Law:

Section:

Section 143 of the Income-tax Act, 1961 - Assessment - Additions to income - Assessment years 1983-84 to 1985-86 - Whether unless it is proved that agreement of sale was acted upon and amount stated in agreement was actually paid, it cannot be concluded that price mentioned in sale deed is not correct - Held, yes - Whether it is not necessary that price stated in agreement will be the price shown in the sale deed - Held, yes - Whether where assessment of purchaser was completed assuming sale consideration at amount stated in sale deed, no addition could be made in hands of seller merely on basis of amount stated in sale agreement and receipt given to purchaser - Held, yes FACTS The assessee had purchased certain land which was sold to different persons and in different assessment years. A search under section 132 was conducted at the residential and business premises of the assessee. From certain receipts and documents, the Assessing Officer concluded that the land was sold at the rate of Rs. 12,951 per cent and not at the rate of Rs. 8,001 as declared in the sale deed. The Assessing Officer computed the capital gains on the above basis. On appeal, the Commissioner (Appeals) confirmed the above finding. On further appeal, the Tribunal held that the property was sold only at the rate of Rs. 8,000 per cent and, therefore, it set aside the orders of the lower authorities. On appeal : HELD After considering the evidence and on the basis of the assessment order passed against the assessee, the case of the assessee that the property was purchased at the rate of Rs. 8,000 per cent, had been accepted. Thus, the Tribunal allowed the appeal. The sale deed showed that the price was Rs. 8,000 per cent while the agreement showed that the parties agreed to purchase the property at Rs. 12,951 per cent. A receipt was also relied on in the form of a letter to show that the property was agreed to be purchased at Rs. 12,951 per cent. When a document shows a fixed price, there would be a presumption that it is the correct price agreed upon by the parties. It is true that on the basis of the agreement, the sale deed is executed. But it is not necessary that the price stated in the…

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