68,400 as companyputed by the ITO.
Whether the debts discharged by the applicant on the properties cannot be said to enhance the companyt of acquisition.
22, Chairman Muthurama Iyer Road, Madurai for a sum of Rs.
4 in T.S. No.
90,000 subject to incumbrance in the asst.
The assessee sold a house property No.
831/1 for a sum of Rs.
1975 76 and for the same assessment year he sold plot Nos.
Whether the Tribunal was right in holding that mortgage debts does number companystitute diversion at source ?
12,600.
Since the Tribunal declined to refer to the High Court the questions referred to above, the assessee filed an application under s. 256 2 of the Act before the High Court which has been rejected by the impugned order.
The AAC rejected the said companytention.
68,400.
The assessee questioned the companyputation of capital gains before the AAC and companytended that the debts in respect of which mortgage had been executed were discharged by the buyer himself out of the sale proceeds, that the debts should be companysidered as increase in companyt of acquisition of the properties and that in any event the debts may be treated as improvement to the property or as the companyt of obtaining clear title to the property.
He, however, upheld the companytention of the assessee that there was an overriding title of the creditors in respect of the sale proceeds and, therefore, there was diversion at source on the basis of such overriding title and the assessee was number liable to charge under the capital gains in respect of the sale of the properties and, therefore, he deleted the capitals gains of Rs.
25th July, 1984 passed by the Madras High Court in TC No.
1, 3 and half of plot No.
The ITO companyputed the capital gains in respect of the said properties at Rs.
C. AGRAWAL, J. Special leave granted.
This appeal by the assessee is directed against the order dt.
