COMMISSIONER OF INCOME TAX Vs. VIJAY FLEXIBLE CONTAINERS

JUDGEMENT

(1.) THIS reference is made at the instance of the Revenue. The question raised reads thus : 'Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was justified in law in holding that the amount of Rs. 1,00,000, being the compensation received by the assessee from Messrs. B. V. Dhuru and others, cannot be treated as 'capital gains' in the hands of the assessee ?'

(2.) THE reference relates to the assessment year 1972 -73.

(3.) THE sum of Rs. 1,17,500 was received by the assessee during the course of the previous year relevant to the assessment year 1972 -73 The Income -tax Officer held that the right that the assessee had acquired under the said agreement for sale was a capital asset. Upon the extinguishment of that right, the assessee had received the sum of Rs. 1,17,500. Deducting the cost of acquisition of the capital asset in the amount of Rs. 17,500 and expenses and legal charges in the sum of Rs. 17,904, the income -tax Officer found the capital gain to be Rs. 82,086. The Appellate Assistant Commissioner allowed the appeal preferred by the assessee holding that the said agreement for sale did not bring a capital asset into existence, the Revenue preferred an appeal against his decision before the Income -tax Appellate Tribunal. The Tribunal upheld the decision.