# ALAPATIVENKATARAMIAU v. COMMISSIONER OF INCOME '!'AX HYDERABAD

- **Citation:** [1965] 3 S.C.R. 567
- **Court:** Supreme Court of India
- **Decided:** 1965-03-29
- **Bench:** K. Subba Rao, J. c. SHAH, S.M. Sucru
- **Source:** https://unisonlegal.in/judgment/supreme-court-of-india/alapativenkataramiau-v-commissioner-of-income-ax-hyderabad-3515
- **Pages:** 9

## Headnote

Indian Income-tax Act, 1922 (11 of 1922), s. 12B-Capital Gains--
Passing of Title-What constitutes-Date of sale or transfer -What is.
On 17th March 1948, the assessee entered into an agreement to
sell his factory to a company, and on the very same day possession
of all the assets of the factory was handed over to the company. A
few days later an entry was made in the company's account showing
that a sum of Rs. 2,00,000/- had be€n paid to the assessee and there
were corresponding entries in the assessee's accounts also. In fact
only a lakh and odd was paid to the asS<Ossee and even that amount
was paid only in Ma:·ch 1949. ;n November 1948 a sale deed was
executed and registered and in March 1949 the Board of Directors
of the Company ratified the sale. For the assessment year 1948-49, the
assessee had included in his return, the sum of Rs. 2 lakhs as capital
gains. The Income-tax Officer held that the assessee realised an excess
of Rs. 79,494/- over and above the original cost, as capital gains assessable under s. 12B of the Income-tax Act, 1922. The Appellate Assistant Commissioner, and the Tribunal confirmed the order. In reference, the High Court held that it was immaterial as to when the
money was actually paid because the transfer had already been made
to the company by possession, that for the purpose of the section the
assessee should have the right to receive the profits and not that he
should have in fact received it, that entire property was transferred
by giving possession to the company in the year of account, and that
the income had arisen to the assessee in the year of account. In appeal
to this Court, it was contended that as the sale took place only in
March 1949, when the Directors ratified the agreement of sale, no
sale or transfer took place before 1st April 1948, as required by
s. 12B, and hence the amount was not liable to tax.
HELD: Title to the assets could not pass to the company till the
conv:eyance was executed and registered and consequently no sale, in
the mstant case, took place of the assets before 1st April 1948 as required by s. 12B. [574B]
Commissioner of Income·ta.x v. Bhuranoya Coal Co. 34 I.T.R 802,
referred to.
Before s. 12B can be attracted, title must pass to the company by
any of the modes mentioned in s. 12B i.e., sale, exchange or transfer.
It is true that the word 'transfer' is used in addition to the word
'sale' but even sO, in the context, transfer must mean effective conveyance of the capital asset to the transferee. Delivery of possession
of immovable property cannot by itself be treated as equivalent to
conveyance of the immovable property. [574E]
The date of sale or transfer according to s. 12B is the date when
the sale or transfer takes place, and the entries in the account books
are irrelevant for the purpose of determining such a date. (574F-G]
In the present case. machinery. electrical fittings, buildings and
site were not sold or transferred in the relevant year of account; only
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[Ioo:i] 3 8.C.R.
one asset, namely, furniture was transferred on 17th Ma.-ch 1948 as
title to furniture can pass by delivery. Capital gains, if any, made by
the transfer of furniture accrued on that date. The position of goodwill is ho\revcr ditlcrent_ It is an intangible asset and it ordinarily
passes along \\'ith the tn1nsference of the v..•hole business and so
it was not transferred before !st April !948. f575A-E]
Ov11. APPELLATE kRISDICTION: Civil Appeal No. 5 of 1964.
Appeal by special leave from the judgment and order dated
December I. 1961 of the Andhra Pradesh High Court in Case Referred No. 21 of 1960.
A. V. Viswanatha Sa11ri, K. Jayaram and R. Va.mdeva Pillai
for the appellant.
K. N. Rajagopa/ Sastri and R. N. Sacl11hey, for the respondent.
The Judgment of the '-ourt was delivered by
Sikri, J. This appeal by special leave is directed against the
judgment of the High Court of Andhra Pradesh an,wer;ng the question referred to it under s. 66 of the Income

## Text

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ALAPATIVENKATARAMIAU
v.
COMMISSIONER OF INCOME '!'AX HYDERABAD
March 29, 1965
[K. SUBBA RAO, J. c. SHAH .AND S.M. Sucru, JJ.)
Indian Income-tax Act, 1922 (11 of 1922), s. 12B-Capital Gains--
Passing of Title-What constitutes-Date of sale or transfer -What is.
On 17th March 1948, the assessee entered into an agreement to
sell his factory to a company, and on the very same day possession
of all the assets of the factory was handed over to the company. A
few days later an entry was made in the company's account showing
that a sum of Rs. 2,00,000/- had be€n paid to the assessee and there
were corresponding entries in the assessee's accounts also. In fact
only a lakh and odd was paid to the asS<Ossee and even that amount
was paid only in Ma:·ch 1949. ;n November 1948 a sale deed was
executed and registered and in March 1949 the Board of Directors
of the Company ratified the sale. For the assessment year 1948-49, the
assessee had included in his return, the sum of Rs. 2 lakhs as capital
gains. The Income-tax Officer held that the assessee realised an excess
of Rs. 79,494/- over and above the original cost, as capital gains assessable under s. 12B of the Income-tax Act, 1922. The Appellate Assistant Commissioner, and the Tribunal confirmed the order. In reference, the High Court held that it was immaterial as to when the
money was actually paid because the transfer had already been made
to the company by possession, that for the purpose of the section the
assessee should have the right to receive the profits and not that he
should have in fact received it, that entire property was transferred
by giving possession to the company in the year of account, and that
the income had arisen to the assessee in the year of account. In appeal
to this Court, it was contended that as the sale took place only in
March 1949, when the Directors ratified the agreement of sale, no
sale or transfer took place before 1st April 1948, as required by
s. 12B, and hence the amount was not liable to tax.
HELD: Title to the assets could not pass to the company till the
conv:eyance was executed and registered and consequently no sale, in
the mstant case, took place of the assets before 1st April 1948 as required by s. 12B. [574B]
Commissioner of Income·ta.x v. Bhuranoya Coal Co. 34 I.T.R 802,
referred to.
Before s. 12B can be attracted, title must pass to the company by
any of the modes mentioned in s. 12B i.e., sale, exchange or transfer.
It is true that the word 'transfer' is used in addition to the word
'sale' but even sO, in the context, transfer must mean effective conveyance of the capital asset to the transferee. Delivery of possession
of immovable property cannot by itself be treated as equivalent to
conveyance of the immovable property. [574E]
The date of sale or transfer according to s. 12B is the date when
the sale or transfer takes place, and the entries in the account books
are irrelevant for the purpose of determining such a date. (574F-G]
In the present case. machinery. electrical fittings, buildings and
site were not sold or transferred in the relevant year of account; only
067
~l'.J•Uf::)IF, COt:H1' RF.ro1rrs
[Ioo:i] 3 8.C.R.
one asset, namely, furniture was transferred on 17th Ma.-ch 1948 as
title to furniture can pass by delivery. Capital gains, if any, made by
the transfer of furniture accrued on that date. The position of goodwill is ho\revcr ditlcrent_ It is an intangible asset and it ordinarily
passes along \\'ith the tn1nsference of the v..•hole business and so
it was not transferred before !st April !948. f575A-E]
Ov11. APPELLATE kRISDICTION: Civil Appeal No. 5 of 1964.
Appeal by special leave from the judgment and order dated
December I. 1961 of the Andhra Pradesh High Court in Case Referred No. 21 of 1960.
A. V. Viswanatha Sa11ri, K. Jayaram and R. Va.mdeva Pillai
for the appellant.
K. N. Rajagopa/ Sastri and R. N. Sacl11hey, for the respondent.
The Judgment of the '-ourt was delivered by
Sikri, J. This appeal by special leave is directed against the
judgment of the High Court of Andhra Pradesh an,wer;ng the question referred to it under s. 66 of the Income Tax Act. 1922. against
the appellant. The que>tion referred to was "whether on the facts
and in the circumstances of the case a sum of Rs. 79.494!- is assessable as capital gains in the assessment year 1948-49."
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The facts relevant to the question are as follows. The assessment year in question is 1948-49 and the accounting year is the official year l'J47-48. The appellant, here'naftcr referred to as the assessee, Alapati Vcnkataramaiah. was the proprietor of Mohan Tile .E
Works. engaged in the manufacture of tib and bricks and owned
the factory buildings, plant and machinery. The assessee entered
into an agreement dated March 17, 1948. with one Shri Manthena
Venkata Raju agreeing to sell to the Mohan Industries Limited.
hereinafter called the Company, the aforesaid factory, plant, machinery, forniture. stocks and goodwill for a sum of Rs. 2,00,000/-.
The agreement recited that the assessee bad been carrying on business under the name and style of Mohan Tile Works at Tenali and
that the company to be called the Mohan Industries Limited is to
be formd under the Imlian C<imp<rnies Act, having for its object
among other th'ngs the acqui>ition and the working of the said
busine,s. It appears that this agreement was drafted before the
Comp.i:iy was incorporated and the recital clause was not modified
when the agreement Wus actually executed. It is common ground
that the Company was incorporated on July 5. 194.7. before the
date of the agreement. Since the answer to the question turns in
part on the construction of the agreement it would be convenient
to set out the relevant clauses. which arc as follows:
"I. The vendor shall sell and the company shall purchase:
First the Goodwill of the said business (with the exclusive right to represent the company as carrying on such
busincs5 in continuation of the Vendor or in succession
thereto).
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VENKATARAMIAH l'. C, I. 'f, (Sikl'1:, J.)
Secondly all the immovable properties specified m
Schedule hereto;
Thirdly all the plant, machinery, offices
furniture.
licences. livestocks, carts, implements and utensils to
which the vendor is entitled in connection with the said
business specified in the Second Schedule hereto;
Fourthly all materials and semi-processed materials in
stock described in the third schedule.
2. The consideration for the said sale shall be the sum
of Rs. 2,00,000.00 which shall be paid and satisfied by
payment in cash soon after the capital Rs. 3,00,000.00
has. been raised or in any other manner agreed upon between the Directors of the Company and Vendor.
6. The purchase shall be completed by Seventeenth
day of March, 1948 at Tenali when possession of the premises shall as far as practicable be given to the company
and the consideration aforesaid shall be paid and satisfied
subject to the provisions of the agreement and thereupon
the Vendor and all other necessary parties, if any, shall at
the expense of the company execute and do all the assurances and things for vesting the said prem'.ses in the company and giving to it the full benefit of this Agreement as
shall be reasonably required.
7. If from any cause whatever other than the wilful
default of the vendor the purchase shall not be completed
by the said 17th day of March, 1948 the company shall
pay interest on the said sum of Rs. 2,00,000.00 (Two lakhs)
cash at the rate of ..... , ... p.c. per annum.
8. Upon the adopt'on of this agreement by the company in such manners as to render the same binding on the
company the said Manthena shall be discharged from all
liability in respect thereof.
9. Unless before the day the company shall have becorne
entitled to commence business either of the parties hereto
may by notice. in writing to the other, determine this agreement and after adopting this agreement the company shall
stand in the place of the said vendor for the purpose of
this clause.
·
I 0. If this agreement shall not be adopted by the company in the manner aforesaid before and day next, either
of the parties may by notice in writing to the other determine the same."
The assessee was appointed managing agents of ·the company
on July 15, 1947. and on March II, 1948. he wrote a letter on
behalf of the company to the Director of Industries and Commerce,
Madras, furnishing a detailed list of land, building and machinery
comprising the assets of the company together with their value, in
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SUPREllE COURT REPOllTS
(!965) 3 !.C.R.
connection with the g,rant of loan by Goverr.ment. On March 20,
1948, the assessee was credited with the price of Rs.200000 /- in
the books of the company. On November 22. 1948, sale deed in
respect of land was executed in favour of the company. On December 9, 1948, the company mortgaged the land with all its buildings
and structures thereon and the machinery. plant and other property
for Rs. 1.00.000i- to the State of Madras. On March 16, 1949. the
Board of Directors, by resolution No. 22 approved the agreement
dated March 17, 1948, and on April IO. 1949, the agreement was
approved at the annual general meeting of the company. In the first
annual report dated March 22, 1949. it was stated as follows:
"The company was registered on 5th July 1947. The
Memorandum of Association and Articles alon~with the
prospectus of the company were published and the shareholders and the public arc well aware of the objects and
the prospectus of this industry in Andhra. To achieve their
object~ the directors· entered into an
agreement called
vendor's agreement. with
Sri
Alapati
Venkatramiah,
Proprietor of Mohan Tile Works on 17-3-1948."
It appears that the assessee had returned this income as
capital gains in his return and the Income Tax Officer, without any
discussion, held that the assessee realised an excess of Rs.79,494/-
over and above the original rnst and this was capital gains assess·
able under s. 12B of the Act.
The assessee appealed to the Appellate Assistant Commissioner and in the grounds of appeal stated that "the Income Tax
Officer erred in determining the excess over the original cost in
respect of the building at Rs. 79,494/- as attracting tax to capital
gains. As a matter of fact the building was sold at Rs. J.69,950, but
a sum of one lakh alone was received and the balance is yet to be
received. The transaction therefore cannot be said to be complete
nor can it be said that the profits had been realised. Therefore. the
sum of Rs. 79,494/- as attracting capital gains is absolutely unjustified."
The Appellate Assistant Commissioner observed that the fact
that a part of the sale amount had not been realised was irrelevant.
Then he said that "at one sta~c it was contended that there was no
legal transfer of the buildings, machinery, etc. to the lim'ted c(}mpany. There is no substance in this contention also. The limited
company is said to have obtained a loan of more than a lakh of
rupees from the Madras Government on the bJsis that they were
the owners of the bu;i<lings. machinery. etc. which they had purchased from the appell~nt. The statement therefore that there was
no legal transfer cannot be true. I am satisfied that the sum of
Rs. 79,4941- a5 returned bv the appellant under the head capital
gains was rightly included in the asse.ssment."
The assessee then appealed to the Appellate Tribunal. The
Tribunal, by its order dated November 24, 1955. held that "there
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VENKATARAM!AH V. C. I. T. (Sikri, J.)
171
was in fact no sale, much less legal transfer of lands, buildings,
machinery etc., to the lim;ted liability company which was promoted to take over the tiles business. There was only an agreement to
sell. [n fact, the assessee did not receive a single pie during the year
of account or even during the period when the capital gains was
in force. l;le received in all Rs. I lakh in several instalments beginning from 25-3-1949, which is beycmd the year of account. The
point that the assessee himself returned the sum of Rs. 79,494/-
under the capital gains leads us nowhere. He might have done it
under the advice of some "income-tax expert". The assessee cannot
be tied down to an inadvisably made wrong statement. In the
circumstances, we delete the addition."
It appears that the Commissioner of Income tax filed an application under s. 35 of the Act for the correction of the Tribunal's.
order on the ground that the Tribunal had not mentioned in the
order certain documents which, if they had been considered, would
perhaps support a conclusion different from the one arrived at by
the Tribunal. The Tribunal thereupon came to the conclusion that
its earlier decision deleting the amount from taxation was based
on non-consideration of various materials on record and it proceeded to rectify this order as a mistake apparent from the record. Accordingly it deleted para 4 in its order dated November 24, 1955,
and substituted its order dated March 8, 1957. The Tribunal held
that in pursuance of cl. 6 of the agreement dated March 17, 1948,
the possession of the entire factory was immediately handed over
to Mohan Industries and that the sale deed dated November 22,
!948 was executed for consideration of Rs. 4,500/- only and refers
. only to the land on which the factory is situated, and did not refer
to the factory, machinery and plant, etc. which had been taken
possession of by Mohan Industries on March 17, 1948. Further it
held that the entries in the account books of Mohan Industries under
date March 20, 1948, showed that a sum of Rs. 2;00,000/- was
credited in favour of the assessee and the asset accounts
were
debited ·as follows:
Plant & Machinery a./c
L.P.
27
Rs.
15,989
0
0
Furniture: account
...
29
18,806
0
0
ElectriC' gooda
"
31
l,2sg
10
0
Site & Construction ae(ount
33
1,26,470
0
0
Stock account
"
34
30,050
0
0
Goodwill a.erount
40
7,396
6
0
Tot&!
Ro. 2,00,000
0
0
1172
SUP&Elll.E CQUIIT lll'ORT8
[I fl6/i] 3 s.c.a.
Further it noticed that the assessee also made corresponding entriea
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in the books on March 20, 1948, by debiting Rs. 2,00,000/· to
Mohan Industries and crediting the various accounts in the same
way. The Tribunal also relied on the letter dated March II, 1948,
from Mohan Industries to the Director of Industries. and the first
annual report dated March 22, 1949. As stated above, the Tribu·
nal referred the question set out above.
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The High Court came to the conclusion (!) that in the circwn·
stances of the case it is immaterial as to when the money was
actually paid because the transfer had already been made by putting
the company in possession; (2) that the words used in s. 128 are
sale, exchange, relinquishment or transfer. If transfer is equivalent
.to sale, in that it should only be by a registered instrument, the o
Legislature would not have used two different words for that pur·
pose. All that is required for the purpose of this sect;on is that the
assessee should have a right to receive the profits !lid not that he
should· have in fact received it. The assessce, in their view. had a
right lo receive the two lakh of rupees under the agreement
immediately and in fact he treated it as having been received; (3) the
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entire movable and immovable property was transferred by giving
possession to the company in the year of account and in order to
perfect the title the only thing that is required was a registered conveyance in respect of land wh;eh wa• done subsequently; and (4)
that it is apparent from the entire transaction and the method· of
accounting adopted both by the assessee and the company that the
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income had arisen to the assessee in the year of account and there
is no justification even for the contention that atlcast immovable
assets should be deemed to have been transferred only in the year
in which the actual sale deed was executed. Accordingly, it answered the question in the affirmative.
Mr. A.V. Vishwanatha Sastri. the learned counsel for the
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assessee contends that under s. 128 of the Income Tax Aci, as it
stood at the relevant time. profits and gains arc deemed to be the
income of the previous year in which the sale. exchange or transfer
took place. He says that the sale took place when on March
16. 1949, the Board of Directors ratified the agreement dated
March 17. 1948; till then there was only an agreement to sell and
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that an agreement to sell is neither a sale nor a transfer of a capital
asset. The relevant part of s. 128 was in the following terms:
"128. Capital gains-(!) The tax shall be payable by
an assessee.under the head "Capital gains" in respect of
any profits or gains arising from the sale, exchange or
transfer of a capital asset effected after the 31st day of
March 1946 and before the 1st day of April 1948; and
such profits and gains shall be deemed to be income of
the previous year in which the sale, exchange or transfer
took place ... "
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VENKATARAMIAH V. c. I. T. (Sikri, J.)
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The word "capital asset" was defined to mean "property of any
kind held by the assessee whether or not connected with his business, profession or vocation but does not include (i) any stock-intrade, consumable stores or raw materials held for the purpose of
his business, profession or vocation."
The question which arises is whether any sale or transfer took
place before the first day of April, 1948. Upto that date, apart from
the agreement to ~ell, three events had taken place. First, the
assessee as managing agents had written on March 11, 1948, i.e.,
before the agreement wa9 signed, to the Government regarding
loan. Secondly, on March 17, 1948"the possession of the land and
the buildings and machinery had been given to the company,
Thirdly, on March 20, 1948, the assessee had been credited with
the price of Rs. 2,00,000 I· in the books of the company and he had
also made appropriate entr'es in his own account books
Turning now to the agreement dated March 17, 1948, it is
urged that_ this is an agreement to sell artd not a sale deed. This
!s evident from clause 1 of the ag.reement. Further it is contended
that it is a condit;onal agreement to sell.· Reliance is placed on
clauses 8 and 9 of the agreement. Clause 8 expressly contemplates
adoption of the agreement by the company in such manner as to
render the same binding on the company, and clause 9 contemplates
that it is only after the adoption of the agreenient that the company
shall stand in the place of the said Mantana Venkata Raju. It seems
to us that it was a conditional agreement to sell and before it ct>uld
ripen into a contract between the company and the assessee, it had ti::
be adopted by the company. We may mention that Mr. Rajagopala
Sastri urged that we should discard clauses 8 and 91because they
were meant to operate if the agreement had been executed before
the incorporation of the company. But we are unable to rewrite the
agreement. Clauses 8 and 9 are appropriate in an agreement which
is made by an agent subject to confirmation by a principal .and must
be given effect to.
When was the agreement adopted by the company? We are
relieved from addressing ourselves to this question because in the
statement of the case, which was agreed to by the assessee and the
Revenue, it is stated that "the said agreement was approved and
accepted by a resolution of the Board of Directors of the Company
on 16.3.1949 and in and by the said resolution the company agreed
to pay purchase price in instalments commencing from 31.3.1949.
The agreement was subsequently approved by the general body of
share holders at a meeting held on 10-4-1949 and on such approval,
acceptance and adoption, the agreement became binding on the
assessee and the company."
Even if the agreement was accepted by the company in 1949,
the question still remains whether any sale or transfer of assets took"
place before April 1948. Sale or transfer of an asset could take ·
place, as it did in respect of the site, even before the agreement was
L/P(N)4SC!-IO
574
SUPREME COUllT REPORTS
[1965] 3 s.c.n.
accepted. The assets comprised of two items of immovable property,
viz., Plant and machinery valued at Rs. 15,989 / · and site and buildings valued at Rs. 1,26,470/-. It is clear that title to these assets
could not pass to the company till the conveyance was e.~ecuted and
regi;tered. (See Commissioner of Income Tax v. Bhurangva Coal
Co.(') No such conveyance was executed before April 1, 1948. It is
only on November 22, 1948, that a sale deed was executed and
registered in respect of the site. Therefore. it is clear that the title
to these assets did not pass to the company till after April 1, 1948.
and consequently nb sale took place of these assets before April 1,
1948.
Mr. Rajagopala Sastri however urges in the alternative that
even if no sale took place before April I, 1948, the assets had been
transferred to the company before that date. He says that 'transfer'
is a wide word and had been used in s. I 2B to cover those cases
where rights in assets have been transferred in such a manner as to
give rise to capital gains. He further urges that in this case possession of the assets was transferred to the company on March 17.
1948, and the assessee could never get back possession of the immovable assets in view of s. 53A of the Transfer of Property Act.
In none of the cases cited before us has this point been considered.
We are unable to sustain this contention. Before s. 12B can be attracted, title must pass to the company by any of the modes mentioned in s. l 2B, i.e. sale, exchange or transfer. It is true that the
word 'transfer' is used in addition to the word 'sale' but even so,
in the context transfer must mean effective conveyance of the capital asset to the transferee. Delivery of possession of immovable property cannot by itself be treated as equivalent to conveyance of the
immovable property.
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The High Court has relied on the entries made in the account
books of the assessee and the company on March 20. 1948, but the
date of sale or transfer according to s. l 2B is the date when the
sale or transfer takes place, and it seems to us that the entries in
the account books are irrelevant for the purpose of determining
such a date.
Mr. Rajagopala Sastri contends that the assessee should not be
allowed at this stage to draw a distinction between movable and
immovable assets, but in the statement of the case, which was agreed
to by the assessee and· the' Revenue, a di,tinction is drawn thus:
"The building and site was valued at Rs.
1,26,470/-.
The machinery and electrical titting which were permanently embedded in the earth were respectively valued at
!ls. 15,989/- and Rs. 1,298-10-0. The stocks were valued
at Rs. 30,050/- and gootlwill at Rs. 7396-6-0."
We are. therefore. unable to prevent the asscssee from relying upon
the distinction between movable and immovable assets. In the
(') 34 1.T.R. 802.
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VENKA'rARAMIAH v. c. I. T • . (Sikri, J,)
575
result, we hold that the following assets were not sold or transfer·
red before April I, 1948.
(i) Machinery valued at Rs. 15,989-0-0.
(ii) Electrical fittings valued at Rs. 1,289-10-0.
(iii) Buildings and site valued at Rs. 1,26,470-0-0.
Therefore, no capital gains in respect of these items arose in the
previous year ending March 31, 1948.
This brings us to the movable assets. Stocks valued at
Rs. 30,050 /- are expressly exempt from the definition of capital
asset, and therefore we hold that no capital gain accrued in respect
of their sale or transfer. This leaves furniture valued at Rs. 18,805/-,
and goodwill valued at Rs. 7,396 / 6 /-. There is no doubt that possession of furniture was delivered on March 17, 1948, and as title
to furniture can pass by delivery, capital gains, if any, accrued on
that date. In the circumstances of the case, delivery must have been
m:1de with the intention of passing title. The position regarding
goodwill is however different. It is an intangible asset and it ordinarily passes alongwith the transference of the whole business. It
cannot be said in the circumstances of this case that the goodwill
was transferred before April I, 1948. Accordingly, we hold that
only one asset, namely, furniture was transferred before April I,
1948. In the result, we answer the question referred to the High
Court as follows:
"In the facts and circumstances of the case the sum of
Rs. 79 ,494 /- is not assessable as capital gains in the assessment year 1948-49, but only such part of it, if any, as is
attributable to the capital gain made by the transfer of
furniture valued at Rs. 18,805 I. is assessable."
The appeal is accordingly accepted and as the assessee has
succeeded substantially he will have his costs here and in the High
Court.
Appeal allowed.