NAURATA RAM KARTA OF HUF V. CIT,LUDHIANA ETC.

ITA/1/1999

AI Insights

The case involves an appeal by Naurata Ram Karta against the Commissioner of Income Tax, Ludhiana, concerning the taxability of capital gains on compensation received for land acquisition. The appellant argued that the capital gains should not be taxed in the assessment year 1993-94 as the compensation was received in the previous year relevant to the assessment year 1991-92 and was disclosed in the tax return for that year. However, the revenue contended that the appellant had placed the compensation amount in the Capital Gains Scheme, 1988, and failed to purchase agricultural land within the two-year period required by Section 54-B of the Act, making the amount exigible to tax in 1993-94. The court agreed with the revenue's position, dismissing the appeal.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 670483 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 24-10-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: SAVITA SAXENA
• Assessee Lawyers: AALOK MITTAL
• Keywords: Assessment Year; Capital Gains; Compensation; Jurisdiction; Taxability
• Section: 54-B; 45(5)(b)

Judgement Text

"ITA No.1 of 1999 -: 1 :- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.1 of 1999 Date of decision: October 24, 2013. Naurata Ram Karta dead (through LRs) ... Appellant v. Commissioner of Income Tax, Ludhiana and another ... Respondent CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Shri Aalok Mittal, Advocate, for the appellant. Ms. Savita Saxena, Advocate for the respondents. Rajive Bhalla , J. (Oral): The appellant, challenges order dated 29.10.1998 passed by the Income Tax Appellate Tribunal, dismissing his appeal with respect to assessment year 1993-94. Counsel for the appellant, in essence, submits that as compensation was received in the previous year relevant to the assessment year 1991-92 was duly disclosed in the return of income and was considered by the Assessing Officer, in assessment year 1991- 92, the Assessing Officer while considering the appellant's income in assessment year 1993-94, had no jurisdiction to impose tax on capital gains by construing that compensation had been received in the year previous to the assessment year 1993-94. Counsel for the appellant Kadyan Vinod Kumar 2013.11.07 11:59 I attest to the accuracy and integrity of this document Chandigarh ITA No.1 of 1999 -: 2 :- refers to Section 45(5)(b) of the Income Tax Act, 1961 (in short the Act), in support of his argument that as capital gain is payable in the year of receipt and, as admittedly, compensation was received in the previous year relevant to the assessment year 1991-92, the Assessing Officer, exercising power in the year 1993-94, had no jurisdiction to levy tax on this capital gain. Counsel for the revenue submits that the questions of law framed by counsel for the appellant do not arise for adjudication as the appellant had placed the amount of compensation received, in the Capital Gains Scheme, 1988 and by virtue of Section 54-B of the Act, was required to purchase agricultural land within two years of receipt of compensation. The appellant having failed to purchase agricultural land within two years, the amount became exigible to capital gains tax in the year 1993-94. The orders passed by the Assessing Officer, Commissioner of Income Tax (Appeals), duly affirmed by the Income Tax Appellate Tribunal, therefore, do not call for any interference. We have heard counsel for the parties, perused the impugned orders and have no hesitation in holding that no question of law much less the substantial questions of law, framed by counsel for the appellant, arises for adjudication. Admittedly, the appellant received Rs.16,40,160/- as enhanced compensation and interest, for acquisition of his agricultural land in the previous year relevant to 1991-92. It is not denied that the appellant placed this amount in an Kadyan Vinod Kumar 2013.11.07 11:59 I attest to the accuracy and integrity of this document Chandigarh ITA No.1 of 1999 -: 3 :- account in accordance with provisions of Capital Gains Scheme, 1988., thereby postponing the taxability of the amount for a period of two years during which, as provided by Section 54-B of the Act the appellant was required to purchase agricultural land, failing which he would be liable to pay capital gains tax. Admittedly, the appellant did not purchase agricultural land within the period prescribed by Section 54-B of the Act. We, therefore, find no error in the order passed by the Assessing Officer imposing tax on capital gains. The orders passed by the Commissioner of Income Tax (Appeals) as well as the Income Tax Appellate Tribunal, affirming the course adopted by the Assessing Officer, also do not suffer from any error of jurisdiction or law, much less do they give rise to any question of law. In view of what has been held herein-above, the appeal is dismissed. [ Rajive Bhalla ] Judge [Dr. Bharat Bhushan Parsoon] October 24, 2013. Judge kadyan Kadyan Vinod Kumar 2013.11.07 11:59 I attest to the accuracy and integrity of this document Chandigarh "