TMI Blog1979 (9) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... The assessee had executed on 14th June, 1962, a registered sale deed in favour of a co-operative society known as the Mandi Dabwali Haryana Handmade Paper and General Works Production-cum-Sale Co-operative Industrial Society Ltd. purporting to sell for Rs. 1,31,400, the assessee's gram-dal and cotton ginning factory at Dabwali. During the assessment proceedings, the assessee pleaded that the said sale was a sham transaction and there was no capital gain accruing to the assessee. The ITO disbelieved the assessee's version. The appeal by the assessee before the AAC failed. In second appeal, the Tribunal considered the registered sale deed as a sacrosanct document bearing the seal of the Government and rejected the plea of the assessee hol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y this court to refer the following question of law in I.T. Reference No. 98 of 1974 for its opinion under s. 271(1)(a) of the Act : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the penalty under section 271(1)(a) of the Income-tax Act, 1961, was exigible ? " As regards the proceedings under s. 271(1)(c) of the Act, on the direction of this court, the following question of law has been referred to this court for its opinion in I.T. Ref. No. 100 of 1974 : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the penalty under section 271(1)(c) read with section 274(2) was exigible in the instant case ? " After hearing the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said document cannot be a final word in the matter. It has to be remembered that capital gains accrue only if there is a sale or any other transfer of the capital asset and if the assessee is able to prove that in fact no sale took place in that case no capital gain accrued which could be assessed to income-tax. If the assessee, even in the face of the registered sale deed, is able to prove by cogent evidence and satisfy the Tribunal that no sale in fact took place, in that case, the Tribunal has to come to the conclusion that there was no capital gain. As is apparent from the observations made in the order of the Tribunal, the Tribunal was under the misapprehension that the registered sale deed was final and, therefore, refused to loo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... favour of the assessee and against the revenue. As regards question No. 2 in I.T. Reference No. 99 of 1974, in view of our finding on question No. 1, the said question need not be answered as in view of the findings of fact regarding the question whether the sale in question was a sham transaction or not, and if it was not a sham transaction as to how much were the actual sale proceeds, the amount of capital gains tax shall have to be determined accordingly. In view of our findings on question No. 1 in I.T. Ref. No. 99 of 1974, the questions of law referred to this court in the I.T. References Nos. 98 and 100 of 1974 need not be answered as the penalty proceedings shall follow the decision in the main case on question No. 1 in I.T. Refer ..... X X X X Extracts X X X X X X X X Extracts X X X X
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