COMMISSIONER OF INCOME TAX Vs. GLORY PAUL

JUDGEMENT

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

(2.) THE respondent is an assessee to income-tax. We are concerned with the assessment year 1980-81. While making the assessment, the assessing authority brought to tax the capital gains arising from the sale of properties by the assessee. THE assessee objected tot he assessment stating that the property sold was agricultural land. THE plea was negatived. In appeal, the Appellate Assistant Commissioner held that the property was situate in the Cochin Corporation area and its sale will attract capital gains under the Income-tax Act. THE levy of capital gains, on the profits arising on the sale thereof, was justified. THE Appellate Tribunal, relying upon the decision of the Bombay High Court in Manubhai A. Sheth v. N. D. Nirgudkar, Secound ITO, 1981 128 ITR 87, held that the captial gains arising out of the sale of agricultural land is not liable to levy of captial gains tax under the Income-tax Act. THEreafter, at the instance of the Revenue, the Income-tax Appellate Tribunal has referred the question of law, extracted hereinabove, for the decision of this court.