TMI Blog1998 (4) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... re referred : "1. Whether, on the facts and in the circumstances of the case and in law, the Appellate Tribunal was correct in holding that the amount realised by the sale of the assessee's interest in the property was only Rs. 4,33,960, i.e., Rs. 5,62,980 minus Rs. 1,29,020? 2. Whether, on the facts and in the circumstances of the case and in law, the Appellate Tribunal was correct in holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... computed only with reference to the price realised towards his interest with property?" The assessee is an individual. The assessment year is 1982-83. The assessee carried on abkari business during the financial years 1970-71 and 1971-72. He mortgaged his immovable property to the State Excise Department as security for the amounts of kist due to the Government. The property so mortgaged was a h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 1,29,020 due to the State Excise Department is also to be deducted from Rs. 5,57,980 before computing the capital gains besides allowing deductions. Thus the net income from the capital gains is Rs. 85,130. The Income-tax Officer and the appellate authority has not agreed with the assessee and so the assessee went before the Tribunal. The Tribunal agreed with the assessee relying on a jud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is that the property was mortgaged to the Government and thereby an interest in property is created in favour of the Government. When the property was sold by public auction the value of the property can be reduced to the extent of interest that was created in favour of the Government by mortgage. Therefore, what the assessee got is the price minus the value of the interest of the Government in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he wife of the assessee. It is not necessary to refer to the judgment of Bilquis Jahan Begum [1984] 150 ITR 508 (AP), as the Tribunal has relied on the said judgment. It follows from the above that the questions referred by the Tribunal are to be answered in the affirmative and against the Revenue, except question No. 3 which does not arise for consideration. The reference is answered accord ..... X X X X Extracts X X X X X X X X Extracts X X X X
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