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of <h1>Court rules no capital gains due to void land sale under Gujarat Vacant Lands Act</h1> <h3>Commissioner Of Income-Tax Versus Vithalbhai P. Patel</h3> The court ruled in favor of the assessee, determining that no capital gains accrued due to a declared void sale of land under the Gujarat Vacant Lands ... Capital Gains Issues involved: The issue involves determining whether capital gains accrued to the assessee due to a declared void sale of land under the Gujarat Vacant Lands in Urban Areas (Prohibition of Alienation) Act, 1972.Summary:Facts and Circumstances: The assessee filed a return claiming capital gains on the sale of land partitioned on January 5, 1972. The Income-tax Officer added the long-term capital gain to the assessee's income from the sale of 105 plots. The Appellate Assistant Commissioner declared the sale null and void under the Gujarat Vacant Lands Act, 1972, as it contravened the prohibition of alienation in vacant areas. The Tribunal upheld the decision, stating that no capital gains arose from a void transaction.Legal Analysis: The Gujarat Vacant Lands Act, 1972, prohibits alienation of land in vacant areas, declaring any such transaction null and void. The Collector's order on March 29, 1975, declared the sale transaction void ab initio, unchallenged by the assessee. As there was no valid sale in the eyes of the law, no capital gains could arise from the transfer. The Tribunal correctly concluded that no capital gains accrued to the assessee due to the declared void transaction.Conclusion: The court answered the referred question affirmatively against the Revenue, disposing of the reference with no order as to costs.
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