COMMISSIONER OF INCOME TAX Vs. RENU KHANNA SMT

JUDGEMENT

(1.) This is a petition under section 256(2) of the Income Tax Act, 1961 , relating to the assessment year 1976-77, which prays for a reference regarding the following three questions :

(2.) The facts of the case are that the assessed sold gold ornaments in a short period from December 22, 1975, to December 29, 1975, on various dates. This sale was disclosed under the Voluntary Disclosure Scheme, 1975, which was accepted by the Commissioner of Income Tax (Appeals). The sales were as follows : <FRM>JUDGEMENT_855_ITR160_1986.html</FRM>

(3.) On appeal, it was held by the Appellate Assistant Commissioner that the assessed was entitled to treat the previous year for the purpose of capital gains as the year ended on December 23, 1975. This was because of the language of section 3(1)(b) of the Income Tax Act, 1961 . The assessed had produced a note-book which recorded the transactions. If the assessed opts under section 3(1)(b) to choose the previous year, the option cannot be overruled by the Income Tax Officer. The Tribunal took the same view. In our view, the questions of law have an obvious answer because section 3(1)(b) is worded as follows :