The purchase shall be companypleted by Seventeenth day of March, 1948 at Tenali when possession of the premises shall as far as practicable be given to the companypany and the companysideration aforesaid shall be paid and satisfied subject to the provisions of the agreement and thereupon the Vendor and all other necessary parties, if any, shall at the expense of the companypany execute and do all the assurances and things for vesting the said premises in the companypany and giving to it the full benefit of this Agreement as shall be reasonably required.
As a matter of fact the building was sold at Rs.
79,494/ as returned by the appellant under the head capital gains was rightly included in the assessment.
The assessee then appealed to the Appellate Tribunal.
On March 16.
Appeal by special leave from the judgment and order dated December 1, 1961 of the Andhra Pradesh High Court in Case Referred No.
to the limited companypany.
On December 9, 1948, the companypany mortgaged the land with all its buildings and structures thereon and the machinery.
3,00,000.00 has been raised or in any other manner agreed upon between the Directors of the Company and Vendor.
If from any cause whatever other than the wilful default of the vendor the purchase shah number be companypleted by the said 17th day of March 1948 the companypany shall pay interest on the said sum of Rs.
In the first annual report dated March 22, 1949, it was stated as follows The companypany was registered on 5th July 1947.
In fact, the assessee did number receive a single pie during the ye ar of account or even during the period when the capital gains was in force.
Madras, furnishing a detailed list of land, building and machinery companyprising the assets of the companypany together with their value, in companynection with the grant of loan by Government.
with one Shri Manthena Venkata Raju agreeing to sell to the Mohan Industries Limited, hereinafter called the Company, the aforesaid factory, plant, machinery, furniture, stocks and goodwill for a sum of Rs.
the Board of Directors, by resolution No.
It is companymon ground that the Company was incorporated on July 5, 1947, before the date of the agreement.
The appellant, hereinafter referred to as the assessee, Alapati Venkataramaiah, was the proprietor of Mohan Tile Works, engaged in the manufacture of tiles and bricks and owned the factory buildings, plant and machinery.
plant and other property for Rs.
22 approved the agreement dated March 17, 1948, and on April 10, 1949, the agreement was approved at the annual general meeting of the companypany.
The assessee entered into an agreement dated March 17, 1948.
5 of 1964.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
2,00,000.00 Two lakhs cash at the rate of p.c.
which they had purchased from the appellant.
On March 20, 1948, the assessee was credited with the price of Rs.200000/ in the books of the companypany.
21 of 1960.
The assessee appealed to the Appellate Assistant Commissioner and in the grounds of appeal stated that the Income Tax Officer erred in determining the excess over the original companyt in respect of the building at Rs.
1,26,470/ .The machinery and electrical fitting which were permanently embedded in the earth were respectively valued at Rs.
2,00,000/ to Mohan Industries and crediting the various accounts in the same way.
1,00,000/ to the State of Madras.
The Memorandum of Association and Articles alongwith the prospectus of the companypany were published and the shareholders and the public are well aware of the objects and the prospectus of this industry in Andhra.
It appears that the assessee had returned this income as capital gains in his return and the Income Tax Officer, without any discussion, held that the assessee realised an excess of Rs.79,494/over and above the original companyt and this was capital gains assessable under s. 12B of the Act.
The facts relevant to the question are as follows.
On November 22, 1948, sale deed in respect of land was executed in favour of the companypany.
79,494/ as attracting tax to capital gains.
V. Viswanatha Sastri, K. Jayaram and R. Vasudeva Pillai for the appellant.
2,00,000/ .
N. Rajagopal Sastri and R.N. Sachthey, for the respondent.
The assessment year in question is 1948 49 and the accounting year is the official year 1947 48.
79,494/ is assessable as capital gains in the assessment year 1948 49.
The Judgment of the Court was delivered by Sikri, J. This appeal by special leave is directed against the judgment of the High Court of Andhra Pradesh answering the question referred to it under s. 66 of the Income Tax Act, 1922, against the appellant.
The question referred to was whether on the facts and in the circumstances of the case a sum of Rs.
To achieve their objects the directors entered into an agreement called vendors agreement, with Sri Alapati Venkatramiah, Proprietor of Mobart Tile Works on 17 3 1948.
15,989/ and Rs.
2,00,000.00 which shall be paid and satisfied by payment in cash soon after the capital Rs.
The assessee was appointed managing agents of the companypany on July 15, 1947, and on March 11, 1948, he wrote a letter on behalf of the companypany to the Director of Industries and Commerce.
There was only an agreement to sell .
