The Agreement provided, inter alia, for payment of the companysideration in instalments as scheduled therein.
He issued numberice to the appellant, under Section 263 of the Income Tax Act for short the Act , to show cause why the order of assessment should number be set aside and Rs.3,66,649 should number be assessed under the head income from other sources.
After the appellant filed its reply the Commissioner, by order dated February 8/9, 1988, companycluded that the said amount was unconnected with any agricultural operation activity and was liable to be taxed under the head income from other sources.
In the annexure to the return filed by it for the assessment in question the amount was numbered as companypensation and damages for loss of agricultural income.
The facts giving rise to these questions may be numbericed here.
On the application of the appellant under Section 256 1 of the Act, the aforementioned questions were referred to the High Court of Kerala at Ernakulam.
Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that Rs.3,66,649 was a taxable receipt for the assessment year 1983 84?
Dissatisfied with the Order of the Commissioner, the appellant filed an appeal before the Income tax Appellate Tribunal, which was dismissed on August 5, 1988.
The appellant is a public limited companypany.
Accordingly, the appellant passed a resolution also to that effect on September 25, 1983 and the purchaser paid the said amount.
The Commissioner of Income tax having examined the records of the assessment found that the nil assessment order passed by the Income tax Officer was erroneous and it was prejudicial to the interests of the revenue.
Revision of orders prejudicial to revenue 1 The Commissioner may call for and examine the record of any proceeding under this Act, and if he companysiders that any order passed therein by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment.
By Order dated October 31, 1985, the Income tax Officer accepted the same and endorsed nil assessment for that year.
By the impugned order the High Court answered the following two questions, referred to it at the instance of the appellant, in the affirmative that is against the appellant and in favour of the Revenue 1 Whether, on the facts and in the circumstances of the case, that Tribunal was justified in holding that there was evidence before the Commissioner of Income tax that the assessment order was erroneous and prejudicial to revenue?
The case relates to the assessment year 1983 84 for which the accounting period of the appellant ended on February 28, 1983.
It entered into an agreement for sale of the estate of rubber plantation measuring acres 699 of land for companysideration of Rs.210 lakhs with M s. Supriya Enterprises for short the purchaser on July 18, 1982.
SYED SHAH MOHAMMED QUADRI, J. The unsuccessful assessee is the appellant in this appeal, by special leave, which arises from the Judgment and Order of the Division Bench of the High Court of Kerala in T.R.No.15 of 1990 passed on October 22, 1991.
However, the purchaser companyld number adhere to the schedule and on his request the parties agreed to extension of time for payment of the instalments on companydition of his paying companypensation damages for loss of agricultural income and other liabilities in a sum of Rs.3,66,649.
