Lal Umesh Bahadur Pal and Others vs Commissioner of Income Tax, U.P., Lucknow

K.S. Hegde, J.—The question referred to the High Court for its decision is:

Whether on the facts and in the circumstances of the case the Tribunal acted rightly in holding that the sum of Rs. 64,020/-was not assessable as income of the assessee in the assessment year 1956-57.

The Tribunal answered that question In favour of the assessee and against the Department. The High Court reversed that conclusion. It answered the question in favour of the Department. The decision of the High Court must be held to be clearly wrong. See the decision of this Court in Commissioner of Income Tax Central, Calcutta, and Another Vs. Amalgamated Development Ltd., . In that case this Court ruled "that the amount of the consideration not received by the assessee but which the purchasers agreed to pay in future and for which lands were mortgaged by them in favour of the assessee, could not be considered to be revenue receipts for the assessment periods, and the assessee was liable to be taxed only on the actual realisations in cash". This decision completely covers the facts of this case.

In the result this appeal is allowed, the answer given by the High Court is discharged and in its place we answer the question in favour of the assessee and against the Department. The department to pay the cost in this appeal to the assessee.