- (1.) The High Court answered against the Revenue all the following questions, except Question No. 3 which, in the High Court's view, did not arise for consideration :- "1. Whether on the facts and in the circumstances of the case and in law, the Appellate Tribunal was correct in holding that the amount realised by the sale of assessee's interest in the property was only Rs. 4,33,960/- i.e., Rs. 5,62,980/- minus Rs. 1,29,020/-? 2. Whether on the facts and in the circumstances of the case and in law, the Appellate Tribunal was correct in holding that the amount realised under the charge or mortgage by the Government by public auction does not partake the character of 'full value of consideration' envisaged u/S. 48 of the I.T. Act? 3. Whether on the facts and in the circumstances of the case and in law, the Appellate Tribunal was justified in holding that the amount payable by the assessee in discharge of the mortgage debt to the Government on the sale of property was an expenditure incurred towards the cost of acquisition of the capital assets and deductible under S. 48 of the I.T. Act ? 4. Whether on the facts and in the circumstances of the case and in law, the Appellate Tribunal was correct in holding that the assessee was not vested with full interest in the property sold and capital gains be computed only with reference to the price realised towards his interest with property?" The Revenue is in appeal by certificate.
(2.) The assessee has been served but has not chosen to put in an appearance.
(3.) The assessment year with which we are concerned is Assessment Year 1982-83. The assessee carried on abkari business. In the course of the financial year 1970-71 he mortgaged to the Excise Department of the State of Andhra Pradesh immovable property belonging to him at Waltair. He did so to provide security for the amounts of 'kist' which were due by him to the State. The State, in the assessment year with which we are concerned, sold the immovable property by public auction, without the intervention of the court, to realise its dues. A sum of Rs. 5,62,980/- was realised at the auction. Thereout, the State deducted the amount of Rs. 1,29,020/- due to it towards 'kist' and interest and paid over the balance to the assessee.;