K.S. Viswanathan, Accountant Member - (1.)THESE are two cross-appeals by the assessee and the department against the order of the Appellate Asstt. Commissioner for the asst. year .1.973-74. The dispute is about the levy of tax on capital gains in respect of the sale of some property of the assessee. The assessee is an individual. He had certain properties which were admittedly cultivated and therefore were agricultural lands. THESE agricultural lands were requisitioned by the Government for Defence Services some time in 1940s. Thereafter, the property was in possession of the Defence Services and was used as a parade ground. There is no dispute that after the Defence authorities have Jaken over the lands, no agricultural operations were carried out.
(2.)In 1973, the Government acquired these lands under the Requisition and Acquisition of the Immovable Properties Act, 1952. After the acquisition an Arbitrator was appointed who gave his award on 11-3-81.
In the original assessment proceedings, no capital gains was shown but in the reassessment proceedings the assessee admitted capital gains in part III of the return. It was submitted in the course of the assessment proceedings that the land was agricultural and would not be considered for the purpose of capital gains as a capital asset. This argument was rejected and the Income-tax Officer determined the capital gains at Rs. 27,480,

(3.)THE assessee appealed. THE Appellate Asstt. Commissioner rejected the claim of the assessee that no capital gains could be levied. However, he accepted an alternate contention that the solatium of Rs. 15,001 received by the assessee would not be includible. Against the first finding, the assessee is on appeal and against the second finding as solatium, the department is on appeal.