Law: Income Tax Act, 1961

Section: 2(47),45,256.

Income-tax----Reference---Capital gains---Agreement for transfer of immovable property---Subsequent dispute and compromise---Amount received as damages---Question whether there was a transfer within the meaning of S.2(47) and whether amount was assessable as capital gains---Question of law---Indian Income Tax Act, 1961, Ss.2(47), 45 & 256. The assessee-firm had entered into a contract with R for a consideration of Rs.1,05,000 to purchase a certain property by a deed of agreement, dated September 25, 1970. The contract was not carried out and eventually the assessee-firm was compelled to file a civil suit for specific performance of the contract which was dismissed on November 27, 1976, by the District Judge on the ground that no valid sale was possible and permissible for want of sanction of the Indore Municipal Corporation and the competent Authority under the Urban Land (Ceiling and Regulation) Act, 1976. The assessee then filed an appeal before the High Court which terminated in a compromise by which the assessee received damages. This was brought to tax by the Assessing Officer. However, the Tribunal held that it vas not taxable as capital gains. On an application to direct reference: Held, allowing the application, that the question whether the Tribunal was justified in holding that the amount of Rs.7,34,000 was a capital receipt not exigible to capital gain tax as no transfer of any property had taken place within the meaning of section 2(47) of the Income Tax Act, 1961, was a question of law. Baroda Cement and Chemicals Ltd. v. CIT (1986) 158 ITR 636 (Guj.); CIT v. Abbasbhoy A. Dehgamwalla (1992) 195 ITR 2$ (Bom.); CIT v. Tata Services Ltd. (1980) 122 ITR 594 (Bom.); Madan (D.B.) v. CIT (1991) 192 ITR 344 (SC) and Vania Silk Mills (P.) Ltd. v. CIT (1991) 191 ITR 647 (SC) ref. JUDGMENT A. R. TIWARI, J.---The applicant (Commissioner of Income-tax, Bhopal), has filed these three applications under section 256(2) of the Income Tax Act, 1961 (for short "the Act"), seeking direction to the Tribunal to state the cases and refer the un-demoted common question of law arising out of the order, dated July 27, 1992, passed in I.T.A. No. 1040/lnd of 1991, on…

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