C.V. Karthikeyan, J.

(Prayer: The Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 (for brevity 'the Act') against the order of the Income Tax Appellate Tribunal, 'B' Bench, Chennai, in I.T.A.No.659/Mds/2002 for the A.Y.1995-96, dated 16.12.2005.)

1. The assessee has filed the present appeal under Section 260A of the Act, challenging the order of the Income Tax Appellate Tribunal, Chennai, in I.T.A.No.659/Mds/2002 dated 16.12.2005, with respect to Assessment Year 1995-1996 dismissing the appeal of the assessee.

2. This appeal had been admitted on 23.06.2008, on the following two substantial questions of law:

“1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in not appreciating that no part of the consideration for sale was received by the appellant and same was directly paid to the Bank by the purchaser in discharge of the mortgage amount and therefore no capital gains arises in the hands of the appellant?

2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in not holding that there was a diversion of the sale proceeds towards redeeming the interest of