1965 PLP 832 (PTD)

In our opinion, on the facts of the case, the following question of law arises: "Whether, in computing the total income of Maneklal for the assessment year 1957-58, the sum of Rs. 70,860 has been properly included therein in accordance with the provisions of section 16(3)(a)(iii) of the income-tax Act, 1922?"

5. Having realised a sum of Rs. 1,54,800 by sale of 2,400 shares on August 1, 1956, Bai Laxmibai deposited the said sum with Messrs A. H. Bhivandiwalla & Co. in which Maneklal as well as his son, Sevantilal, happened to be partners. In the material account year, the said deposit fetched interest of Rs. 9,

288. The Income-tax Officer brought the said sum to tax in the hands of Maneklal by relying upon the provisions of section 16(3)(a)(iii). The assessee's contention before him was that no part of it could be so included inasmuch as the original shares, i.e., the assets transferred by the husband to the wife, ceased to exist in the hands of the wife long before. Being aggrieved by the said inclusion, the matter was taken in appeal by the assessee to the Appellate Assistant Commissioner. He directed that interest attributable to "the monetary value of the shares covered by the sale at the time of their gift" should be included in the total income of Maneklal in accordance with the provisions of section 16(3)(a)(iii) and the balance was to be excluded. The said monetary value of the gifted shares, at the time when the gift was made, was found to be Rs. 69,730 and the interest attributable to it was worked out at Rs. 4,

184. The result of the Appellate Assistant Commissioner's order, therefore, was that the addition of Rs.9,288 made by the Income-tax Officer stood reduced to Rs. 4,

184. A copy of the said order dated August 12, 1959, (C. A. P. No. 177 of 1958-59) of the Appellate Assistant Commissioner is marked Annexure "B" and forms part of the case. Being aggrieved by the said decision of the Appellate Assistant Commissioner, the Department brought the matter in appeal to the Tribunal and for reasons given by it in its order in I. T. A. No. 7559 of 1959-60, the Tribunal restored the inclusion to Rs. 9,

288. A copy of the said order is marked Annexure "C" and forms part of the case. It is necessary to point out that the assessee did not take any appeal against the sum of Rs. 4,184 that was retained by the Appellate Assistant. Commissioner and it was only the Department that came in appeal to the Tribunal against the reduction of Rs. 5,104 (i.e., Rs. 9,288 minus Rs. 4,184) granted by the Appellate Assistant Commissioner.

6. On these facts, the assessee now requires the following questions to be referred to the High Court: "(1) Whether in the circumstances and facts of the case the Tribunal was justified in upholding the inclusion of Rs. 9,288 earned by the wife of the deceased in the assessment of the applicant by virtue of section 16(3)(a)(iii) of the Act? (2) Whether the Tribunal had rightly held that the change of investment by the. wife of the original shares gifted by the husband would still attract the provisions of section 16(3)(a)(iii) of the Act to the extent of the whole amount realised on change of investment? (3) Whether on the facts and circumstances of the case the interest of Rs. 9,288 earned by the wife of the deceased on the sum realised by the sale of shares gifted by the deceased and deposited with Messrs A. H: Bhivandiwalla & Cc. was rightly included in the assessment of the applicant? (4) Whether the Tribunal rightly rejected the alternative claim of the applicant, viz., that only a proportionate part of the interest attributable to the value of the share on the date of the gift only, if at all, be included in the total income of the deceased ?" In our opinion, the reference made to the figure of Rs. 9,288 in the above questions is wrong; for, as already stated, the assessee had accepted the decision of the Appellate Assistant Commissioner so far as it related to the inclusion of Rs. 4,184 and did not appeal against it from the Appellate Assistant Commissioner's order. Hence the assessee's grievance that may arise out of the Tribunal's order (Annexure "C") in I. T. A. No. 7559 of 1959-60 can only- be in regard to the sum of Rs. 5,

104. Hence, in our opinion, on the facts of the present case, the following question of law arises out of the Tribunal's finding: "Whether in computing the total income of Maneklal for the assessment year 1958-59, the sum of Rs. 5,104 has been properly included therein in accordance with the provisions of section 16 (3) (a) (iii) of the Income-tax Act, 1922?"

7. The remaining two applications relating to the assessment year 1959-60, can now be taken up together. During the material account year, the said deposited sum of Rs. 1,54,800 once more produced interest income of Rs. 9,

288. The Income-tax Officer included the said sum in the computation of the total income of Maneklal for the assessment year 1959-60 by relying upon the provisions of section 16 (3) (a) (iii). In appeal, the Appellate Assistant Commissioner once more directed that the sum of Rs. 4,183 shall be retained and the balance of Rs. 5,105 shall be excluded. On this occasion, the assessee as well as the Department brought the matter in appeal to the Tribunal by their respective Appeals Nos. I. T. A. No. 11335 of 1959-60 and I. T. A. No. 390 of 1960-61. The Tribunal disposed of both .the appeals by its consolidated order made on February 9, 1961, a copy of which is marked Annexure "T)" and forms part of the case. For the reasons given therein, it rejected the assessee's contention to exclude the sum of Rs. 4,183 and accepted the Department's contention for including the sum of Rs. 5,

105. On these facts, the assessee now requires the Appellate Tribunal to refer to the High Court the following four questions for the assessment year 1959-60: "(1) Whether in the circumstances and facts of the case the Tribunal was justified in upholding the inclusion of Rs. 9,288 earned by the wife of the deceased in the assessment of the applicant by virtue of section 16 (3) (a) (iii) of the Act? (2) Whether the Tribunal had rightly held that the change of investment by the wife of the original shares gifted by the husband would still attract the provisions of section 16(3)(a)(iii) of the Act to the extent of the whole amount realised on change of investment? (3) Whether on the facts and circumstances of the case the interest of Rs. 9,288 earned by the wife of the deceased on the sum realised by the sale of shares gifted by the deceased and deposited with Messrs. A. H. Bhivandiwalla & Co. was rightly included in the assessment of the applicant? (4) Whether the Tribunal rightly rejected the alternative claim of the applicant, viz., that only a proportionate part of the interest attributable to the value of the shares on the date of the gift only, if at all, be included in the total income of the deceased? In our opinion, the following two questions of law arise: (i) Whether in computing the total income of Maneklal for the assessment year 1959-60, the sum of Rs. 4,183 has been properly included therein in accordance with the provisions of section 16 (3) (a) (iii) of the Income-tax Act, 1922? (ii) Whether in computing the total income of Maneklal for the assessment year 1959-60, the sum of Rs. 5,105 has been properly included therein in accordance with the provisions of section 16 (3) (a) (iii) of the Income-tax Act, 1922?"

8. We, therefore, refer the following questions to the High. "(i) Whether in computing the total income of Maneklal for the assessment year 1957-58, the sum of Rs. 70,860 has been properly included therein in accordance with the provisions of section 16 (3) (a) (iii) of the Income-tax Act, 1922? (ii) Whether in computing the total income of Maneklal for the assessment year 1958-59 the sum of Rs. 5,104 has been properly included therein in accordance with the provisions of section 16 (3) (a) (iii) of the Income-tax Act, 1922? (iii) Whether in computing the total income of Maneklal for the assessment year 1959-60, the sum of Rs. 4,183 has been properly included therein in accordance with the provisions of section 16 (3) (a) (iii) of the Income-tax Act, 1922? (iv) Whether in computing the total income of Maneklal for the assessment year 1959-60, the sum of Rs. 5,105 has been properly included therein in accordance with the provisions of section 16 (3) (a) (iii) of the Income-tax Act, 1922?" S. P. Mehta with Y. P. Trivedi for the Assessee. G. N. Joshi with R. J. Joshi for the Commissioner. V. S. DESAI, J.-The assessee is one Maneklal Sheth, who having died on 22nd April 1959, has been , represented in the present assessment proceedings, which relate to the assessment years 1957-58, 1958-59 and 1959-60, by his son, the present applicant before us. In the year 1951, the assessee Maneklal had made a gift of 1,184 ordinary and 155 preference shares of Changdeo Sugar Mills Ltd. to his wife, Bai Laxmibai. The total value of these transferred shares on the date of the transfer was Rs. 69,

730. Subsequent to the transfer of these shares by Maneklal to his wife, the preference shares were converted by the company into ordinary shares giving the shareholders 8 ordinary shares for one preference share, with the result that by the end of the year 1954 Bai Laxmibai possessed 2,424 ordinary shares of the mills. On the 1st of August 1956, Bai Laxmibai sold 2,400 out of the said shares possessed by her for a total price of Rs. 1,54,800 resulting in a capital gain of Rs. 70,860 as computed under section 12-B of the Income-tax Act. The whole amount realised by the sale of the shares was deposited by Bai Laxmibai with M/s. A. H. Bhivandiwalla & Co., in which Maneklal as well as his son, the present applicant, happened to be partners. The amount deposited by Bai Laxmibai fetched a yearly interest of Rs. 9,

288. In the assessment of Maneklal for the assessment year 1957-58 the Income-tax Officer included the amount of Rs. 70,860, which was, the profit made by Bai Laxmibai on the sale of the shares, as income of Maneklal under section 16 (3) (a) (iii) of the Indian Income-tax Act. Similarly, in the assessment of Maneklal for the assessment years 1958-59 and 1959-60 he included in each year the amount of Rs. 9,288 which was the interest earned by Bai Laxmibai on the deposit of the sale proceeds with M/s. Bhivandiwalla & Co. as the income of Maneklal under section 16 (3) (a) (iii). According to the Income-tax Officer the gain, which had resulted from the sale of the shares was the income of the wife of the assessee, which arose directly or indirectly from the assets , transferred by the assessee to his wife otherwise than for adequate consideration or in connection with an agreement to live apart and, therefore, was required to be included in the computation of the total income of Maneklal. He was also of the view that the amount of interest, which Bai Laxmibai had received from the sale proceeds deposited by her with M/s. Bhivandiwalla & Co., was also income of the wife of Maneklal, which arose directly or indirectly from the assets transferred by Maneklal to her and was, therefore, liable to be included in the computation of the total income of Maneklal. Accordingly, in the assessment order for the first year, he included the amount of Rs: 70,860 and in the assessment orders for the next two years, he included the amount of. Rs. 9,288 in the total taxable income of Maneklal. Appeals against all these three assessment orders were filed before the Appellate Assistant Commissioner. In the appeal against the first assessment order for the assessment year 1957-58, the Appellate Assistant Commissioner agreed with the view taken by the Income-tax Officer and dismissed the appeals. In the other two appeals he partly allowed the appeals taking the view that only that part of the interest, which was attributable to the monetary value of the shares covered by the shares at the time of the gift was liable to be included in the total income of Maneklal in accordance with the provisions of section 16 (3) (a) (iii) and the balance could not be included under the said provision. Since the monetary value of the shares gifted to Bai Laxmibai at the time when the gift was made- was only Rs. 69,730, the interest attributable to it worked out at Rs. 4,

183. Out of the total interest of Rs. 9,288, which was received by Bai Laxmibai in each of these years, he directed that only an amount of Rs. 4,183 should be included in the total income of Maneklal in each of these two years and the balance of Rs. 5,106 should be deleted. As against the decision and orders of the Appellate Assistant Commissioner in these appeals the assessee appealed to the Income-tax Appellate Tribunal against the decision and order in respect of the assessment year 1957-58 and also against the order in respect of the assessment year 1959-60 in so far as it had disallowed exemption in respect of the amount of Rs. 5,106 out of the total amount of Rs. 9,

288. The Department, on the other hand, appealed against the orders of the Appellate Assistant Commissioner for the years 1958-59 and 1959-60 in so far as they allowed exemption in respect of Rs. 4,183 out of the total amount of Rs. 9,288 for each year. The Income-tax Appellate Tribunal dismissed the assessee's appeal against the order of assessment passed by the Income-tax Officer for the assessment year 1957-58 and confirmed in appeal by the Appellate Assistant Commissioner. The Department's appeals arising out of the assessment orders for the assessment years 1958-59 and 1959-60 were allowed by the Tribunal and the assessee's appeal arising out of the assessment order for the assessment year 1959-60 was dismissed. According to these decisions of the Appellate Tribunal the result was that for the assessment year 1957-58 the decision of the departmental authorities that the amount of Rs. 70,860, which was the profit or gain on the sale of the shares by Bai Laxmibai was liable to be included in the total income of Maneklal was upheld and for the later two years the entire amount of interest, viz., Rs. 9,288, was held to be liable to be included in the total income of Maneklal in each of those two years. Thereafter at the instance of the assessee, the Tribunal has drawn up a consolidated statement of the case and referred to this Court the following questions of law, which arise out of its order passed in the appeals heard and decided by it relating to the assessment orders in respect of the aforesaid three assessment years: "(1) Whether in computing the total income of Maneklal for the assessment year 1957-58, the sum of Rs. 70,860 has been properly included therein in accordance with the provisions of section 16 (3) (a) (iii) of the Income-tax Act, 1922? (2) Whether in computing the total income of Maneklal for the assessment year 1958-59 the sum of Rs. 5,104 has been properly. included therein in accordance with the provisions of section 16 (3) (a) (iii) of the Income-tax Act, 1922? (3) Whether in computing the total income of Maneklal for the assessment year 1959-G0, the sum of Rs. 4,183 has been properly included therein in accordance with the provisions of section 16 (3) (a) (iii) of the Income-tax Act, 1922? (4) Whether in computing the total income of Maneklal for the assessment year 1959-60, the sum of Rs. 5,105 has been properly included therein in accordance with the provisions of section 16 (3) (a) (iii) of the Income-tax Act, 1922?" It will be seen that the first question arises out of the assessment order for the assessment year 1957-58; the second relates to the assessment order for the assessment year 1958-59 and the last two questions are concerned with the assessment order for the assessment year 1959-60. It will also be seen that question No. 2 and question No. 4 are the same, with the only difference that question No. 2 is for the assessment year 1958-59, while question No. 4 is for the subsequent assessment year. Question No. 3, which is one of the questions relating to the assessment order for the year 1959-60, has not been pressed by Mr. Mehta learned counsel for the assessee. The conclusion of the Tribunal so far as that question is concerned is accepted as correct by Mr. Mehta and he has advanced no arguments challenging that conclusion. That question, therefore, will be answered in the affirmative. The amount of Rs. 70,860, which is involved in the first question, is the surplus obtained on the sale of the shares, which were transferred by Maneklal to his wife and the question that has to be considered is whether the said surplus constitutes the income of the wife of Maneklal, which has arisen directly or indirectly from the assets transferred by Maneklal to his wife otherwise than for adequate consideration or in connection with an agreement to live apart. The shares, on the sale of which this surplus has arisen, were admittedly assets transferred by Maneklal to his wife otherwise than for adequate consideration or in connection with an agreement to live apart. What is required to be considered is whether the surplus is income of the wife, which has arisen directly or indirectly from the transferred assets. The argument of Mr. Mehta, learned counsel for the assessee, is that what comes within the ambit of section 16 (3) (a) (iii) is the income from the transferred assets, which is different from the profit or gain arising from the sale of the transferred assets, or, in other words, the "capital gains" from the transferred assets. "Income" as defined in section 2 (6-C) of the Income-tax Act includes "capital gains" chargeable under section 12-B, and "capital gains" chargeable under section 12-B are profits or gains arising from the sale, exchange, relinquishment or transfer of a capital asset effected after the 31st day of March 1956. This kind of income, however, is not the income from property such as is contemplated under the income-tax Act, because income from property under the Indian Income-tax Act is income which he comes under the specific head mentioned in section 6 and is computable under section 9 of the Indian Income-tax Act. Capital gains though it constitutes income under the inclusive definition of the word "income", is income under a distinctly different head from the income coming under the head "income from property". The language used in section 16 (3) (a) (iii) has reference to the income coming under the head "income from property" and not to income, which comes under the head "capital gains". This argument is sought to be supported on two considerations. It is pointed out in the first place that section 16 (3) (a) (iii) has been enacted in 1937 when the word "income" did not include "capital gains" and "income from property" was understood to be income falling under that head in section 6 of the Act. The inclusion of "capital gains" in "income" was for the first time in 1947 and "capital gain" as a distinct and separate head of income was also created at that time. The expression "income from property" in section 16 (3) (a) (iii), therefore, must be understood in the context of the meaning that it had when enacted in 1937. Although in 1947 capital gains was included as an item of income in the inclusive definition of the word, no change was made in section 16 (3) (a) (iii) to show that this extension of income was also intended to be incorporated in section 16 (3) (a) (iii). Secondly, it is argued that the expression "income from property" having been used in section 5 as a distinct head of income and a new head as "capital gain" having been created in 1947 for the computation of the capital gain which was thenceforward included as an item of income, the expression "income from property" must be understood differently and must be given a different meaning from the meaning which the expression "capital gains" has. However, it will be seen, says the learned counsel, that the expression "capital gain" read in the light of section 12-B, which is prescribed for its computation, will show that the income, which is called "capital gain" is the profit or gain not arising from the asset but from the sale of the asset. That, according to the learned counsel, is the reason why different heads have been created for "income from property" and "capital gains", the first one to indicate the property as the source of the income and the second to emphasise that not the property but the sale of the property is the source of the income. Mr. Mehta's argument therefore, is that What comes within the ambit of section 16 (3) (a) (iii) is income from the asset, i.e., the income which the asset produces, while it continues to remain in the hands of the assessee and does not include the gain, which the assessee makes by selling the asset and parting with possession of it. We are not impressed by the argument of the learned counsel. "Income" under section 2 (6-C) includes capital gains chargeable under section 12-B. Capital gains chargeable under section 12-B is profits or gains arising from the sale of a capital asset. The profits or gains which arise from the sale of the asset would arise or spring from the asset, although the operation by which the profits or gains is made to arise out of the asset is the operation of the sale. If the asset is employed say by way of investment and produces income, the income arises or springs from the asset: the operation, which causes the income to spring from the asset, is the operation of the investment. In the operation of the investment, income is produced while the asset continues to belong to the assessee, while in the operation of a sale, gain is produced, which is still income, but in the process possession of the asset is parted with. Although the processes involved in the two cases are different, the gain which has resulted to the owner of the asset, in each case, in our opinion, is the gain, which has sprung up or arisen from the asset. We do not, therefore, feel inclined to accept Mr. Mehta's submission that capital gain is not "income" arising from the asset but it is income, which arises from the sale of the asset, that is, from a source which is different from the asset itself. Nor are we impressed by his other argument that having regard to the fact that when section 16 (3) (a) (iii) was enacted income, which was contemplated by it, could not have included profits or gains arising on the sale of an asset. It is true that at the time when section 16 (3) (a) (iii) was enacted income did not include capital gains. But the capital gains having been brought within the meaning of "income", the expression "income" as used in section 16 (3) (a) (iii) would mean income according to the amended definition of the word and would, therefore, include the capital gains. The argument that although the word "income" is capable of including capital gains, the income arising directly or indirectly from assets would not include income arising directly or indirectly from the sale of the asset, but only such income as arises directly or indirectly from the assets, which continue to be with the assessee and are not parted with by him also does not appeal to us. We do not see any reason why such a meaning must result from the provisions of section 16 (3) (a) (iii). As we have already stated earlier, we do not accept Mr. Mehta's argument that income from assets cannot be income from the sale of the assets. According to us, both the incomes arise from the asset itself and come within the ambit of section 16 (3) (a) (iii). Mr. Mehta has invited our attention to Commissioner of Income-tax v. Sodra Devi and Damayanti Sahni v. Commissioner of Income-tax ((1957) 32 I T R 615), for his submission that there is a distinction between income from property and income from the sale of the assets. We do not dispute that there is distinction because while in one case the income is obtained with the asset continuing with the assessee as in the case of an investment producing interest, while in the other case the income is in the nature of gain which the assessee has obtained by parting with possession of the asset for all future times. We do not, however, think that the decision referred to by Mr. Mehta is an authority for the proposition that gain from the sale of the assets could not be income from the asset. That case was primarily concerned with the question as to what was the true meaning and interpretation of the words "individual" and "such individual" occurring in section 16 (3) in connection with the inclusion of certain incomes under the provisions of that section in the total inc3me of the assessee. We find, however, on the other hand, in Navinchandra Mafatlal v. Commissioner of Income-tax ((1954) 26 I T R 758), that the Supreme Court has held that capital gains, which has been included within the meaning of the word "income" in section 2 (6-C) of the Indian Income-tax Act, is income within the meaning of the word "income" in entry 54 in List I of the Seventh Schedule to the Government of India Act, 1935, and the Central Legislature was competent to include capital gains within the term "income" and tax it within its legislative competence. The argument advanced in that case was that what was competent for the Legislature to legislate under entry 54 in List I of the Seventh Schedule to the Government of India Act, 1935, was income, and capital gain which was the gain on the sale of the assets was not income and could not fall within that entry. The Supreme Court held that the word "income" was wide enough to include a gain of that kind. It observed: "Its natural meaning embraces any profit or gain which is actually received." Income would, therefore, mean everything that came in to the assessee. In our opinion, therefore, the amount of Rs. 70,860 which was the capital gain on the sale of the transferred assets was income arising directly or indirectly from the transferred assets and was, therefore, liable to be included in the total income of Maneklal for the assessment year 1957-58. In that view of the matter, our answer to the first question must be in the affirmative. Coming to the second and the fourth questions, which essentially constitute one question, what is required to be considered is whether the interest from the entire proceeds from the sale of the transferred assets, which was obtained by the wife for the subsequent years, was liable to be included in the total income of the husband for those years or only such of it as was attributable to the value of the transferred assets on the date of the transfer by the husband to the wife. Now the facts are that the value of the assets at the date of the transfer, having regard to the fact that a part of the transferred shares, which were preference shares, were converted by the company into ordinary shares was Rs. 69,

730. When these transferred assets were sold in the year 1956, they realised Rs. 1,54,800 and the gain, which was made by Bai Laxmibai, was Rs. 70,860, because what she had got from the husband was worth Rs. 69,73-0 and what she realised on the sale of it was Rs. 1,54,

800. Now, the transaction could be regarded as a conversion of the asset from one form into another: the assets which were transferred to Bai Laxmibai were converted by her into cash which amounted to Rs. 1,54,800 and this amount in cash was held by Bai Laxmibai as the assets held by her in another form. There was another way, however, of looking at the matter, viz., that the sale proceeds which Bai Laxmibai realised on the sale of the assets gave her back the value of the asset and a certain gain over that value. In other words, the amount of Rs. 1,54,800 received by Bai Laxmibai on the sale or the shares held by her, gave her value of the assets, viz., Rs. 69,730, and a gain, viz., Rs. 70,

860. The Department for the year 1957-58 chose to look upon it in the latter way and took the view that the assets transferred were converted into cash for their corresponding value at the date of the transfer and the rest was the income in the form of capital gains from the said assets. In other words, an amount of Rs. 69,730 represented in cash the transferred asset, while the surplus of Rs. 70,860 constituted the income. That, part, which was income, it included within the total income of the husband and brought it to tax. Now, that being the basis adopted by the Income-tax Department, the same must obviously hold good for the subsequent years of taxation. Now, on this basis the amount of Rs. 1,54,800, which Bai Laxmibai deposited with Messrs Bhivandiwalla & Co. constituted the deposit of the transferred assets to the extent of Rs, 69,730 and the deposit of the income which was the balance. The income, which she got in the next year was, therefore, attributable only to the extent of Rs. 4,184 to the transferred assets represented by Rs. 69,730 and the rest was attributable to the balance. Now, what would be liable to be included in the total income of the husband for the subsequent years would be the income of the wife from the transferred assets and nothing more. The transferred asset in the new form i.e., transformed into cash being only of the value of Rs. 69,730, the interest attributable to that amount would be the income from the transferred assets arising directly or indirectly from the transferred assets to the wife otherwise than for adequate consideration or in connection with an agreement to live apart within the meaning of section 16 (3) (a) (iii) and the rest of it would undoubtedly be the income of the wife but it -was not the income from the, transferred assets but it was the income from the income, which she had received during the previous year. In our opinion, therefore, out of the interest received by Bai Laxmibai for the subsequent years 1958-59 and 1959-60 only such interest as would be attributable to the value of the transferred assets, viz., the amount of Rs. 69,730, would be liable to be included in the total income of Maneklal and not the rest. Since the amount of Rs, 5,104, which is mentioned in questions Nos. 2 and 4 is the amount, which is not attributable to the value of the transferred assets viz., Rs. 69,730, but to the balance as held by the departmental authorities, that amount is not liable to be included in the total income of the assessee. Mr. Joshi has tried to point out to us that the amount of Rs. 5,104 which is mentioned in the said questions is not actually the amount which is attributable to the balance. That amount, according to him, would come to something less than that amount. We are afraid, we cannot go into that investigation. The question that has been framed and referred to us is on the basis that the amount of Rs. 5,104 is the amount, which is attributable to the balance of the sale proceeds over their value of Rs. 69,730 at the date of the transfer. The Appellate Assistant Commissioner, who made a division of the total interest of Rs. 9,288 into two parts, viz., Rs. 4,183 and Rs. 5,105, made it on the basis that Rs. 4,183 was the part, which was attributable to the value of the assets, viz., Rs. 69,730, and the rest, viz., Rs. 5,105, attributable to the balance. This decision arrived at by-the Appellate Assistant Commissioner was not thereafter questioned by either party before the Tribunal. We cannot, therefore, proceed to investigate into the figure, which is mentioned in questions Nos. 2 and

4. If in view of the decision that we are taking it is possible for the Department to urge before the Tribunal- when- the matter goes back to it after we have answered the questions, the Department may, if so advised, urge those contentions before the Tribunal and the Tribunal may consider them for what they are worth. In our opinion, therefore, questions Nos. 2 and 4 must be answered in favour of the assessee and against the Department. As we have already pointed out earlier question No. 3 will be answered in the affirmative since the counsel for the assessee has not pressed it and has accepted the conclusion of the Tribunal with regard to the point involved in the said question as correct. The result, therefore, is that the question No. 1, is answered in the affirmative. Questions Nos. 2 and 4 are answered in the negative. Question No. 3 is answered in the affirmative. In view of the fact that the Department as well as the assessee have succeeded partially, there will be no order as to costs.