1991 (10) TMI 315 - HC - Income Tax

High Court dismisses Original Petition on capital gains questions, emphasizing specificity under IT Act

Mar Thoma Rubber Co. Ltd. Versus Commissioner of Income Tax

Mar Thoma Rubber Co. Ltd. Versus Commissioner of Income Tax - [1992] 102 CTR 9 Issues:1. Exigibility to capital gains in the sale of old worn out rubber trees by the assessee for the assessment year 1978-79.2. Determination of whether the income derived from the sale of standing rubber trees is agricultural or non-agricultural income taxable under the IT Act.3. Justification of the rate fixed per tree for the sale of rubber trees.4. Applicability of previous court decisions to the current case.5. Determination of when the sale of rubber trees was completed.Analysis:The case involved a plantation company, the petitioner, owning a rubber estate, assessed for income tax, against the Revenue for the assessment year 1978-79. The main issue was the capital gains arising from the sale of old worn out rubber trees by the assessee. Initially, the Income Tax Officer (ITO) fixed the capital gain at Rs. 15,000 for the sale of 6,500 trees. The Commissioner of Income Tax (Appeals) (CIT (A)) held that there was no capital gain or loss. However, the Tribunal determined a capital gain of at least Rs. 15 per tree, resulting in a total sum of Rs. 2,27,500 for the assessment year. The Tribunal remitted the matter back to the CIT for enhancement notice, which was not done, leading to the filing of an application under section 256(1) of the IT Act to refer questions of law to the High Court.The Tribunal dismissed the petition, and the petitioner filed an Original Petition (O.P.) seeking reference of questions of law to the High Court. However, the High Court found that the questions formulated were not referable questions of law. The Court noted that the issues raised were either concluded by previous court decisions or were questions of fact. For instance, question (a) was concluded by a previous decision of the Court, while question (b) was deemed a pure question of fact. The Court also highlighted that questions (c) and (d) did not arise for consideration based on the facts of the case. Regarding question (e) on when the sale was completed, the Court emphasized that it depended on the intention of the parties, which was not evident from the materials before them.In conclusion, the High Court dismissed the Original Petition, stating that the questions raised were either not referable questions of law or were already addressed by previous court decisions. The Court emphasized the importance of formulating specific and referable questions under the IT Act for consideration.