- (1.)The Assessment Year in question is 1989-1990. The Assessee has been subjected to payment of income-tax on capital gains accruing from land acquisition compensation and sale of land. The dispute is as to how the cost of acquisition is to be worked out for the purposes of deduction of such cost from the receipts so as to arrive at the correct quantum of capital gains exigible to tax under the Income-Tax Act, 1961 (for short "the Act").
(2.)The Assessing Officer as well as the First Appellate Authority took into account the declaration made in the return filed by the Assessee under the Wealth Tax Act (Rs.2 per square yard) in respect of the very plot of land as the cost of acquisition. Some instances of comparable sales showing higher value at which such transactions were made (Rs.70.00 per square yard) were also laid by the Assessee before the Assessing Officer. The same were not accepted on the ground that such sales were subsequent in point of time i.e. 1978-1979 whereas under Sec. 55(2)of the Act the crucial date for determination of the cost of acquisition is 1st April, 1974.
(3.)The matter reached the learned Income Tax Appellate Tribunal (for short "the Tribunal") by way of further appeal by the Assessee. The learned Tribunal took the view that the comparable sales cannot altogether be ignored. Therefore, though the comparable sales were at a higher value of Rs. 70.00 per square yard, the learned Tribunal thought it proper to determine the cost of acquisition at Rs. 50.00 per square yard. In Second Appeal, the High Court exercising jurisdiction under Sec. 260A of the Act reversed the said finding bringing the Assessee to this Court by way of present appeal.