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TMI Blog1987 (3) TMI 28X X X X Extracts X X X X X X X X Extracts X X X X ..... lding that the assessee is entitled to the deduction of interest of Rs. 22,355 in respect of the assessment year 1971-72 ? (2) Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was legally justified in holding that provisions of subsection (2) of section 52 of the Act were not applicable, to the facts of the assessee's case on the sale of Rasoda building ? (3) Whether, on the facts and in the, circumstances of the case, the Appellate Tribunal was justified ID holding that the firm, M/s. Madho Associates, Kota, commenced its business from July 1971, and the assessee was entitled to the deduction of interest for the full accounting year relevant to the assessment year 1972-73 and not proportionate interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars, constructing a cinema building and had not carried on any business activity during that period, the investment inside by the assessee could not be held to be, investment for any business purpose. The Income-tax Officer held that till the commencement of the business activity, the assessee was not entitled to deduction oil account of payment of interest on loan taken by the assessee for investing in the firm. The, Income-tax Officer also held that the sale by the assessee of Rasoda building at Rajgarh to his mother for a sum of Rs. 45,000 was understated ; that the fair market of the said building was Rs. 2,00,000; that the difference between the sale price and the fair market value was more than 15% and, therefore, tinder section 52(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cerned. The Tribunal, however, upheld the finding of the Income-tax Officer and the Appellate Assistant Commissioner that capital gains arising from sale of Rasoda building could not be held to exempt from levy of tax under the Act. Aggrieved by the order passed by the Tribunal, the Department as well as the assessee sought reference.This is how the aforesaid questions of law have been referred to this court for its opinion. Now, as regards question No. (1) referred at the instance of the Department, the material facts are that in the assessment year 1971-72, the assessee claimed deduction on account of payment of interest to the bank on the loan taken by the assessee for investing in the firm, M/s. Madho Associates, of which the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the Appellate Assistant Commissioner that the consideration received by the assessee was more than that shown in the sale deed. Under the circumstances, the Tribunal, in our opinion, was right in holding that the provisions of section 52(2) of the Act were not applicable to the sale of Rasoda building. Our answer to question No. (2) referred at the instance of the Department is in the affirmative and against the Revenue. Regarding question No. (3) referred at the instance of the Department, learned counsel for the parties agreed that in view of our answer to question No. (1) referred at the instance of the Department, it would not be necessary to answer this question. We, therefore, decline to answer this question. Regarding question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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