SYED ABDUL BASIR Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS reference made at the instance of the assessee is to answer the following questions of law, namely :

(2.) THE assessee has been assessed in the status of an individual. THE relevant assessment year is 1965-66 corresponding to the financial year 1964-65. THE assessee received compensation for compulsory acquisition of some land on Beawar Road at Ajmer amounting to Rs. 4,33,043. He was also paid interest thereon. THE possession of land was taken on April 17, 1964, as a result of the compulsory acquisition. THE assessee was given a notice by the Department to show cause why the capital gains arising on the amount of compensation should not be taxed as a capital gain. THE Income-tax Officer found that the assessee received Rs. 4,33,043 as compensation for the land and the market value thereof as on January 1, 1954, was Rs. 1,05,049, as a result of which the capital gain amounted to Rs. 3,27,994. Accordingly, the Income-tax Officer completed the assessment on a total income calculated by including the capital gain of Rs. 3,27,994. THE assessee's appeal was dismissed by the Appellate Assistant Commissioner who affirmed the Income-tax Officer's above conclusion as well as the further conclusion that this capital gain had to be taxed for the assessment year 1965-66. THE assessee's further appeal to the Tribunal also failed. THE assessee then applied to the Tribunal for a reference to this court for decision of the above questions of law under Section 256(1) of the Income-tax Act, 1961. This is how the reference has been made at the instance of the assessee for decision of the above-quoted questions of law.

(3.) THE parties shall bear their own costs.