RAJENDRA MINING SYNDICATE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE following two questions have been referred by the Tribunal, Hyderabad Bench, for the opinion of this Court under S. 66(1) of the Indian IT Act, namely:

(2.) THESE questions arise under the following circumstances. The assessee, M/s Rajendra Mining Syndicate, Guntur, is a registered firm having three mining leases and one prospecting licence for varying terms for certain plots in the Kondapalli Reserve Forest area. On 29th Jan., 1946, the assessee entered into an agreement to transfer to one B.D.V. Ramaswami Naidu, the mining rights, concessions, licences and leases in those mines possessed by the assessee together with stocks, equipments, etc., the consideration for the transfer being Rs. 3,00,000. On 4th Feb., 1946, a sum of Rs.75,000 was paid by the vendee to the vendor by way of advance. The title of the vendor to the properties in question was approved of by the vendee on 20th Feb., 1946. On 9th March, 1946, the assessee put in an application to the District Collector for permission to sell the lease and the prospecting licence and the Government of Madras sanctioned the transfer of the three mining leases but refused sanction for the prospecting licence on 20th March, 1947. The sale deed was actually executed and registered on 5th May, 1947, and the balance of the sale proceeds was paid in the presence of the Sub Registrar at the time of registration of the sale deed.

(3.) THE assessment of the ITO was affirmed on appeal by the AAC and on further appeal by the Tribunal.