Law:

Section:

Section 45, read with sections 28, 48 and 49, of the Income-tax Act, 1961 - Capital gains - Chargeable as - Assessment year 1986-87 - Assessee was carrying on business in respect of some items other than white cement - It obtained a licence for setting up manufacturing business of white cement - Instead of setting up a business, assessee had transferred licence to some other concern - Whether since licence was not an outcome of existing business carried on by assessee, benefit arising out of said licence could not be said to be a benefit arising out of a business, as pursuant to said licence no new business was set up - Held, yes - Whether licence cannot be described to be something other than a capital asset and since cost of acquisition of licence could not be assessed, it could not be computed under section 48 and unless it was computable under section 48, it could not be charged under section 45 - Held, yes Section 256(2) of the Income-tax Act, 1961 - High Court, reference to - General - Whether where two questions are directly opposite to each other and one cannot be conceived to be included within other nor can be reconciled together, either one is to be referred - Held, yes - Whether though revenue did not file cross-objection or cross-appeal before Tribunal, it was entitled to support order of Commissioner (Appeals) and alternatively that of Assessing Officer, but revenue would be precluded from raising same contention in reference under section 256(2) since said question had not been referred to High Court - Held, yes FACTS The assessee was carrying on business in respect of some items other than white cement. It obtained a licence for setting up manufacturing business of white cement. Instead of setting up a business, the assessee had transferred the licence to some other concern for consideration. In the return, that amount was shown but exemption was claimed by the assessee on the ground that that was not taxable either as income from business or as capital gains. The Assessing Officer treated the licence as capital asset and the amount as capital gains. On appeal, the Commissioner (Appeals) treated it as an income from business. On appeal, the…

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