277047/ of which the actual expenses paid out in cash was rs.
the sales made by the respondent companypany were in all material respects similar to the sales made by the firm.
373375/against which the unpaid balance was debited in the debtors account and shown under the heading book debts companysidered good secured against mortgage of land.
64340/ for expenses incurred by the respondent company on account of land already sold by the vendor.
11583/ .
48238/ was expended for lands sold by the respondent companypany and a sum of rs.
appeal from the judgment and order dated december 4 1962 of the calcutta high companyrt in income tax reference number 57 of 1958.
k. sen and b. p. maheshwari for the respondents in both the appeals .
according to this system the value of the land sold was credited at rs.
a specimen companyy of the sale deeds executed by the firm of the respondent companypany is annexure a to the statement of the case.
and the said vendor shall at all companyts companyplete the construction of the said twenty five feet wide road on the numberth of the said plot number 35a and will also lay out the said surface drains by the side of the said road within a year from the date hereof and will maintain the said road and drains in proper state or repairs and shall arrange for lighting the said roads with electric light till the same are taken over by tollygunge municipality memo of companysideration by amount paid as earnest money on 5th august 1948 rs.501.0.0 by cheque part number 6985706 on the bank of india limited on 30th january 1949.
k. mitra s. k. aiyar s. p. nayyar for r. n. sachthey for the appellants in both the appeals .
on appeal the assessment was set aside and the case was remitted to the income tax officer for a fresh assessment.
the first period is the accounting year ending june 30 1949 companyresponding to the assessment year 1950 51 and the second period is the accounting year ending june 30 1950 companyresponding to assessment year 1951 52.
out of the actual expenses paid out in cash amounting to rs.
the respondent companypany thereafter took the matter in appeal before the appellate tribunal.
with regard to the next assessment year 1951 52 the respondent company kept its accounts on the cash system and number on mercantile system.
number this indenture witnesseth and declares as follows 1 in consideration of the said premises the said mortgagor doth hereby companyenant with the said mortgagee that the said mortgagor will pay to the said mortgagee the said sum of rs.
and whereas at the treaty for sale it was agreed by and between the parties hereto that one third or thereabout of the total price will be paid at the time of execution of these presents and the payment of the balance will be secured in the manner hereinafter appearing.
169 and 170 of 1966.
against the orders of the income tax officer the respondent companypany preferred appeals to the appellate assistant companymissioner who dismissed the appeals by a companysolidated order dated numberember 7 1956.
the judgment of the companyrt was delivered by ramaswami j. these appeals are brought by certificate from the judgment of the calcutta high companyrt dated december 4 1962 in income tax reference number 57 of 1958.
as already stated the accounts were kept in the account books of the respondent companypany on a mercantile system for this period.
and whereas the total amount of price payable in respect of the said plot at the rate aforesaid amounts to rs.
the income tax officer however held that for this assessment year also the amount of unrealised purchase price for the plots sold should be treated as income.
and by the said indenture of companyveyance it was provided that the payment of the balance of the companysideration money namely the sum of rs.
in respect of those plots there was an undertaking to lay out roads etc.
civil appellate jurisdiction civil appeals number.
1268268/ as also goodwill and certain other assets subject to certain liabilities incurred by the firm.
with regard to the sale price of the plots the income tax officer held that the entire amount of consideration was to be treated as income though only a portion of the companysideration was realised in cash and the other portion was left outstanding after taking a mortgage on the plots sold from the purchaser as security.
144470/ .
for the assessment year 1950 51 the respondent companypany was maintaining its accounts in the mercantile system.
64340/ which was the expenditure in respect of the lands which had already been sold by the firm before the respondent companys purchase.
the respondent companypany took over the debts as well as the liabilities.
5800/owing by the said mortgagor to the said mortgagee should be secured by an indenture of security deed of even date being these presents to be executed by the said mortgagor in favour of the said mortgagee immediately after the execution of conveyance number in recital.
3000/ per companyta free from all encumbrances.
in this fresh assessment the income tax officer adopted the mercantile basis on which the books of the respondent company had actually been kept.
later on the respondent companypany adjusted its accounts on a cash system and submitted a revised return showing a loss of rs.
after the purchase the respondent companypany itself sold certain other plots.
112577/ a sum of rs.
8708 5 6.
against this sale there was an item of expenses aggregating to rs.
5800/ within ten years to be companyputed from the date of these presents together with interest thereon at the rate of 8 per annum calculated from the date of these presents upto the date of payment payable monthly.
5800/ being secured under a security deed of even date with these presents and executed by the purchaser in favour of the vendor creating first charge upon the said land .
the relevant provisions of the said mortgage deed are to the following effect .
2908 5 6 of lawful money of india to the said vendor in hand well and truly paid by the purchaser at or before the execution of these presents the receipt whereof the said vendor doth hereby as well as by receipt hereunder written admit and acknumberledge and the payment of the balance namely the sum of rs.
by the time the respondent companypany took over the land the firm had sold a number of plots in respect of which part of the companysideration money had been realised and for the balance mortgage bonds had been executed by the purchaser.
the income tax officer in assessing the income for the assessment year 1950 51 originally accepted the cash basis and companyputed the income.
the purchaser paid a percentage of the price in cash and undertook to pay the balance with interest at a specified rate in annual instalments which was secured by creating a charge on the land purchased.
the relevant provisions of the sale deed are as follows and whereas the said vendor hath agreed with the purchaser to sell him the said land hereunder written at the rate of price or sum of rs.
thereafter the income tax officer allowed the sum of rs.
the respondent companypany purchased the assets and liabilities of the firm mugneeram bangur company land department hereinafter referred to as the firm on july 7 1948 for a consideration of rs.
number this indenture witnesseth that in pursuance of the said agreement and in companysideration of the sum of rs 8708 5 6 whereof the sum of rs.
the companysideration was paid by the issue of shares to the vendor or its numberinees in the share capital of the respondent companypany.
3499300/ .
112577/ and the estimated expenses against future development was rs.
the assets included land at companyt rs.
