SHAH VRAJLAL MADHAVJI Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Cochin Bench, has referred the following two questions to this court:

(2.) WHETHER, on the facts and in the circumstances of the case, the assessment of the sum of Rs. 90,867 as capital gains arising to the assessee in the assessment year 1963-64 is valid in law ?"

(3.) COUNSEL on behalf of the assessee contended before us that it is not possible to postulate the quantum of the capital gains before it was finally settled by the final judgment in appeal either of this court or in given cases by the Supreme Court and, therefore, it was not possible for the taxing authorities to impose any tax on the basis of capital gains arising out of a compulsory acquisition of the land unless the quantum of the compensation had been settled as indicated above. COUNSEL also contended that the principle of equitable estoppel has no application. He further stressed that in case the High Court reduced the quantum of the compensation in appeal, the assessee will be left without a remedy and the effect of the order of assessment would be to impose a tax on a non-existing income and, therefore, the order of the Tribunal was erroneous.