ALEXANDER GEORGE Vs. COMMISSIONER OF INCOME TAX
HIGH COURT OF KERALA
COMMISSIONER OF INCOME TAX
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(1.) THIS reference is at the instance of the assessee. The year in question is 1986 -87. The facts of the case are as follows :
(2.) ASSESSEE was the owner of 2.47 acres of land situated in Thrikkakara Panchayat. The assessee received a total sum of Rs. 15,56,015 as compensation on acquisition of the land by the State Government. Before the AO, the assessee had claimed that it was agricultural land and so the capital gains arising on the transfer was not liable to tax under the IT Act. The AO did not accept that claim and he prepared to make the assessment of the capital gains at Rs. 13,33,987.
In the assessee's appeal, the CIT(A) held that the capital gains arising on the transfer of the land constituted income within the meaning of Section 2(14) of the Act and so it was rightly brought to tax. Another contention that the assessee had raised before the CIT(A) was that the capital gains, if at all taxable, was to be assessed for the asst. yr. 1987 -88 and not for the asst. yr. 1986 -87. The CIT(A) did not agree and his finding was that the land was taken over by the State Government on 14th May, 1985, invoking the urgency provisions in the Land Acquisition Act.
(3.) AGGRIEVED by the above order, the assessee filed second appeal before the Tribunal. The main contention taken by the assessee before the Tribunal was that the CIT(A) had erred in holding that the capital gains arising on the acquisition of the property was rightly brought to tax for the asst. yr. 1986 -87, whereas according to the assessee, it was assessable for the asst. yr. 1987 -88. The Tribunal took the view that the transfer took place in the year ending on 31st March, 1986. Another contention raised before the Tribunal is that since the notification including the Thrikkakara was cancelled in 1994, the compensation cannot be included as capital gains. Thus, the appeal was dismissed by the Tribunal.;
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