Ajit K. Sengupta, J. - (1.) In these two references--one at the instance of the Revenue and the other at the instance of the assessee--the following questions have been referred to this court under Section 256(2) of the Income-tax Act, 1961, for the assessment year 1980-81 : Income-tax Reference No. 32 of 1991 (at the instance of the Revenue): "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the amount of Rs. 2 lakhs which became payable by the Government of West Bengal to the assessee by virtue of the order dated February 28, 1980, of the Calcutta High Court was a capital asset and profit on transfer of this asset was taxable under the head 'Capital gains' ? (2) Whether the Tribunal was justified in holding that, in determining the capital gains on the transaction between the assessee and the Government of West Bengal resulting from the order dated February 28, 1980, of the Calcutta High Court, the cost of the capital asset would be the amount spent towards stamp duty and other legal expenses incurred for obtaining the decree ?"
(2.) Income-tax Reference No. 9 of 1992 (at the instance of the assessee): "1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the sum of Rs, 2,00,000 received by the assessee in terms of the order dated February 28, 1980, passed by the High Court was assessable as capital gains ? 2. Whether the findings of the Tribunal in relation to the mesne profits are against the evidence on record, unreasonable and/or otherwise perverse or contrary to law ?"
(3.) Shortly stated, the facts leading to these references are that the assessee inherited, on the death of her husband in 1960, a property which was under lease. The lease expired in 1970. However, the lessee did not give possession to the assessee. The assessee filed a suit for eviction and mesne profits. The suit was decreed in favour of the assessee on August 11, 1971. The decree was affirmed on May 19, 1970 (sic) by the Additional District Judge, by this court on May 6, 1976, by the Supreme Court on September 19, 1971. (sic). The assessee then applied for the execution of the decree. The court appointed a commissioner to determine the claim of quantum of mesne profits. While the execution of the said decree and the quantum of the mesne profits were pending, the Government of West Bengal requisitioned the demised property on December 24, 1979. The said requisition order was challenged by the assessee before this court through a writ application filed under Article 226 of the Constitution. A settlement was arrived at between the assessee and the State of West Bengal in the said writ application which was recorded by this court in its order dated February 28, 1980, and September 6, 1985.;