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JUDGMENT Ajay Kumar Mittal, J. - This appeal has been preferred by the assessee under section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 15.5.2013 Annexure A-3, passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh in ITA No.l72/Chd/2010 for the assessment year 2006-07, claiming following substantial questions of law:- "(i) Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal has fallen in error in applying the ratio of the judgment of the Hon'ble Court in the case of CIT v. Raja Malwinder Singh, [2011] 334 ITR 48 to the facts and circumstances of the present case? (ii) Whether in facts and circumstances of the case, the Income Tax Appellate Tribunal has fallen in error in applying the provisions of section 55(3) of the Income Tax Act to compute the capital gain even though there was no cost of acquisition of the acquired land and thus no profits and gains could be computed on acquisition of the same?" 2. A few facts relevant for the decision of the controversy involved, as narrated in the appeal may be noticed. Agricultural land measuring 146 kanals 19 marlas was situated within the municipal limits of Barnala which was acquired by the Improvement Trust, Barnala. Compensation of Rs. 2,77,51,294/- was awarded as per award dated 28.11.2005. Since the land was gifted to the appellant by the Maharaja of Patiala, the cost of acquisition of the land was the same as to the Maharaja of Patiala. Since the Maharaja did not incur any cost, the same was not chargeable to tax under section 45 of the Act. The Assessing Officer rejected the said plea of the appellant vide order dated 24.12.2008, Annexure A.l by holding that as per the provisions of section 55(3) of the Act, even in cases where the cost of acquisition to the previous owner could not be ascertained, the same had to be computed by taking into account the fair market value of the assets as on 1.4.1981. The Assessing Officer adopted the market value of the land as on 1.4.1981 and computed the capital gains in relation to the acquisition of land. Aggrieved by the order, the assessee filed appeal before the Commissioner of…

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