High Court Of Rajasthan
CIT vs. Bhanwarlal Choudhary
Section 256(2)
Asst. Year 1987-88
N.N. Mathur & Harbans Lal, JJ.
IT Ref. No. 15 of 1998
30th August, 2001
Counsel Appeared
Sandeep Bhandawat, for the Petitioner : Ajay Kothari, for the Respondent
JUDGMENT
N.N. MATHUR, J. :
This application under s. 256(2) of the IT Act has been made by the Department seeking direction against the Tribunal to refer the following question of law for the opinion of this Court :
(1) Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that reopening of the case for the year under consideration was not valid, nor justified ?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in holding that the income is not assessable in the asst. yr. 1987-88 despite the amended provisions of s. 45(5) of the IT Act, 1961 ?
(3) Whether, on the facts and in the circumstances of the case, the Tribunal was legally justified in allowing relief to the assessee by holding that decision of the Hon’ble Supreme Court in the case of G.M. Omer Khan vs. CIT (1992) 106 CTR (SC) 288 : (1992) 196 ITR 269 (SC) : TC 20R.536, was applicable in the present case where income had been assessed on the basis of the provisions of s. 45(5) of the IT Act, 1961?
The necessary facts leading to the instant application are that the Land Acquisition Officer, Jodhpur, made an award with respect to the land of the assessee-respondent acquired under the Notification dt. 10th Oct., 1974. On appeal the amount of compensation was enhanced. The respondent-assessee received the enhanced compensation on 27th Oct., 1986. An assessment was made on the amount of compensation as well as enhanced compensation in the asst. yr. 1975-76. The proceedings were reopened under s. 147, sub-cl. (a) for the year 1987-88 on the ground that the amount of compensation has been received in the year 1986. The assessee took the plea that income by way of capital gain was assessable in the relevant assessment year only and the amount of interest was to be assessable in respect of the year of which the interest related. This plea was rejected by the AO. The CIT(A) set aside the order of the assessment. The CIT(A) held that as the amount of enhanced compensation was received by the assessee in the year 1986, therefore, the capital gain could not be assessed for the asst. yr. 1987-88 as per s. 45(5) as the same was introduced in the year 1988. On second appeal by the Department, the Tribunal agreed with the view of the CIT(A).
It is contended by Mr. Sandeep Bhandawat, learned counsel for the Revenue, that sub-s. (5) of s. 45 specifically deals with the cases of compulsory acquisition and is applicable with reference to the date of receipt of the compensation notwithstanding anything contained in sub-s. (1) of s. 45 relating the year in which the transfer took place. We find no substance in the contention of the learned counsel for the Revenue. The note on Finance Bill 1987, clearly speaks that the amendments will take effect from 1st April, 1988, and will accordingly apply in relation to the asst. yr. 1988-89 and subsequent years. It is not in dispute that the sub-cl. (5) of s. 45 was introduced by the Finance Bill, 1987. It is also not in dispute that the enhanced compensation was received on 27th Oct., 1986. Thus, the instant matter pertains to asst. yr. 1987-88. Thus, sub-s. (5) of s. 45 is not attracted. The Tribunal has rightly held that the assessment can be made only in accordance with the provisions of s. 45(1) of the IT Act
4. In view of the aforesaid, no referable question of law arises from the order of the Tribunal. The Tribunal was perfectly justified in refusing to make a reference on the questions of law formulated by the Department for the opinion of this Court. Accordingly, the reference application is rejected.
[Citation : 254 ITR 637]