COMMISSIONER OF INCOME TAX Vs. DAMODARAN PILLAI K

JUDGEMENT

(1.) AT the instance of the Revenue, the Income-tax Appellate Tribunal (in short, "the Tribunal") has referred the following question of law for the decision of this court:

(2.) THE respondent is an assessee to income-tax. THE matter arises in connection with the assessment year 1982-83 for which the accounting period ended on March 31, 1982. THE assessee sold 77.649 cents of land in Cheruvakkal Village for a total consideration of Rs. 1,22,000. He pleaded that the entire property is agricultural land and so, no capital gains tax is exigible in view of the decision of the Bombay High Court in Manubhai A. Sheth v. N. D. Nirgudkar [1981] 128 ITR 87. THE Income-tax Officer declined to accept this plea. THE capital gains on the sale of the property was brought to tax. In appeal, the Appellate Assistant Commissioner upheld the said assessment. In further appeal by the assessee, the Tribunal, followed its earlier decision and also the decision of the Bombay High Court in Manubhai A. Sheth's case [1981] 128 ITR 87, had held that the asses-see is not liable to be taxed on the capital gains arising out of the sale of the agricultural lands situate in Cheruvakkal village. It is thereafter at the instance of the Revenue that the question of law, formulated hereinabove, has been referred for the decision of this court.

(3.) WE answer the question referred to this court in the affirmative, against the assessee and in favour of the Revenue.