- (1.) In this reference under Section 256(1) of the Income-tax Act, 1961, for the assessment year 1982-83, the following questions of law have been referred to this court : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the entire proceeds of gold were invested in acquisition of other capital assets, within the meaning of Section 11(1A) of the Income-tax Act, 1961 ? Whether the Tribunal was justified in law in holding that the assessee-trust was entitled to exemption under Section 11(1 A) of the Income-tax Act, 1961, in respect of Rs. 41,000 being capital gains arising on sale of gold"
(2.) Shortly stated the facts are that during the relevant previous year the assessee-trust sold gold, received by way of a corpus donation in the preceding year, for a sum of Rs. 7,38,500 and made a profit of Rs. 41,000. The assessee claimed that the net consideration of the sale was kept in fixed deposit with Dena Bank, Calcutta, on December 12, 1981, and was thus utilised for acquiring a new capital asset. It was urged that the capital gain was, therefore, exempt under Section 11(1A) of the Income-tax Act, 1961.
(3.) The Income-tax Officer found that the sale proceeds of gold were lent on interest to two concerns which were subsequently repaid and credited in the assessee's bank account with Dena Bank. Out of the amount received from the parties, the assessee-trust again gave a loan of Rs. 7,50,00,000 to M/s. Bharat Petroleum Corpn. The Income-tax Officer did not, therefore, accept the assessee's contention that the net consideration from the sale of gold was deposited in Dena Bank on December 12, 1981, as claimed, and was utilised in acquiring a new capital asset. The Income-tax Officer accordingly did not allow exemption in respect of capital gains under Section 11(1A) of the Income-tax Act, 1961.;