COMMISSIONER OF INCOME TAX Vs. RAJA MALWINDER SINGH

JUDGEMENT

(1.) This matter has been placed before this Bench in pursuance of order of reference dated October 1, 2010 as under:

(2.) The Assessee is an individual. For the assessment years in question, i.e., 1977-78 and 1979-80, the Assessee sold plots of land for consideration on which tax under the head of ''Capital gains'' was sought to be levied. The Assessee contested the levy by submitting that cost of acquisition by the previous owner was incapable of being ascertained. The previous owner was an ex ruler of the Pepsu State and the asset was acquired under the instrument of annexation and thus, its cost of acquisition could not be ascertained. Capital gain was attracted only when the cost of acquisition was capable of being ascertained. This plea was rejected and the assessing officer proceeded to assess capital gain taking the cost of acquisition equal to the market value as on January 1, 1954/January 1, 1964 depending on the dates specified under Section 55(2) of the Act as applicable to the year of assessment. On appeal, the Commissioner of Income-tax (Appeals) rejected the plea of the Assessee that the cost of acquisition being incapable of ascertainment, no capital gain was attracted. However, the Tribunal reversed the said view following the judgment of the honble Supreme Court in B.C. Srinivasa Settys case, 1981 128 ITR 294 and also earlier orders passed by the Tribunal in the cases of Amrinder Singh and Shiv Dev Inder:

(3.) Since at the time of hearing of the references before the Division Bench, 3 reliance was placed upon a judgment of this Court in Amrik Singhs case, 2008 299 ITR 14, prima facie, differing with the view taken therein, the.matter was referred to be heard by a larger Bench.