2003 (11) TMI 37

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....f the agricultural land. He agreed to sell the said land to the present appellant. The appellant was to convert this land into non-agricultural. The appellant paid Rs. 10,000 to the said Pardeshi by way of earnest money and thereafter Rs. 40,000 was paid to Pardeshi. However, Pardeshi did not execute the sale deed in favour of the appellant. There were in all 23 plots. Out of them, 17 plots were sold. The sale deeds were executed admittedly by Pardeshi. However, the present appellant retained the sale proceeds of Rs. 1,25,418 only. Thereafter, disputes arose in between the appellant and Pardeshi. Pardeshi served notice on the appellant and terminated the contract. The appellant filed a special civil suit for grant of specific performance....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ry 10, 2000. This dismissal order is challenged by the assessee under section 260A of the Income-tax Act, 1961, in this court. We heard learned counsel, Shri Kolte, for the appellant, and learned standing counsel, Shri Sonawane, for the respondent, at length. The following substantial questions are involved in this appeal: "1. Whether the compromise decree is a lawful decree? 2. Whether the appellant has a legal right to receive the sale proceeds of 17 plots and whether the amount of sale proceeds was of revenue nature?" We carefully perused the judgment of the Tribunal. The Tribunal did not at all treat the compromise decree as a lawful decree. The Tribunal was under impression that the rights and liabilities of the parties wer....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... favour of the appellant. In the absence of a sale deed, the appellant does not become the lawful owner of the immovable property, agreed to be sold in his favour. In the absence of a sale deed of the land, the appellant has no legal right to sell the plots. Under the circumstances, it cannot be said that the appellant had a right to receive the payment. By way of compromise decree, the appellant was to return the amount of Rs. 1,25,418 to Pardeshi and was to receive back his earnest money of Rs. 50,000. The position, therefore, boils down to this that the appellant returned the sale proceeds of 17 plots, i.e., Rs. 1,25,418 to Pardeshi and, therefore, the said amount cannot be added in the disclosed income, which was initially shown by the ....