COMMISSIONER OF INCOME-TAX Vs. DIDAR SINGH

JUDGEMENT

(1.) IN the previous year relating to the assessment year 1975-76, Didar Singh sold ancestral agricultural land measuring 3 acres, 3 kanals and 2 marlas for a consideration of Rs. 1,76,625. In the return filed for declaring capital gains, he showed the cost of the agricultural land at Rs. 30,000 per acre as on February 28, 1970, in view of the fact that the agricultural land was brought within the definition of "capital asset" contained in Section 2 (14) of the Income-tax Act, 1961 (for short "the Act"), by virtue of the amendment brought on April 1, 1970. The Income-tax Officer did not agree with the assessee and held that the cost price as on January 1, 1954, had to be considered and not as on February 28, 1970. This he did in view of Section 55 (2) of the Act.

(2.) ON appeal, the Appellate Assistant Commissioner agreed with the assessee and found the price fixed by him to be reasonable. The Income-tax Appellate Tribunal, Chandigarh, agreed with the appellate order and dismissed the appeal filed by the Revenue.

(3.) AT the instance of the Revenue, the Tribunal has referred the following question for opinion : "whether the Appellate Tribunal has been right in law in holding that the cost of acquisition or the value should be ascertained as on February 28, 1970, for the purposes of capital gains in view of the provisions of Section 2 (14) of the Income-tax Act as amended with effect from April 1, 1970?"