COMMISSIONER OF INCOME TAX Vs. BOLLA RAMAIAH

JUDGEMENT

(1.) Identical questions are referred in these three cases. Though the assessees are different, the basic facts are identical. It would be enough if we set out the questions referred in R.C. No. 16 of 1982. The questions are :

(2.) The lands of the assessees in R.C. Nos. 16 of 1982 and 18 of 1982 are situated in Hakimpet village, which is included within the municipal limits of Hyderabad City. The lands of the assessee in R.C. No. 11 of 1982 are situated in Guddimalkapur village, which is situated within 8 kilometres of the local limits of the Hyderabad Municipal Corporation. These lands were requisitioned by the defence authorities under the provisions of the Requisitioning and Acquisition of Immovable Property Act, 1952. A few years later, i.e., in 1970, these lands were proposed to be acquired. The notification acquiring these lands under section 7 of the said Act was published on 12/03/1970, though it is dated 12/02/1970. An award was passed and compensation was awarded to the assessees.

(3.) The income-tax authorities sought to tax the capital gains arising from the said acquisition. The assessees contested the taxability on three grounds, viz., (a) that the acquisition was complete before 1/03/1970, the date prescribed in clause (viii) of section 47 of the Income-tax Act;. (b) that the lands were "agricultural lands" on the date of acquisition and hence did not constitute a "capital asset" as defined in clause (14)(iii) of section 2 of the Income-tax Act; and (c) that, inasmuch as the assessees have purchased other agricultural lands within two years of the acquisition, they are entitled to the benefit of section 54B of the Income-tax Act. All the three contentions were negatived in all the three cases by all the authorities, whereupon they have asked for and obtained these references.