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Issues:
1. Whether the transaction between the assessee and Manik Chand constitutes a mortgage by conditional sale or a sale with a condition to repurchase. Detailed Analysis: The case involved appeals by the assessee against the order of the AAC regarding the nature of a transaction between the assessee and Manik Chand. The transaction in question was a sale deed dated 11-10-1971, where Manik Chand sold a property to the assessee for Rs. 10,000, with Manik Chand retaining possession and having the right to repurchase the property by a certain date. The tax authorities considered it a sale with a condition to repurchase, while the assessee claimed it was a mortgage by conditional sale. The key issue was whether the transaction fell under section 58(c) of the Transfer of Property Act, 1982. The assessee argued that the transaction was a mortgage by conditional sale to secure a debt of Rs. 10,000 owed by Manik Chand. The deed indicated the existence of debt, Manik Chand's possession of the property, and the low sale price compared to the original purchase price. The departmental representative, however, supported the tax authorities' view that it was a sale with a condition to repurchase. The Tribunal had to determine the true nature of the transaction based on the evidence presented. After considering the arguments and examining the document, the Tribunal concluded that the transaction was indeed a mortgage by conditional sale. The document showed that Manik Chand, in need of funds, sold the property to the assessee for Rs. 10,000 with a condition for repurchase. Manik Chand continued in possession, paid rent as interest, and had partially repaid the debt. The Tribunal found intrinsic evidence supporting the mortgage nature of the transaction. Therefore, the Tribunal directed the inclusion of the Rs. 10,000 mortgage debt in the assessee's net wealth for the relevant assessment years, rather than the property value. The Tribunal's decision clarified the legal distinction between a mortgage by conditional sale and a sale with a condition to repurchase, emphasizing the importance of analyzing the transaction's terms and circumstances to determine its true nature. The judgment highlighted the significance of documentary evidence, debt existence, possession, and price considerations in establishing the nature of such transactions under the Transfer of Property Act.
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