MATHEW M THOMAS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The appellants purchased certain lands with build-ings thereon in 1977 for a sum of Rs. 2,45,000/-. The Inspector of Income-tax valued them at Rs. 3,24,000/- and later in 1979 the Departmental Valuation Officer valued them at Rs. 7,24,000/-. The Inspecting Assistant Commissioner, Acquisition Range, Ernakulam ordered acquisition of the property on 31-3-1981. The appellants filed an appeal to the Tribunal by order dated 31-10-1981. The appeal was allowed and the proceedings were cancelled. As against the said order, the Revenue filed an appeal under Section 269-H in the High Court of Kerala.

(2.) During the pendency of the appeal, Chapter XX-C was introduced in the Income-tax Act (hereinafter referred to as 'Act') by Finance Act of 1986 w.e.f. October 1, 1986. Under Section 269-RR, Chapter XX-A was made inapplicable in relation to transfer of an immovable property after September 30, 1986. The Central Board of Direct Taxes (hereinafter referred to as 'C.B.D.T.') issued Circular No. 455 dated 16-9-1986. The relevant part of the Circular reads as follows:-

(3.) When the appeal was taken up by the High Court, the appellants herein contended that the acquisition proceedings had to be dropped as the consideration was only Rs. 2,45,000/-. The matter was referred to a Full Bench of the High Court for decision on the question whether Administrative Circular issued by the C.B.D.T. under the Act to supplement the statute can supplant the same by deviating or detracting or going beyond or contrary to the statutory provisions.