- (1.) ON an application under S. 256(1) of the IT Act, 1961 ('the Act'), the Tribunal has referred the following question for our opinion : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the Capital Gain, if any, arising from the acquisition of the assessee's land is not assessable in the assessment year 1965-66 ?"
(2.) THE assessee is Estate Mineral Development Co. (P) Ltd. and the assessment year under reference is 1965-66. The original assessment in this case was completed under S. 143(3) of the Act, on 30th June, 1987. Subsequently, the assessment was reopened under S. 147(a) of the Act on the material information in possession of the AO that the assessee has received the compensation of Rs. 8,23,188 from the Government of Orissa. The assessee has claimed that this amount is not taxable. The claim of the assessee was rejected. The amount of compensation was taxed as capital gains (short-term) on the ground that the assessee purchased the land in question in 1963 and a notification under S. 4 of the Land Acquisition Act has been issued for acquisition of this land on 8th April, 1964. In appeal before the CIT(A), the CIT(A) found that the land has not been transferred in the accounting year relevant to the asst. yr. 1965-66. Therefore, that amount of compensation cannot be taxed in the asst. yr. 1965-66. In appeal before the Tribunal, the Tribunal has endorsed the view taken by CIT(A).
(3.) NONE appeared for the assessee. Heard the learned counsel for the Revenue. Mr. Agarwal submits that though for the purpose of business the accounting year ended on 31st Dec., 1964, the assessee had not opted the separate accounting year for capital gain tax, therefore, for this purpose the year ending is 31st March, 1965. Thus, the amount of compensation can be taxed as capital gain in the asst. yr. 1965-66.;