LAWS(APH)-1991-12-50

RAGHOTHAMA REDDY J Vs. COMMISSIONER OF INCOME TAX

Decided On December 12, 1991
J.RAGHOTHAMA REDDY Appellant
V/S
COMMISSIONER OF INCOME-TAX Respondents

JUDGEMENT

(1.) The Income-tax Appellate Tribunal has referred the question : "Whether, on the facts and in the circumstances of the case, there is material on record for the Commissioner to initiate revision proceedings ?" The reference R. C. No. of 1982 was made under section 256(1) of the Income-tax Act, 1961. In R. C. No. 122 of 1985, the petitioner had obtained orders from this court under section 256(2) of the Act requiring the Appellate Tribunal to refer the following questions : "(3) Whether, on the facts and in the circumstances of the case, the capital gains arising out of the acquisition of lands covered by survey No. 12 which was taken possession of by the Government on 12/10/1973, but in respect of which an award was passed on 20/07/1974, is taxable in the assessment year 1974-75 ? (4) If the answer to the above question is in the affirmative whether the Commissioner can revise the order for 1974-75 without revising the assessment order for 1975-76 and whether the Tribunal has jurisdiction to direct deletion of the income for the assessment year 1975-76 while the appeal before it was in respect of the assessment year 1974-75 ? (5) Whether capital gains in respect of survey number 12 can be said to arise in the assessment year 1974-75 when the dispute regarding the title to the land was cleared; only on 3/07/1974, relevant to the assessment year 1975-76 ? (6) (a) Whether the order of the Commissioner revising the assessment of the assessee for 1974-75 without revising the consequential assessment order of the assessee's son for 1974-75 and 1975-76 results in assessment of the same income in the hands of both the assessee and his son ? (b) Whether the Tribunal is justified in placing the burden of proving the assessment order of the assessee's son on the assessee and is justified in rejecting the contention of the assessee that it is for the Commissioner who seeks to revise the order, to bring on record the fact that the assessee's son was not assessed on his half share ? (7) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in upholding the Commissioner's remand order, remanding the assessment proceedings to the Income-tax Officer and disbelieving the compromise memo, especially when Md. Khaja is on more, having died on 1/01/1978 ? (8) Whether, on the facts and in the circumstances of the case, the Tribunal is justified in upholding the Commissioner's remand order, remanding the proceedings in respect of allowance of expenditure of Rs. 25,000 more so, when the vendor Narasingarao is dead ?" which the Tribunal has refused in exercise of its powers under section 256(1) of the Act.

(2.) The short facts which are necessary for us to answer the questions which are referred to us are the following :

(3.) The two items of landed property belonging to the assessee were notified under section 4 of the Land Acquisition Act on 22/09/1966. That was followed by a declaration under section 6 read with section 17(1) of the Land Acquisition Act which was published on 6/10/1966. On 17/11/1966, the Land Acquisition Officer published a notice under section 9(1) of the Act. Fifteen days thereafter, the Land Acquisition Officer could have taken possession of the land. By virtue of section 17(1) of the Act, the land would have vested absolutely in the Government free from all encumbrances on the date on which possession was so taken. Even though the Land Acquisition could have taken possession of the land immediately after the expiry of fifteen days after the notice under section 9(1) and should reasonably, have so done in view of the opening words of section 17(1) of the Act, possession was taken only on 12/10/1973. Awards were passed in respect of two separate holdings on different dates, i.e., on 29/10/1973 and 20/07/1974. The Income-tax Officer brought the capital gains arising out of the awards passed by the Tribunal to tax in the respective assessment years relevant to the previous years in which the awards were passed and the amounts of compensation were received. The Commissioner sought to revise that order in exercise of his powers under section 263 of the Income-tax Act. He found that the date which was material for deciding the notional date of receipt for computation of capital gains was the date on which the land vested in the Government and that date being 12/10/1973, he revised the order of assessment so as to bring the entire amount of capital gains arising out of receipt of compensation, for acquisition of the two items of property, to tax during the assessment year 1974-75.