G MITRA Vs. INCOME TAX OFFICER
INCOME TAX APPELLATE TRIBUNAL
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T.V.Rajagopala Rao, -
(1.) THIS is an assessee's appeal for assessment year 1982-83 filed against the order of the Commissioner of Income-tax (Appeals)-II, Hyderabad dated 26-12-1989.
(2.) The addition of Rs. 45,000 in the hands of the assessee as net income from brokerage is the sole point of contest in this appeal. The facts leading to the present appeal may briefly be stated as follows.
The assessee derived income from profession as a Practitioner in Homeo medicines and Acupuncture Therapy. He also did real estate business in purchase and sale of land. He did not maintain any regular books of account for his profession. With regard to commission or brokerage, in real estate business, the assessee was examined by the Income-tax Officer both on 12-2-1985 and 16-2-1985 whereas one B. Janardhan was examined on 6-2-1985. The examination of the assessee as well as Shri B. Janardhan established the following facts.
(3.) THE assessee was a party to a tripartite agreement between his friend Shri S. Metturam Reddy, Shri B. Janardhan representing M/s. Radha Soami Co-operative Housing Society Limited, Mossarambagh, Hyderabad and the assessee. In the accounting year in question which ended by 31-3-1982, Shri Metturam Reddy along with his three sons was the owner of 14 acres 8 guntas of land situated in Survey No. 155 of Thokatta Village, Secunderabad Taluq, Hyderabad District which is within the Cantonment limits. THE said land fell to the share of Shri S. Mettu Ram Reddy by means of a family settlement deed dated 11th December 1939 which was subsequently upheld by the High Court in its judgment passed in C.S. No. 19 of 1958 and O.S.A. No. 3 of 1960. In another suit O.S. No. 76 of 1972 on the file of the Addl. Chief Judge, City Civil Court, Hyderabad the total extent of 14 acres 8 guntas was allotted to the four vendors as follows :
THEy have executed an agreement of sale with regard to portions of the said land to several persons. One of the persons in whose favour they have executed an agreement was M/s. Railway Employees Co-operative House Building Society Limited. When they have failed to perform their part of the contract, the Railway Employees Co-operative House Building Society Limited filed suit for specific performance in O.S. No. 1232 of 1981 on the file of Fifth Additional Judge, City Civil Court, Hyderabad. THE four vendors mentioned above were defendants 1 to 4 in that suit. THE fifth defendent was M/s. Jyothi Enterprises. THE sixth defendant was one Murthy Co-operative Housing Society Limited and the seventh defendant was one M/s. Radhasoami Co-operative Housing Society Limited. After some contest, the suit was compromised between the parties and a compromise decree dated 24-4-1982 was passed. Copy of the compromise decree was furnished to me at pages 17 to 24 of the paper book filed on behalf of the assessee. Under the terms of the compromise defendants 1 to 4 have to sell 5 acres 28 guntas and 56 sq. yds. equivalent to 27,644 sq.yds. at a revised or enhanced rate of Rs. 1,01,640 per acre. THE compromise petition dated 24-2-1982 filed in O.S. No. 1232 of 1981 on the file of the Fifth Addl. Judge, City Civil Court, Hyderabad was furnished at pages 17 to 24 of the paper compilation filed on behalf of the assessee. Clause 1 of the compromise decree, inter alia, provides that the plaintiff society is entitled to purchase to the extent of 7 1/2 acres out of the suit land at the revised rate of Rs. 81,000 per acre and defendants 1 to 4 were directed to execute the sale deed in favour of the plaintiff society and defendant No. 7 on receipt of the entire sale consideration within 6 months from the date of receipt of permission from the competent authority at the society's expenses. In case the defendants 1 to 4 fail to execute the sale deed, the plaintiff society is at liberty to get the sale deed registered through Court. Clause 1 of the compromise decree, inter alia, also provides that excluding 7 1/2 acres from the total extent of the suit land, the remaining land should be kept by defendants 1 to 4 and defendant No. 7. Defendants 1 to 4 shall retain 1,000 sq. metres each i.e., 4,000 sq.metres in total according to their choice of site constituting one compact block and the remaining land shall be sold to the defendant No. 7 society. Defendant No. 7 in the suit is M/s. Radhasoami Co-operative Housing Society Limited. Defendants 1 to 4 are Shri B. Metturam Reddy and his three sons.;
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