- (1.) THE following question of law has been referred for the opinion of this Court by the Tribunal, Amritsar Bench, Amritsar 1972 -73 : "Whether, on the facts and in the circumstances of the case, the Tribunal has been in error in upholding the CIT(A)'s decision that the capital gains of Rs. 6,27,614 and related interest of Rs. 27,649 arising out of the acquisition of the agricultural lands situated within the municipal limits of Pathankot did not give rise to any capital gain taxable under the IT Act, 1961 -
(2.) THE assessee owned land which was allotted to him in lieu of land left in Pakistan. The said land was acquired by the Government, which was sought to be taxed for capital gains on transfer of land. The CIT(A) accepted the claim of the assessee on the ground that the assessee had not incurred any cost of acquisition and this view was upheld by the Tribunal, relying upon the judgment of the Hon'ble Supreme Court in CIT vs. B.C. Srinivasa Setty (1981) 21 CTR (SC) 138 : (1981) 128 ITR 294 (SC).
(3.) IN B.C. Srinivasa Setty's case (supra), the Hon'ble Supreme Court held that for charging tax under the head "Capital gains", the transaction must fall within the computation provisions of s. 48 of the Act. Otherwise, the transaction must be regarded as never intended to be subject to charge. In that case, the question was whether a firm was liable to pay capital gains on sale of its goodwill. It was held that consideration received for such a sale could not be subjected to capital gains as the cost of acquisition of goodwill was incapable of being determined. In the present case, the question is whether income from capital gains was not liable to be subjected to tax on the same principle. As far as goodwill is concerned, the same is built up over a period of time while the cost of land is not incapable of being ascertained. It cannot be held that there is no cost of acquisition.;