9911796707
TMI Blog1978 (4) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... he receipt of Rs. 20,000 represented the assessee's long-term capital gain liable to tax ? " The following facts are disclosed in the statement of the case submitted by the Tribunal. The assessee was declared as the purchaser of a certain immovable property for Rs. 125 at a court auction held in 1962. The judgment-debtors filed an application under rule 90 of Order 21 of the Code of Civil Procedure, to get the sale set aside. That application was dismissed by the executing court. Against the order of the executing court, the judgment-debtors filed an appeal under Order 43, rule 1(j), of the Code of Civil Procedure, in R. A. No. 47/1967 on the file of the 1st Additional Civil Judge, Civil Station, Bangalore. During the pendency of that appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... she had in the property in question, which became crystallised by the confirmation of sale by the executing court, the receipt in question should be treated as consideration for relinquishment of her interest in a capital asset. In order to appreciate the merits of the rival contentions, it is necessary to set out briefly some of the provisions of the Code of Civil Procedure which have a bearing on the question ; rule 84 of Order 21 of the Civil Procedure Code provides that on every sale of immovable property the person declared to be the purchaser shall pay immediately after such declaration a deposit of twenty-five per cent. of the amount of his purchase money to the officer or other person conducting the sale, and in default of such dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n purchaser would acquire a right to the property with effect from the date of sale, subject to any order to be made in an appeal which the law provides. If an appeal is filed the appellate court is entitled to go into the validity of the sale and to pass appropriate orders. In that appeal, it is open to the appellate court to set aside the order passed by the executing court and to set aside the sale. If the sale is set aside on appeal which is a mere continuation of the application under rule 90 of Order 21, Civil Procedure Code, the fact that it had been confirmed by the executing court earlier would not make any material difference at all. The attempt of the auction purchaser to purchase the property at the auction sale would become abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red into in one form known to law the amount received under that transaction may attract liability under the Act and if it is entered into in another form which is equally lawful it may not attract such liability. But when the assessee has adopted the latter one it would not be open to the court to hold him liable for tax on the ground that in substance the transaction is one which resulted in gain subject to tax. In matters of this kind the court cannot ignore the form altogether as also the legal effect of the proceedings in court. The department cannot be permitted to treat the transaction in question as a transfer of capital asset by the assessee even though she had not acquired any interest in the property and had not done any act whic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the other a minor. However, no entries in the books were passed. On July 12, 1951, an oral partition was effected between the several members of the Hindu undivided family, and consistent with this partition, entries in the books were made. A joint declaration was made by the assessee, his wife and the major son on June 26, 1951, before the District Court. Later, a joint statement was made on December 5, 1951, before the Revenue Court. Properties were transferred thereafter in accordance with this arrangement to the names of the several members of the family. " It was argued before the Supreme Court on behalf of the revenue that the transactions were really acts of transfer of properties to the wife and minor son of the assessee and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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