COMMISSIONER OF INCOME TAX Vs. SOUTHERN ROADWAYS LTD

JUDGEMENT

(1.) The assessment year is 1972-73. The questions referred are : "1. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in admitting an additional ground raised by the assessee questioning the CIT (A)'s finding that profits as per Section 41(2) on sale of buses and other assets are properly assessable in the assessment year 1973-74?

(2.) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in holding that the CIT(A)'s findings that the profits under Section 41(2) are assessable in the assessment year 1973-74 and not in assessment year 1972-73 are only incidental findings and are not legally binding on the Assessing Officer?

(3.) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was correct in law in deleting Rs.55,21,856/- being profit u/s.41(2) from the total income for the assessment year 1972-73?" 2. The assessee was running a passenger bus service and owned 346 busses, 16 other vehicles, lands, buildings premises, spare parts, machinery, etc., all of which were acquired by the State under Section 3 of the Tamil Nadu Fleet Operators Stage Carriages (Acquisition) Act, 1971 (Tamil Nadu Act.XXXVII of 1971). That Act came into force on 07.12.1971. The assets of the assessee relating to it's bus transport system were taken over on 17.01.1972. 3. On the 21st of March 1972 the Government issued an order in which it was, inter alia, stated thus: The bus transport system of Southern Roadways Private Limited, Madurai, has been taken over by the Government on the 17th January, 1972 and transferred to the Pandyan Roadways Corporation Limited, Madurai on the same date. The Government have decided to pay to the Southern Roadways Private Limited, part compensation of Rs.51.50 lakhs (Rupees fifty one lakhs and fifty thousands) in cash in two equal instalments in March and April 1972, for their properties which have been taken over. Accordingly, the Government direct that a sum of Rs.25.75 lakhs (Rupees twenty five lakhs and seventy five thousands) be paid immediately in March 1972 to Southern Roadways Private Limited, Madurai, towards a portion of the part compensation and that the balance of the part compensation amounting to Rs.25.75 lakhs (Rupees twenty five lakhs and seventy five thousands) be paid to the firm in April 1972."