Law: Income Tax Act, 1961

Section: 2,45,80T,256(2)

Income-tax---Reference---Capital gains---Bifurcation of capital gains into long-term capital gains and short-term capital gains---Land held for more than prescribed period of 36 months and building constructed on it and held for less than prescribed period---Tribunal justified in holding that land could be considered to be a long-term capital asset---Direction by Tribunal to bifurcate capital gains into long-term capital gain pertaining to land and short-term capital gain pertaining to superstructure---Valid---No question of law arose--¬Indian Income Tax Act, 1961, Ss.2, 45, 80T & 256(2). The definition of capital asset includes property of any kind and land held by the assessee is a capital asset and a building held by the assessee .is also a capital asset and it is possible to bifurcate the capital gain arising with reference to the sale of the land and building even if they are sold as one unit, if the lands are held by the assessee for a period more than that prescribed under section 2(42A) of the Income Tax Act, 1961, namely, 36 months. It is not possible to say that by construction of the building, the land which was a long-term capital asset, has ceased to be a long-term capital asset. The land is an independent and an identifiable capital asset, and it continues to remain as an identifiable capital asset even after construction of the building. Held, dismissing the application for reference, that the Tribunal was right in law in directing bifurcation of the capital gains into long-term capital gains pertaining to land and short-term capital gains pertaining to superstructure. No question of law arose from its order. CIT v. Vimal Chand Golecha (1993) 201 ITR 442 (Raj.) fol. Bishan Das v. State of Punjab AIR 1961 SC 1570; Narayan Das Khetty v. Jatindra Nath Roy Chowdhry AIR 1927 PC 135; Park View Enterprises v. State Government of Tamil Nadu (1991) 189 ITR 192 (Mad.) and State of Kerala v. P. P. Hassan Koya AIR 1968 SC 1201 JUDGMENT N. V. BALASUBRAMANIAN, J.---This a petition filed by the Commissioner of Income-tax, Tamil Nadu-V, Madras, under section 256(2) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), to direct the Appellate…

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