Commissioner Of Income-Tax vs Mrs. Indira K.P. Singh
2000 Latest Caselaw 504 Del

JUDGMENT

Ariit Pasayat, C.J.

1. At the instance of the Revenue a reference has been made under section 256(1) of the Income-tax Act, 1961 (for short "the Act"). The Income-tax Appellate Tribunal, Delhi Bench "D" (in short the "Tribunal"), has referred the following questions for the opinion of this court : "1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that section 52(2) was not applicable to the facts of the case of the present assessee in computing the capital gains from the sale of shares ?

2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the sum of Rs. 19,982 was not taxable as the business income of the assessee from dealings in land ?

3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the sum of Rs. 19,982 was not chargeable to tax even as capital gains ?"

So far as the first question is concerned, in view of the positive finding of fact that the assessee did not receive any amount in excess of the amount indicated in the sale deeds, the decision of the apex court in K.P. Varghese v. ITO [1981] 131 ITR 597 will be applicable. The answer, therefore, has to be in the affirmative, in favour of the assessee and against the Revenue.

4. So far as question No. 2 is concerned, an identical issue came up for consideration before this court in the case of CIT v. Raghuvendra Singh (I.T.C. No. 198 of 1982). The decision of the Tribunal holding that the amount in question was not taxable as capital gains (?) was upheld and the Department's special leave petition was also dismissed by order dated December 11, 1989. Following the ratio of the said case, we hold that the Tribunal was right in its view. The question is, accordingly, answered in favour of the assessee and against the Revenue.

5. As regards question No. 3, in view of the Explanation to section 2(1A) inserted by the Finance Act, 1989, with retrospective effect from April 1, 1970, the question has to be answered in favour of the Revenue and against the assessee.

6. The reference is, accordingly, disposed of.