TaxTMI 
TaxTMI 
1971 (8) TMI 33
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....simple mortgage of immovable properties and the interest was payable according to the terms of the mortgage. In September, 1933, the assessee purchased a portion of the mortgaged property for Rs. 35,000. Out of this amount a sum of Rs. 3,000 was adjusted against the mortgagor's share of the loss in a firm which was payable to the assessee. The balance of Rs. 32,000 was adjusted against the mortgage debt leaving a sum of Rs. 8,000 outstanding on the mortgage. Between the date of mortgage in September, 1930, and the date of sale three years later, the mortgagors had effected further encumbrances on the properties which were the subject-matter of mortgage. The assessee had to pay Rs. 17,800 to the mesne encumbrancers. In October, 1946, the ass....
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....eferred and was duly referred by the Tribunal to the High Court : " Whether the sum of Rs. 52,313, realized in excess by the assessee on the sale of the property in the circumstances narrated above, constitute the profits and gains of the business of money-lending carried on by the assessee ? " The High Court took into consideration the circumstances which had been adverted to by the Tribunal. One of the prominent circumstances was that the assessee had paid the sum of Rs. 17,800 to the puisne mortgagees in order to safeguard the title to the properties acquired by the assessee in 1933. That amount had been debited by the assessee to the money-lending account. It was pointed out that no satisfactory explanation had been furnished by the a....