JUDGMENT
1. By this reference application under Section 256(2) of the Income-tax Act, 1961, the following question has been referred for our opinion :
“Whether, on the facts and in the circumstances of the case and on a correct interpretation of the sale agreement, the Tribunal was correct in law in maintaining the order of the Commissioner of Income-tax (Appeals) in deleting the addition of Rs. 32,00,000 and Rs. 50,000 made by the Income-tax Officer under the head ‘Business’ and ‘Other sources’, respectively ?”
2. The assessee is a limited non-resident company. The assessment order for the assessment year 1981-82 was passed by the Income-tax Officer on March 27, 1986, estimating the business income of Rs. 32,00,000 against the returned income shown at nil. The Income-tax Officer has also made addition of Rs. 50,000 on own estimate basis as income from other sources. The order was passed under Section 144 of the Income-tax Act, 1961. In appeal before the Commissioner of Income-tax (Appeals) the assessee has submitted that the assets and liabilities of the assessee-company had been taken over by the Indian company as per agreement and that agreement has been approved by the Reserve Bank of India on April 30, 1982, with effect from January 1, 1978.
3. As the approval of the Reserve Bank of India has not been given by the Reserve Bank of India, in the relevant previous year, the Income-tax Officer did not accept the transfer effective on the basis of the agreement and assessed the income from the tea garden in the hands of the assessee.
4. The Commissioner of Income-tax (Appeals) following the decision of the Tribunal in the case of Jhanzie Tea Association and in the case of Chulst Tea Co. Ltd. and also considering the fact that income from the tea garden concerned in the assessment year 1981-82 has already been assessed in the hands of transferee, i.e., the Indian company, therefore, he took the view that there is no justification to assess tbe same income in the hands of this assessee who is the transferor.
5. At the outset learned counsel for the Revenue brought to our notice the decision of this court in the case of CIT v. Jhanzie Tea Association [1989] 179 ITR 294, wherein this court has considered that if some transfer is made on the basis of the agreement by the non-resident company and subsequently that agreement has been approved by the Reserve Bank of India with retrospective effect, the transfer should be taken to have taken effect from the date of the agreement and from that date the income from such tea garden, which was transferred, cannot be assessed in the hands of the transferor.
6. We have considered the submission of learned counsel for the parties. In the case of CIT v. Jhanzie Tea Association [1989] 179 ITR 294 (Cal) even the sale deed was not executed but there was an oral agreement providing for transfer of income from the assets of the purchaser before execution of the sale deeds. This court has taken the view that though the sale deed was executed subsequently but with retrospective effect, the income cannot be assessed in the hands of the transferor from the tea estate when both the parties agreed that the income from the property shall be taken as income of the transferee and both the parties have acted upon on the basis of that oral agreement.
7. Considering the submissions and the approval of the agreement by the Reserve Bank of India, in the instant case and also the fact that the income in the year under consideration from the tea estate has already been assessed in the hands of the transferee, i.e., the Indian company, there is nothing wrong in the order of the Tribunal deleting the addition of income made by the Assessing Officer. When the concurrent finding of fact of the Commissioner of Income-tax (Appeals) as well as the Tribunal is that the transfer took place from the date of the agreement we find no perversity in their finding. We concur with the view taken by both the authorities.
8. Considering the aforesaid facts, we answer the question in the affirmative, i.e., in favour of the assessee against the Revenue.
9. The reference application is accordingly disposed of.