Law:

Section:

Section 45, read with section 28(i), of the Income tax Act, 1961 - Capital gains - Chargeable as - Assessment years 1987-88 to 1989-90 - One 'F' purchased large tracts of land admeasuring about 2500 acres in or about 1923 - He died in 1936 and was survived by a son, 'E' and a daughter 'B' who inherited said property in equal shares - From early times, different portions of property were leased out to various persons against payment of ground rent for purposes of constructing house properties - From November 1968, agreements to sell were executed in respect of different portions of land - Assessing Officer held that profit arising from sale of land as business income - Tribunal, however, concluded that income realized upon sale of lands constituted capital gains and not business income - It was apparent from records that there was no transaction involving sale of land for a period of nearly sixty five years since purchase of land - Moreover, encroachments gradually took over certain areas of land and, thus, sale of land was not motivated by a desire to make a profit, but to protect corpus and resulting expenditure due to litigation - Whether on facts, impugned order passed by Tribunal was to be upheld - Held, yes [In favour of assessee] FACTS The late 'F', who was a partner in a firm of Solicitors, purchased large tracts of land admeasuring about 2500 acres in or about 1923. He died in 1936 and was survived by a son, 'E' and a daughter, 'B', both of whom were non-residents. Upon the death of 'F', his son and daughter became joint owners of the lands. Under the last will and testament of 'F', a life interest was created in half of his share in the land in favour of his daughter, 'B', a reversionary interest being created in favour of two U.S. based charities. From early times, different portions of the property were leased out to various persons against the payment of ground rent for the purposes of constructing house properties. Over time, a large part of the land was encroached upon. From November 1968, agreements to sell were executed in respect of different portions of the land. The provisions of the Urban Land (Ceiling and Regulation) Act, 1971 rendered some…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492