Transfer of land, excise duty computation and double taxation credit under income tax law are analysed with competing views.

Transfer of land was treated as completed in the relevant assessment year where the agreement, possession letter, purchaser's conduct and commencement of construction showed handing over of effective control and possession, bringing the transaction within section 2(47)(v) and (vi) read with section 53A; later execution of sale deeds did not shift the year of chargeability. For section 80HHC computation, excise duty was held not to form part of total turnover and was excluded. The discussion also addresses credit for tax already paid on the same capital gain in later years, with one view allowing such credit to prevent double taxation and a dissent questioning the Tribunal's power to grant that direction absent an appeal or cross-objection.

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Issues: (i) Whether the transfer of the land was completed in the relevant assessment year so as to attract capital gains under section 2(47)(v) and 2(47)(vi) of the Income-tax Act, 1961 read with section 53A of the Transfer of Property Act, 1882. (ii) Whether excise duty was liable to be excluded from total turnover while computing deduction under section 80HHC of the Income-tax Act, 1961. (iii) Whether, after holding the capital gain taxable in the year under appeal, credit had to be given for tax already paid on the same capital gain in subsequent assessment years.

Issue (i): Whether the transfer of the land was completed in the relevant assessment year so as to attract capital gains under section 2(47)(v) and 2(47)(vi) of the Income-tax Act, 1961 read with section 53A of the Transfer of Property Act, 1882.

Analysis: The agreement, possession letter evidence, subsequent conduct of the purchaser, and the commencement of construction were treated as showing that complete control and possession had been handed over in the relevant financial year. On that footing, the transaction fell within the statutory concept of transfer, and the later execution of sale deeds in instalments did not alter the year of chargeability. The plea that possession had not been handed over was rejected.

Conclusion: The capital gain was taxable in the year under appeal and the Revenue succeeded on this issue.

Issue (ii): Whether excise duty was liable to be excluded from total turnover while computing deduction under section 80HHC of the Income-tax Act, 1961.

Analysis: The deduction under section 80HHC was treated as an export incentive provision, and turnover was construed as commercial turnover arising from sales. Excise duty was held not to form part of turnover for this purpose, following the governing Supreme Court precedent.

Conclusion: Excise duty was to be excluded from total turnover and the assessee succeeded on this issue.

Issue (iii): Whether, after holding the capital gain taxable in the year under appeal, credit had to be given for tax already paid on the same capital gain in subsequent assessment years.

Analysis: The alternative plea was treated as a plea against double taxation of the same income, not as an attempt to enlarge jurisdiction or reopen a separate assessment. The Tribunal held that granting credit for taxes already paid was necessary to give effect to the correct taxation of the very same income in the proper year.

Conclusion: Credit for taxes already paid on the same capital gain had to be allowed, and the assessee succeeded on this issue.

Final Conclusion: The appeal was allowed in part on the capital-gains year-of-taxability issue, while relief was sustained for the assessee on the excise-duty computation issue and on the grant of credit for taxes already paid on the same income.

Dissenting Opinion: The Judicial Member rejected the alternative plea for credit of taxes paid in later years, holding that the Tribunal could not issue such a direction in the absence of an appeal or cross-objection by the assessee and that the analogy of earlier authority on jurisdictional limits applied.

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