1967 (7) TMI 24

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... einafter referred to as "the Act"), has been made at the instance of the Commissioner of Income-tax, U.P., Lucknow, by the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad (hereinafter referred to as "the Tribunal"). The question referred to this court for its opinion reads: "Whether, on the facts and in the circumstances of the case, the Tribunal acted rightly in holding that the sum o .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ssee from Messrs. M.K.M.O. Sugar Mills (Private) Ltd. The assessee filed a suit for the recovery of this amount. This suit was compromised by the parties and a compromise decree was passed which contained the following recital : "This whole amount has been satisfied by the simple mortgage in favour of plaintiff's sons dated February 8, 1956." The Income-tax Officer taxed the assessee on Rs. 64,0 .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... of debtor and creditor between the assessee and Messrs. M.K.M.O. Sugar Mills (Private) Ltd., the debt inclusive of the interest was satisfied and there was thus a constructive payment of the interest. Mr. Raja Ram Agrawal's contention on the other hand is that the debt was not actually wiped out and it continued to exist though in the name of the sons. He contended that it was clearly a case of .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... rta of the assessee. The result of this transaction was that a new debt came into existence payable by Messrs. M.K.M.O. Sugar Mills (Private) Ltd. to the sons of the karta of the assessee. We would like to point out that the assessee in the present case is not the karta of the Hindu undivided family but the Hindu undivided family itself. Consequently, if another mortgage deed had been executed in .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... (Private) Ltd. came to an end and the debt of the assessee stood fully satisfied, it must be held that there was constructive payment of Rs. 64,020. We, therefore, find no substance in the contention of the learned counsel. For the reasons mentioned above we would answer the question referred to us in the negative in favour of the department and against the assessee. We assess a sum of Rs. 200 b .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X