TMI Blog1967 (9) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... 66(2) of the Indian Income-tax Act, 1922 (hereinafter referred to as the Act), in compliance with the direction of this court in O.P. No. 296 of 1964. The year of assessment is 1960-61 and the accounting period is from 1st April, 1958, to 25th August, 1959. The question referred is : " Whether, on the facts and circumstances of the case, the Income-tax Appellate Tribunal was correct in holding that no capital gains taxable under the Indian Income-tax Act, 1922, arose to the assessee ? " The assessee was carrying on business of manufacture and sale of packing cases. Pursuant to a sub-contract which he entered into with a firm called Messrs. Moothadath and Sons, he supplied railway sleepers and timber to the firm during the period betwee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in of Rs. 60,520. After adjusting this profit against the business loss of Rs. 23,090 for the year, the net loss was determined as Rs. 7,203 under the head " Business ". This amount was deducted from the aforesaid sum of Rs. 60,520 to arrive at the capital gain taxable under section 12B of the-Act. Accordingly, the amount of capital gain was fixed at Rs. 53,317 and taxed by the Income-tax Officer by an order dated 30th March, 1961. The assessee filed an appeal from the aforesaid order and contended before the Appellate Assistant Commissioner that the transaction did not involve any sale and that it was only a surrender of the business in settlement of his debts and it did not attract section 12B of the Act. This contention was rejected an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding that the assessee had made a sale of his assets to his creditor and that there was a gain of Rs. 53,317 in the transaction. " There can be little doubt that the transfer of the business by the assessee to Messrs. Moothadath and Sons falls within the ambit of section 12B of the Act. The consideration recited in a document is not conclusive and it is open to an assessee to establish that the real consideration is less than what is shown in the document. But, in this case, there is no material on record to show that the amount mentioned in the document as consideration for the transfer is not the fair market value of the property on the date of the said transfer. On the other hand, the whole consideration of Rs. 1,70,797.61 shown in t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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