COMMISSIONER OF INCOME TAX Vs. CHANDULAL KAMDAR

JUDGEMENT

(1.) THE Tribunal held that the mortgage by conditional sale is a mortgage and is not a sale which is liable to be cancelled at the option of the mortgagor at a subsequent date. A mortgage once created remains a mortgage unless it is foreclosed or redeemed. THEre was no foreclosure of the mortgage during the assessment year. THE foreclosure was an event which occurred in the subsequent year. THE Assessing Officer therefore could not have treated the sale as having been taken place in the assessment year 1976-77. THE assessee had executed a deed describing it as mortgage by conditional sale on January 24, 1976, giving thereunder a right to the mortgagee to foreclose the mortgage in the event of the mortgagor failing to repay the amount secured thereunder within four months. THE assessee failed to repay the amount within that period which expired in the subsequent assessment year.

(2.) SECTION 58 of the Transfer of Property Act which occurs in Chapter IV deals with mortgages of immovable property and charges. Mortgage by conditional sale is one of the modes by which mortgage can be created. The other types of mortgages being simple mortgage ; usufructuary mortgage ; English mortgage ; mortgage by deposit of title deeds and anomalous mortgage. Clause (c) of SECTION 58 deals with mortgage by conditional sale. It reads thus :