1958 (10) TMI 52

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.... is whether the difference in the price at which the land was purchased by the assessee and the price which the partnership firm agreed to pay for the land represents the profit of the assessee. 2. The assessee contracted to purchase certain lands for Rs. 41,500. Before the sale deed was executed, he entered into a partnership agreement with one Datar and the business of that partnership was to develop the land and sell it. The assessee's contribution towards the capital of the firm was Rs. 36,000 and Datar's contribution was Rs. 24,000. Their shares in the profits and losses of the business were in the same proportion. The partnership firm took over the land from the assessee at the agreed price of Rs. 90.000 and the land was co....

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....e conclusion that the land had been taken over by the partnership for Rs. 90,000 and not Rs. 60,000. 4. The case was referred to a third Member and the points which the third Member was asked to decide were these : "(1) Whether on the facts and circumstances of the case, any taxable income accrued to the assessee ? (2) If so, whether the amount is Rs. 48,500 or Rs. 18,500 ?" 5. The third Member of the Tribunal reached the conclusion that the land had been sold at Rs. 90,000. He also expressed the view that the assessee had by the sale made a profit "on paper amounting to Rs. 48,500". Then he added : "I think it is true that the partnership is a separate entity for Income Tax purposes but a partner cannot be ....

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....re us by Mr. Samarth, learned counsel for the assessee. It has, however, been the endeavour of Mr. Samarth to support the order passed and the directions given by the third Member and on which the second question, which we are asked to determine, has been raised. After reaching the conclusion that at the time of the transfer to the partnership the assessee had only secured for himself the profit of Rs. 19,400, the third Member made certain observations and gave certain directions which are as under : "In a case like this, it would nor be fair for an assessee to be called upon to pay tax in respect of the whole of the item of Rs. 48,500 in one year. It has been laid down by the High Court that an assessee has a right to be assessed ....