NAGASURI RAGHAVESWARA RAO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The two questions referred for decision by the Income-tax Appellate Tribunal, Hyderabad Bench, under section 66(1) of the Income-tax Act are :

(2.) Whether the amount received by the assessee under the sub-leases dated February 21, 1950, and November 20, 1956, were capital receipts and should not have been assessed to income-tax

(3.) The first question relates to the legality of the notice issued under section 34. The question of reopening of the assessment under section 34 arose only in the case of the first two assessment years 1950-51 and 1951-52. The contention is that section 34 is not attracted by the facts and circumstances of the case, and if at all, it is sub-section (1) (b) thereof and not (1) (a) that would be applicable and in that case, the statute of limitation would stand in the way of issuance of notice. In the view of the contention raised, it is expedient to notice the relevant portions of section 34 at this very stage. The said section reads thus :