COMMISSIONER OF INCOME TAX Vs. DUMRAON COLD STORAGE AND REFRIGERATION SERVICE PRIVATE LIMITED

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal under Section 256(1) of the I.T. Act, 1961 (hereinafter to be referred to as "the Act"), has submitted the statement of the case for opinion of this court on the following question of law :

(2.) IN view of Section 45 of the Act any profit and gain arising from the transfer of capital asset is chargeable to income-tax under the heading "Capital gains" and is treated to be an income of the previous year in which the transfer took place. "Capital assets" has been defined in Sub-section (14) of Section 2 of the Act. The definition of "Capital asset" has been amended by the Finance Act, 1970, which came into force with effect from April 1, 1970. IN this reference we are concerned with the definition of "Capital asset" as it stood prior to April 1, 1970. During the relevant period an agricultural land could not have been included in the definition of "capital asset". As such, the answer to the question referred depends on the fact whether the lands in question have been rightly held as agricultural lands on the date of their sale.

(3.) IN the case of CWT v. Officer-in-Charge (Court of Wards), Paigah [1976] 105 ITR 133 (SC), while trying to define an "agricultural land", it was observed by the Supreme Court as follows (p. 136):