COMMISSIONER OF INCOME TAX Vs. SHANTILAL BHOGILAL NANAVATI

JUDGEMENT

(1.) THE property situate in Raikhad in Ahmedabad, owned by the assessee HUF as acquired by the state. Notification under s. 4 of the land Acquisition Act, 1894 (hereinafter referred to as the "Act") was issued on 16th Aug., 1960 and notification under s. 6 of the Act was issued on 16th Feb., 1964. THE award under the Act was passed on 5th March, 1965, and the possession of the property was taken on 30th June, 1966. Capital gains arising out of the acquisition of the property was included by the ITO in the assessment framed for the asst. yr. 1965-66. THE AAC having confirmed the order of the ITO, the asessee carried the matter in appeal before the IT Tribunal. Before the Tribunal, the assessee raised two additional ground contending to the effect that as the property stood transferred and vested in the State on 30th June 1966, the date on which possession of the property was taken, the capital gains, if any, is not taxable in the asst. yr. 1966-66. It may be mentioned here that the year of account of the assessee is Sambvat Year. THE Revenue raised the assessee's prayer to raise additional ground as stated above. THE Tribunal however, permitted the assessee to raise additional ground and on merits held that capital gains was not taxable in the assessment year under appeal i.e. the asst. yr. 1965-66. In the result, the Tribunal allowed the appeal.

(2.) THE main contention which is raised in this reference is whether the Tribunal was right in permitting the assessee to raise the additional grounds. At the instance of the Revenue, the Tribunal has referred the following two questions to this Court for its opinion :