H.H. Maharajakumari Meenakshideviavaru Vs. Commissioner of Income-tax, Karnataka - Court Judgment

Excerpt:
- karnataka scheduled castes & scheduled tribes (prohibition of transfer of certain lands) act, 1978, sections 3(e) & 4: [arali nagaraj,j] usufructuary mortgage of granted land validity - suit for permanent injunction against defendants restraining them from interfering with taking of the yield of fruits from mango trees grown in the lands in question - defendants suit for declaration that the registered sale deed dated 18.2.1987 as null and void - transfer of land covered under the ptcl act - held, though the said transaction is described as sale and though the document is described as sale deed in substance the said transaction was one of usufructuary mortgage with possession of the said land and the said mango trees grown thereon entitling the plaintiff to enjoy te fruits of the said trees for a period of 40 years from the date of the document and as such the said document could only be a mortgage deed in substance and not a sale deed. the transaction was transfer within the meaning of section 3(e) of the ptcl act. section 4 of ptcl act prohibits the transfer of granted lands. sub section (2) of section 4 further provides that no person shall, after the commencement of the said, act, transfer or acquire by transfer any granted land without the previous permission of the government. the mortgage of the said land by the defendant/grantee in favour of the plaintiff authorizing the plaintiff to enjoy usufructs was clearly in violation of the provisions of section 4 of the ptcl act. the burden is heavy on the plaintiff to prove that the said mortgage was not obtained by him in contravention of the provisions of section 4 of the ptcl act. on facts held, the transaction is in total violation of the provisions of section 4(1) of the ptcl act, the possession of the land in question along with the mango trees grown thereon by the plaintiff could not be held to be lawful possession. therefore, the appellate court was quite justified in passing the impugned judgment and decree dismissing the suit. - 4. the assessee failed in her appeal before the aac and in further appeal before the tribunal.rajasekhara murthy, j. 1. the following question has been referred by the income-tax appellate tribunal, bangalore bench, under s. 256(1) of the i.t. act, for the opinion of this court : 'whether, on the facts and in the circumstances of the case, the tribunal was right in holding that the interest deducted by the bank on fixed deposits surrendered prematurely could not be allowed as deduction against interest on fixed deposits earned during the year ?' 2. in the assessment of the assessee for the assessment year 1975-76, the ito brought to tax a sum of rs. 10,101 being the income from interest on fixed deposits in bank under 'other sources'. during the year, the assessee had terminated the fixed deposits prematurely. thereupon the bank recalculated the interest because of the premature termination. as a result of such recalculation, the assessee was asked to pay back rs. 47,683 being the amount of interest which was paid in excess by the bank for all the years up to the date of termination. 3. the assessee claimed this amount was a deduction in her assessment. the ito rejected the claim on the ground that the repayment made by her could not be treated as an expense incurred for the purpose of earning the interest on fixed deposits. 4. the assessee failed in her appeal before the aac and in further appeal before the tribunal. 5. being aggrieved by the order of the tribunal, the assessee had sought this reference on the question referred to above. 6. as could be seen from the order of assessment, under the hear 'other sources', a sum of rs. 10,101 was assessed as interest earned on the fixed deposits during the year. that was the interest that accrued to the assessee on her fixed deposits in the bank till the date of termination. the deduction of the excess interest by the bank was effected on account of the premature termination of the fixed deposits. this, in our opinion, had absolutely no connection with the interest earned by the assessee up the date of termination. 7. the termination was, therefore, justified in disallowing the claim for deduction of rs. 47,683 in the assessment of the assessee for the year 1975-76. 8. in the result, we answer the question in the affirmative and against the assessee.