a house and an agreement was entered into onthe 24th Jan., 1983between the vendors and the assessee. A sum of Rs. 2,50,000 was paid towards part payment of the price and the balance of Rs. 1 lakh was to be paid at the time of the execution and regi....

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....of Hon'ble the Supreme Court in (1971) 82 ITR 570 (SC) relied upon by the assessee was specifically noted by Hon'ble the Supreme Court. Therefore, the law as laid down in the rulings referred to above cannot help the assessee. 4. We may mention that so far as the assessee is concerned, he had not laid the entire consideration. A sum of Rs. 1 lakh remains to be paid to the vendors. Then, though the assessee was delivered possession of the house it was not with a view to immediate divesting of the ownership. Clause 8 of the agreement to sell states that the house was incomplete and a sum of Rs. 1 lakh paid by the assessee towards part payment of the price was to be utilised by the vendor for the completion of the house. We are, therefore, ....

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....roceeds of the house and, therefore, with the help of the Explanation he was entitled to exemption under s. 5(1)(xxvi). The papers filed by the assessee show that the house atCalcuttawas sold for Rs. 4,25,000. Out of this as per the copy of the accounts filed by the assessee at page 12 of the paper book, Rs. 2,75,000 were deposited in the bank account at Calcutta on 4th Nov., 1982 and Rs. 75,000 were deposited on 4th Dec., 1982 in the account at Indore. Out of this the assessee withdrew, amongst others, Rs. 60,000, Rs. 40,000 and Rs. 1,50,000 for the purchase of the house atIndore. A sum of Rs. 1,25,000 is also claimed to have been withdrawn on24th Jan., 1983for the purchase of the house but since the sale deed was not executed at that time....