MEENABEN S SHAH vs. COMMISSIONER OF INCOME TAX

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ITR/91/1986HC GujaratGJHC24010715198619 June 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court of Gujarat, per Mr. Justice A.R. Dave and Mr. Justice D.A. Mehta, disposed of the reference. Both learned advocates for the parties submitted that the main question referred to the Court had already been decided by the Hon'ble Supreme Court in the case of Singhai Rakeshkumar Vs. Union of India and others, reported in 247 I.T.R. 150. The Supreme Court's decision was in the affirmative, meaning against the assessee and in favour of the Revenue, on the first question regarding the taxability of capital gains from agricultural land. Consequently, as the first question was answered in the affirmative, the second question was also answered in the affirmative, again against the assessee and in favour of the Revenue. The Court held that the capital gain from the sale of agricultural land is taxable under Section 45, and the assessee is not entitled to substitute the fair market value as on April 1, 1970. The reference was disposed of accordingly with no order as to costs.

What were the facts?

This case involves an Income Tax Reference filed by the assessee, Meenaben S. Shah, at the instance of the Income-tax Appellate Tribunal, Ahmedabad Bench "A". The reference concerns the taxability of capital gains arising from the sale of agricultural land. The assessee is challenging the Tribunal's decision that such capital gains are taxable under Section 45 of the Income-tax Act, 1961, and that the assessee is not entitled to substitute the fair market value as on April 1, 1970, for the purpose of calculating capital gains. The Revenue is represented by the Commissioner of Income Tax.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the capital gain arising from the sale of agricultural land was liable to tax under Section 45 of the Income-tax Act, 1961? Assessee's contention: The assessee likely argued that capital gains from agricultural land are not taxable. (Not explicitly recorded, but implied by the question). Revenue's contention: The Revenue likely argued that capital gains from agricultural land are taxable under Section 45. 2. If the reply to the above question is in the affirmative, whether the Tribunal was right in law in holding that the assessee was not entitled to substitute the fair market value as on 1/4/1970 for the reason that from that day the agricultural land was included in the definition of 'capital asset'? Assessee's contention: The assessee likely argued for the right to substitute the fair market value as on April 1, 1970, as agricultural land was included in the definition of 'capital asset' from that date. (Not explicitly recorded, but implied by the question). Revenue's contention: The Revenue likely argued against the substitution of the fair market value as on April 1, 1970.

Which sections of the Income-tax Act were involved?

Section 45,Section 256(1)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 91 of 1986

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 -------------------------------------------------------------- MEENABEN S SHAH Versus COMMISSIONER OF INCOME TAX -------------------------------------------------------------- Appearance: MR MANISH J.SHAH FOR MR J.P SHAH for Applicant. MR MR B.B.NAYAK FOR MR MANISH R BHATT for Respondent No. 1 --------------------------------------------------------------

CORAM : MR.JUSTICE A.R.DAVE and MR.JUSTICE D.A.MEHTA

Date of decision: 19/06/2001

ORAL JUDGEMENT (Per : MR.JUSTICE A.R.DAVE)

1.

At the instance of the assessee, the Income-tax Appellate Tribunal, Ahmedabad Bench "A" has referred to this Court for its opinion the following questions of law under the provisions of Section 256(1) of the Income-tax Act,1961. "Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the capital gain arising from sale of agricultural land was liable to tax u/s.45?

If the reply to the above question is in the affirmative, whether Tribunal was right in law in holding that the assessee was not entitled to substitute the fair market value as on 1/4/1970 for the reason that from that day the agricultural land was included in the definition of 'capital asset'?"

Mr.Manish Shah, learned Advocate has appeared for the applicant assessee whereas Shri B.B.Nayak, learned Advocate has appeared for the Revenue.

2.

Learned Advocates appearing for the parties have fairly submitted that the main question which has been referred to this Court has already been decided by the Hon'ble Supreme Court in the case of Singhai Rakeshkumar Vs. Union of India and others, reported in 247 I.T.R. 150. The said question has been replied in the affirmative i.e. against the assessee and in favour of the Revenue.

3.

As the first question has been replied in the affirmative, the second question is also replied in the affirmatrive i.e. against the assessee and in favour of the Revenue.

4.

This Reference stands disposed of accordingly with no order as to costs. (A.R.Dave, J) (D.A.Mehta,J

m.m.bhatt

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