JAGRUTIBEN S SHAH vs. COMMISSIONER OF INCOME TAX

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ITR/93/1986HC GujaratGJHC24010717198619 June 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the questions of law referred to it 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. Consequently, the first question, concerning the taxability of capital gains from the sale of agricultural land under Section 45, was answered in the affirmative, meaning in favour of the Revenue and against the assessee. As the first question was answered in the affirmative, the second question, regarding the entitlement to substitute the fair market value as on 1/4/1970, was also answered in the affirmative, again in favour of the Revenue and against the assessee. The Tribunal's findings on both issues were thus upheld. 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, Jagrutiben 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 assessment years are not specified. The core issue revolves around whether capital gains from the sale of agricultural land are taxable under Section 45 of the Income-tax Act, 1961, and if so, whether the assessee could substitute the fair market value as of April 1, 1970, for the purpose of calculating capital gains, given that agricultural land was included in the definition of 'capital asset' from that date. The matter was referred to the High Court for its opinion on these questions of law.

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? (Question of law) 2. If the reply to the first 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'? (Question of mixed law and fact) Assessee's Contention: The assessee, through their learned advocate, submitted that the questions referred to the High Court had already been decided by the Supreme Court in the case of Singhai Rakeshkumar Vs. Union of India and others, reported in 247 I.T.R. 150. Revenue's Contention: The Revenue, through their learned advocate, also acknowledged that the Supreme Court decision in Singhai Rakeshkumar Vs. Union of India and others was applicable.

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 93 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 -------------------------------------------------------------- JAGRUTIBEN S SHAH Versus COMMISSIONER OF INCOME TAX -------------------------------------------------------------- Appearance: MR MANISH J.SHAH FOR MR JP SHAH for Applicant. 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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