TMI Blog1985 (2) TMI 75X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income-tax Act, 1961 (' the Act '). 2. We may at the outset observe that it is a settled fact that the assessee is a charitable trust entitled to the benefit of section 11 in view of the decision of the Tribunal in the case of the assessee itself for the assessment years 1971-72 to 1974-75 [IT Appeal Nos. 1666 to 1668 (Bom.) of 1979]. The trust had been created by a deed dated 2-7-1965. It had in its corpus a landed property at Borivli. The appellant had entered into an agreement with Elel Hotels Investments (P.) Ltd. (' purchaser ' for brevity sake) on 17-8-1971 agreeing to sell the property for a consideration of Rs. 24 lakhs which was payable in instalments. The sale transaction did not go forward as the parties had contemplate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... equirement of section 11(1) and before us also the circular of the Central Board of Direct Taxes in No. 100, dated 24-1-1973, was relied upon. The learned departmental representative relied upon the orders of the authorities below. 4. The assessee had received various sums of money from the purchaser from 1971-72 to 1978-79 and the Commissioner (Appeals) has given details of the same in para 3 of his order and we do not wish to reproduce the same for that is not very material. These amounts were advances paid pursuant to the agreement for sale and those sums had to be adjusted towards the sale price when the conveyance took place. The balance sheet as at 31-3-1972 shows that there was a massive deficit of over Rs. 23,000. In the subseque ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ins ' arises for consideration in the year of transfer, it should serve the purpose of law in section 11(1). 6. Since the actual conveyance was in 1979-80, the question of considering the income to ' capital gains ' arose only in that assessment year. Although the application is anterior to the event leading to capital gains, it can be seen that in 1979-80, when the transfer took place, the earlier receipts were adjusted towards the sale consideration. 7. The circular of the Central Board of Direct Taxes in No. 100, dated 24-1-1973, which is certainly binding on the department, is clear to say that ' repayment ' of the loan originally taken to fulfil one of the objects of the trust will amount to the application of the income for ' ch ..... X X X X Extracts X X X X X X X X Extracts X X X X
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