JEEJEEBAI SHINDE Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY this reference under Section 256(1) of the I.T. Act, 1961 (hereinafter referred to as "the Act"), the Income-tax Appellate Tribunal, Indore Bench, has referred to this court the following question of law for its opinion :

(2.) THE material facts giving rise to this reference, as set out in the statement of case, are as follows :

(3.) THE provisions of Section 71(2) of the M.P. Town Improvement Trust Act make it clear that the title to the land compulsorily acquired vested in the Trust from the date of publication of the notification under Section 71(1) of the Act. As Section 2(47) of the (I.T.) Act, includes compulsory acquisition of land in the expression "transfer'', such transfer must be held to have taken place on the date of publication of the notification under Section 71(1) of the (M.P.) Act. By the fiction introduced by Section 45 of the (I.T.) Act, it is provided that the profits or gains arising from the transfer of a capital asset shall be deemed to be the income of the previous year, in which the transfer took place. Accordingly, capital gains have to be assessed in the assessment year corresponding to the previous year, in which the transfer took place, fn the instant case the transfer took place on November 9, 1973, when the notification under Section 71(1) of the M.P. Town Improvement Trust Act, 1961, was published. THErefore, that is the date when the transfer was effected. THE date when the consideration for transfer was received or accrued is not relevant for the purpose of determining the year of chargeability on account of the fiction introduced by Section 45 of the Act. Whatever may be the date of receipt or accrual of consideration as a result of the transfer of a capital asset, the accrual or receipt of consideration would have to be attributed, by statutory mandate, to the year of transfer. Hence, an enquiry into the question as to when the right to receive the compensation amount accrues to a person, in the case of compulsory acquisition of his property under the provisions of the M.P. Town Improvement Trust Act, 1961, though interesting, would not be relevant for the purpose of determining the year of chargeability of the capital gains because the relevant year is, by virtue of the deeming provisions of Section 45 of the (I.T.) Act, 1961, the year when the transfer took place.