Rakesh Garg, J. - (1.) THE Income Tax Appellate Tribunal, Chandigarh, vide order dated April 30, 1984, passed in R.A. No. 141 of 1983, arising out of I.T.A. No. 760 of 1981, for the assessment year 1974 -75 has referred the following question to this Court for its opinion: Whether, on the facts and in the circumstances of the case, the Appellate Tribunal erred in law in holding that the assessee was not liable to pay capital gains tax?
(2.) THE brief facts, out of which the present reference has arisen, are as under: The assessee -respondent filed a return declaring taxable income of Rs. 6,110 on December 13, 1977. In response to the notice under Section 143(2), the assessee through his counsel attended the assessment proceedings. It is the case of the assessee that the assessee acquired the land through court decree dated January 12, 1972, and claimed that he got this land under the provisions of the Punjab Occupancy Tenants Act, 1952, and no amount was paid in lieu of the acquisition of land. It was contended that the rights of ownership of the land were, thus, acquired by the assessee by operation of law, namely, Section 3 of the Punjab Occupancy Tenants (Vesting of Proprietary Rights) Act, 1952, and not by purchase or inheritance and, therefore, the assessee was not liable to pay any capital gains for the said land. However, the Income Tax Officer did not agree with the assessee and the amount received by the assessee from the acquisition of the said land was added to the income of the assessee. The said order for assessment was made under Section 143(3) of the Income Tax Act, on June 30, 1978.
(3.) THE assessee carried an appeal under Section 250(6) of the Income Tax Act, before the Commissioner (Appeals) who vide his order dated September 1, 1981, allowed the appeal of the assessee holding that no taxable capital gains arose in this case because the capital assets did not cost anything to the assessee in terms of money but had been acquired merely by operation of law. The appeal filed by the Revenue before the Income Tax Appellate Tribunal, Chandigarh, was also dismissed vide order dated July 30, 1983. The appeal of the Revenue was dismissed by the Tribunal relying upon its own decision in the case of Sh. Bahiev Singh (I.T.A. Nos. 462(ASR)/1979 and 694 (ASR)/1979, dated April 29, 1981.;