NADIRSHAH RUSTAMJI MULLA Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) IN Writ Petition No. 1907 of 1982, the petitioner Nadirshah Rustamji Mulla. His wife, Meherbai Nadirshah Mulla, is the petitioner in Write Petition No. 1908 of 1982. The petitioners in both these petitions, at the relevant time, were co -owners of about 80 acres of agricultural land situated at Majiwade, District Thane. These lands were purchased by them in the year 1944. The lands have been used used for agricultural purposes and the agricultural income from these lands is disclosed in the return of income filed by the petitioners.

(2.) BY a conveyance dated February 28, 1974, the petitioners sold a portion of the said agricultural land and measuring 42,788 square metres to Uni Abex Alloy Products Ltd. for a price of Rs, 4,86,700. By another conveyance dated March 29, 1974, the petitioners sold a further portion of the said agricultural land with a farm house and a small portion of non -agricultural land, all together admeasuring 38,148 square meters to Universal Ferro and Allied Chemicals Ltd. for a price of Rs. 4,33,743. Out of the lands sold under this conveyance, non -agricultural land admeasured 7,383 square metres and the proportionate sale price of non -agricultural land was computed at Rs. 83,945. Hence, under the conveyance of March 29, 1974, the price realised for the agricultural lands and farm house was Rs. 3,49,798. The total sale consideration received by the petitioners in respect of sales of agricultural lands and farm house for the assessment year 1974 -75 was Rs. 9,06,498.

(3.) THE ITO by his assessment order dated December 27, computed the capital gains on the sale of the said agricultural lands and farm house at Rs. 5,98,639. Since each of the petitioners had a half share in these lands, the amount of capital gains so ascertained was apportioned half and half between the petitioners. The petitioners have paid tax on the said capital gains as well as interest on the said amount under the provisions of s. 220, sub -s. (2), of the I.T. Act, 1961.