Judgment :- R. JAYASIMHA BABU, J. The Tribunal held that the mortgage by conditional sale is a mortgage and is not a sale which is liable to be cancelled at the option of the mortgagor at a subsequent date. A mortgage once created remains a mortgage unless it is foreclosed or redeemed. There was no foreclosure of the mortgage during the assessment year. The foreclosure was an event which occurred in the subsequent year. The Assessing Officer therefore could not have treated the sale as having been taken place in the assessment year 1976-77. The assessee had executed a deed describing it as mortgage by conditional sale on January 24, 1976, giving thereunder a right to the mortgagee to foreclose the mortgage in the event of the mortgagor failing to repay the amount secured thereunder within four months. The assessee failed to repay the amount within that period which expired in the subsequent assessment year. Section 58 of the Transfer of Property Act which occurs in Chapter IV deals with mortgages of immovable property and charges. Mortgage by conditional sale is one of the modes by which mortgage can be created. The other types of mortgages being simple mortgage; usufructuary mortgage; English mortgage; mortgage by deposit of title deeds and anomalous mortgage. Clause (c) of section 58 deals with mortgage by conditional sale. It reads thus : "(c) Mortgage by conditional sale. - Where the mortgagor ostensibly sells the mortgaged property - on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or on condition that on such payment being made the sale shall become void, or on condition that on such payment being made the buyer shall transfer the property to the seller,the transaction is called a mortgage by conditional sale and the mortgagee, a mortgagee by conditional sale : Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale." The mortgage by conditional sale is therefore very much a mortgage and as the description of the deed indicates, the mortgage is created by incorporating the condition in the document by which the mortgage is created, though the document itself is one by which the mortgagor ostensibly sells the property. Ostensible sale is not by itself a sale though it may become one when the condition regarding repayment is not fulfilled. Ostensible sale in case of mortgage by conditional sale is in reality a mortgage, subject to the conditions set out in the document. The mortgagee cannot claim right of ownership on the date of the execution of the mortgage by conditional sale. It is only if and when the condition embodied in the document is not complied with by the mortgagor, that the mortgagee can lay claim to the ownership of the property ostensibly sold under that document. Till then the property continues to remain the property of the mortgagor. The right of redemption of the mortgage vests in the mortgagor and the mortgagee remains under an obligation to discharge the mortgage on the condition embodied in the document regarding repayment within the stipulated time being fulfilled. The Tribunal was right in holding that there was no sale of the property on the date on which the mortgage by way of conditional sale was created by the execution of the document in relation thereto. The question referred to us as to whether in the facts and circumstances of the case, the sum of Rs. 64, 000 being the amount secured under a mortgage by conditional sale can be taken to be a transfer within the meaning of section 2(47) of the Income-tax Act, 1961, and whether the said sum can be taken as capital gain either in the year of mortgage or in the year of foreclosure, is answered by holding that it can be taken as transfer only in the year of foreclosure and not in the year in which the mortgage was created.