RAJ PAL SINGH Vs. COMMISSIONER OF INCOME-TAX, HARYANA, ROHTAK
LAWS(SC)-2020-8-31
SUPREME COURT OF INDIA (FROM: PUNJAB & HARYANA)
Decided on August 25,2020

RAJ PAL SINGH Appellant
VERSUS
Commissioner Of Income-Tax, Haryana, Rohtak Respondents


Referred Judgements :-

JOGINDER SINGH'S CASE [REFERRED TO]
COMMISSIONER OF INCOME-TAX VS. PANDARI LAXMAIAH [REFERRED TO]
NAND RAM (D) THROUGH LRS. AND ORS. VS. JAGDISH PRASAD (D) THROUGH LRS [REFERRED TO]
FRUIT AND VEGETABLE MERCHANTS UNION VS. DELHI IMPROVEMENT TRUST [REFERRED TO]
SHAM LAL NARULA VS. COMMISSIONER OF INCOME TAX PUNJAB JAMMU AND KASHMIR HIMACHAL PRADESH AND PATIALA [REFERRED TO]
RM AR AR RM AR RAMANATHAN CHETTIAR VS. COMMISSIONER OF INCOME TAX MADRAS [REFERRED TO]
LT GOVERNOR OF HIMACHAL PRADESH VS. AVINASH SHARMA [REFERRED TO]
BHAWANJI LAKHAMSHI VS. HIMATLAL JAMNADAS DANI [REFERRED TO]
BADRILAL VS. MUNICIPAL CORPORATION OF INDORE [REFERRED TO]
JOGINDER SINGH VS. STATE OF PUNJAB [REFERRED TO]
COMMISSIONER OF INCOME TAX MADRAS VS. T N K GOVINDA RA JU CHETTY [REFERRED TO]
SPECIAL LAND ACQUISITION OFFICER BOMBAY VS. GODREJ AND BOYCE [REFERRED TO]
RAMA BAI VS. COMMISSIONER OF INCOME TAX A P HYDERABAD [REFERRED TO]
R V BHUPALPRASAD VS. STATE OF ANDHRA PRADESH [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. SHIVSAGAR ESTATE [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. NARENDRA DOSHI [REFERRED TO]
UNION OF INDIA VS. KAUMUDINI NARAYAN DALAL [REFERRED TO]
BERGER PAINTS INDIA LIMITED VS. COMMISSIONER OF INCOME TAX CALCUTTA [REFERRED TO]
MEC INDIA PRIVATE LIMITED VS. INDER MAIRA [REFERRED TO]
S APPALA NARASAMMA VS. COMMISSIONER OF INCOME TAX [REFERRED TO]
BUDDAIAH VS. COMMISSIONER OF INCOME TAX [REFERRED TO]
PETER JOHN VS. COMMISSIONER OF INCOME TAX [REFERRED TO]
BOMBAY BURMAH TRADING CORPORATION LIMITED VS. COMMISSIONER OF INCOME TAX [REFERRED TO]


JUDGEMENT

DINESH MAHESHWARI, J. - (1.)Preliminary And Brief Outline
This appeal takes exception to the judgment and order dated 23.04.2008 passed by the High Court of Punjab and Haryana at Chandigarh [For short, 'the High Court'.] in Income Tax Reference No. 53-A of 1991 whereby the High Court, while answering the reference under the then existing Section 256(1) of the Income-tax Act, 1961 [For short, 'the Act of 1961' or 'the Act'.], disapproved the order dated 29.06.1990 passed by the Income Tax Appellate Tribunal, Chandigarh Bench [For short, ITAT.] in ITA No. 739/Chandi/89 for the assessment year 1971-1972; and held that the capital gains arising out of land acquisition compensation were chargeable to income-tax under Section 45 of the Act of 1961 for the previous year referable to the date of award of compensation i.e., 29.09.1970 and not the date of notification for acquisition.

(2.)In the present case, the question concerning date of accrual of capital gains arose in the backdrop that though the proceedings for acquisition in question were taken up by way of notification dated 15.05.1968 and award of compensation was made on 29.09.1970 but, as a matter of fact, at the time of issuance of the initial notification for acquisition, the subject land was already in possession of the beneficiary under a lease, though the period of lease had expired on 31.08.1967. In the light of these facts, the ITAT did not approve of charging tax over capital gains with reference to the date of award while observing that the date of notification (i.e., 15.05.1968) would be treated as the date of taking over physical possession and the transaction (leading to capital gains) would be considered as having taken place on that date and not on the date of award (i.e., 29.09.1970). The High Court, however, did not agree with this line of reasoning and held that the amount of compensation was determined only on passing of the award dated 29.09.1970 and, therefore, if any capital gain was chargeable to tax, it would be chargeable for the previous year referable to the date of award.
(3.)Thus, the root question is as to whether, on the facts and in the circumstances of the present case, the High Court was right in taking the date of award as the date of accrual of capital gains for the purpose of Section 45 of the Act of 1961 ?
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