Full Judgment
S. Sankarasubban, J.
These ITRs, are at the instance of the revenue, the following questions of law have been referred to this court :
'1. Whether on the facts and in the circumstances of the case, was the Tribunal right in law and act in holding that in spite of the assessee acknowledging receipt of Rs. 5,98,000 in the agreement cited supra, it can be said that only a sum of Rs. 2,00,000 was actually received by him on 1-3-1983, which was accounted for, in his books on the same day ?
2. Whether, on the facts and in the circumstances of the case, was the Tribunal justified in law and fact in holding that the land measuring 2.52 acres were not actually sold for a sum of Rs. 12,591 per cent as alleged by the revenue ?
3. Whether, on the facts and in the circumstances of the case, was the Tribunal right in law in holding that the agreement dated 1-3-1983 was not acted upon either in relation to the late of Rs. 12,951 per cent or in relation to rental clauses found therein?
4. Whether, on the facts and in the circumstances of the case, was the Tribunal right in law and fact in finding that it is not established that the sum of Rs. 1,36,060 has gone to Sri P.J. Thomas or was intended to be paid to him?.'
The facts of the case are as follows :
2. Assessee had purchased land measuring 3.73 Acres in Fort consideration of Rs. 21.26 lakhs which would work out at the rate of Rs. 5,700 per cent out of the above, an extent of 1.21 Acres of land was sold by the assessee in 1982. From the remaining portion, 60 cents of land were sold to minor daughters of Mohd. Salim Pasha of Bombay under sale deed dated 25-2-1983 for an apparent consideration of Rs. 4,80,000, at the rate of Rs. 3,000 per cent. Another 1.10 Acres of land were sold during the year relevant to the assessment year 1984-85 to two minors as well as to Annamma Tomas for documented consideration of Rs. 8,000 per cent. The remaining 82 cents were sold during the period relevant to the assessment year 1985-86 to the relatives of Maria Pasha, assessees wife at the purported consideration of Rs. 8,000 per cent.
3. Pursuant to the search under section 132 of the Income Tax Act conducted at the residential premises of Salim Pasha of Bombay as well as the business premises of M/s. Fair Deal Exports, Bombay, a proprietory concern of Salim Pasha, and also at the business premises of M/s. Fair Deal Exports at Cochin, certain receipts and documents were seized by the department. After elaborate enquiries and recording sworn statements, the assessing officer came to the conclusion that the land was sold at the rate of Rs. 12,951 per cent and not at the rate of Rs. 8,000 as declared by the assessee. The assessing officer computed the capital gains on the above basis for the assessment years 1983-84, 1984-85 and 1985-86. On appeal, the Commissioner (Appeals) confirmed the above finding. The assessee filed second appeal before the Tribunal. The Tribunal, after hearing both sides, set aside the orders and held that in the circumstances the property was sold only at Rs. 8,000 per cent. As already stated, it is on the basis of the agreement and also the receipts that the assessing officer fixed the land value at Rs. 12,951. The agreement is dated 1-3-1983. According to the assessee, the agreement was not acted upon. The receipt also is not correct.
4. After considering the evidence and no the basis of the assessment order passed against Pasha, the case of the assessee that the property was purchased at the rate of Rs. 8,000 per cent has been accepted. Thus, the Tribunal allowed the appeals. The sale deed will show that the price was for Rs. 8,000 per cent when the agreement dated 1-3-1983 shows that the parties agreed to purchase the property at Rs. 12,951 per cent. A receipt is also relied on in the form of a later dated 2-4-1983 to show that the property was agreed to be purchased at Rs. 12,951 per cent. When the document shows a fixed price, there will be a presumption that is the correct price agreed upon by the parties. It is true that on the basis of the agreement the sale deed was executed. But it is not necessary that the price stated in the agreement will be the price stated in the sale deed. Sometimes, it may be higher and sometimes it may be lower. Sometimes intentionally a lesser value may be shown in the sale deed. Even if it is assumed to be so, unless it is proved that the agreement was acted upon and unless the amount stated in the agreement was paid for the sale, we cannot come to the conclusion that the price mentioned in the sale deed is not correct. In this case, further it is found that in the assessment of Pasha, it was finally found that the amount was received only at Rs. 8,000 per cent. It is taking into all these matters into consideration that the Tribunal held that the property was sold at the rate of Rs. 8,000 per cent. Thus, the Tribunal, on the basis of the facts and circumstances of the case and on the appreciation of evidence, came to the conclusion that Rs. 12,951 was not the amount for which the property was sold. According to us, there is no rule that the amount shown in the receipt was the actual amount paid. So far as the other questions are concerned, we do not find that any substantial questions of law arise because as already stated, the only question in this case is whether the amount stated in the sale deed is correct or not. According to us, the amount stated in the sale deed is the correct amount unless there are circumstances to ignore the same.
In the above view of the matter, we answer the questions in favour of the assessee and against the revenue.