Judgement

Appeal (No. 18 of 1931) from a decree of the High Court (August 7, 1928) upon questions referred to the Court under s. 66, sub-s. 2, of the Indian Income-tax Act, 1922.

The case related to the assessment of the appellants under the above Act for the year 1926-27 in respect of profits or gains arising in 1925-26 from a money-lending business which they carried on. In 1904 the appellants had accepted a mortgage bond in discharge of the principal and interest due under the earlier bond. On December 22, 1917, they obtained a mortgage decree under the mortgage of 1904, and at Court sales on November 19, 1924, and January 31, 1925, they purchased the mortgaged property, the sales being confirmed on December 18 and 21, 1925. The purchase price largely exceeded the principal sums advanced.

Law Rep. 60 Ind. App. 133 ( 1932- 1933) Raja Raghunandan v. Commissioner of Income-Tax, Bihar 29

Shortly stated the questions referred were whether the transaction of 1904 was a payment of the interest due under the earlier bond so as to render the present assessment in respect of it out of time under s. 34 of the Act, and as to the proper computation of the profits or gains arising upon the sa