KUBERBHAI DHANJIBHAI PATEL vs. COMMISSIONER OF INCOME TAX

ITR/12/1987HC GujaratGJHC24011745198719 July 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA2 pages
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What were the facts?

The assessee, Kuberbhai Dhanjibhai Patel, sought a reference to the High Court of Gujarat under Section 256(1) of the Income-tax Act, 1961. The reference concerned a question of law arising from an order of the Income Tax Appellate Tribunal, Ahmedabad Bench 'C'. The dispute involved a capital gain of Rs. 38,177 arising from the sale of agricultural land. The assessee contended that this gain was not taxable under the Income-tax Act, while the revenue argued otherwise. The High Court was asked to decide whether this capital gain was liable to tax.

What did the High Court hold?

The High Court of Gujarat held that the capital gain arising from the sale of agricultural land is subject to income tax. The Court's decision was based on the law laid down by the Hon'ble Supreme Court in the case of Singhai Rakesh Kumar vs. Union of India & Others, 247 I.T.R. 150. The reasoning is that the Supreme Court's judgment clearly establishes that such capital gains are taxable. Therefore, the question referred to the High Court was answered in the affirmative, in favour of the revenue and against the assessee. The operative direction was to answer the reference accordingly. No issue was expressly left undecided.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the capital gain of Rs. 38,177/- arising from the sale of agricultural land was liable to tax under the Income-tax Act, 1961? Assessee's Contention: The assessee argued that capital gains arising from the sale of agricultural land were not taxable under the Income-tax Act, 1961. The specific authorities or precedents relied upon by the assessee are not recorded in the judgment. Revenue's Contention: The revenue contended that the capital gain from the sale of agricultural land was indeed liable to tax under the Income-tax Act, 1961. The revenue relied on the decision of the Hon'ble Supreme Court in the case of Singhai Rakesh Kumar vs. Union of India & Others, 247 I.T.R. 150.

Which sections of the Income-tax Act were involved?

Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 12 of 1987

For Approval and Signature:

Hon'ble MR.JUSTICE A.R.DAVE and Hon'ble MR.JUSTICE D.A.MEHTA ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge? : NO --------------------

The order continues below.

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