Capital gains on rubber trees: valuation follows binding precedent, while taxability is determined in favour of the assessee.

For capital gains on a rubber estate, the valuation of rubber trees had to follow the court's earlier precedent on the same subject; the Tribunal's method was accepted only to the extent permitted by that ruling, so the valuation issue was decided against the assessee. On taxability, the court applied the binding decision on rubber trees as capital assets and held that capital gains could not be levied as contended by the Revenue, so this issue was decided in favour of the assessee. The reference was therefore answered partly for the Revenue and partly for the assessee.

---

---

Issues: (i) Whether the method and manner of valuation of rubber trees adopted for computation of capital gains was legally and factually correct; (ii) Whether income-tax on capital gains was exigible on the trees comprised in the rubber estate sold.

Issue (i): Whether the method and manner of valuation of rubber trees adopted for computation of capital gains was legally and factually correct.

Analysis: The valuation question was answered by applying the court's earlier decision on the same subject, under which the Tribunal's approach to valuing the rubber trees for capital gains purposes was accepted only to the extent indicated by that ruling.

Conclusion: The question was answered in the negative, in favour of the Revenue and against the assessee.

Issue (ii): Whether income-tax on capital gains was exigible on the trees comprised in the rubber estate sold.

Analysis: Following the earlier binding decision on the taxability of such trees, the court held that the capital gains issue had to be answered in the assessee's favour.

Conclusion: The question was answered in the negative, in favour of the assessee and against the Revenue.

Final Conclusion: The reference was answered partly in favour of the Revenue and partly in favour of the assessee, with no order as to costs.

Ratio Decidendi: For capital gains purposes, the valuation and taxability of rubber trees in a sold estate must be determined in accordance with the binding precedent governing such trees as capital assets.

---