TaxTMI 
TaxTMI 
2003 (3) TMI 65
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....nce was treated as a capital asset. The assessee preferred an appeal. The Commissioner (Appeals) had held that this amount cannot be treated to be capital gains but it was definitely an income from business and was chargeable to tax. On appeal before the learned Tribunal by the assessee, the learned Tribunal had held that it was not business income since the assessee was not carrying on business in dealing with licences. Since the Revenue did not prefer any appeal against the findings of the Commissioner (Appeals) that it was business income and not capital gains, therefore, the learned Tribunal refrained from going into the question whether it was capital gains or not and had exempted the amount from being taxed. The Revenue had sought for reference on two questions, which are as follows: "(i) Whether, on the facts and in the circumstances of the case, and on correct interpretation of section 28(iv) of the Income-tax Act, 1961, the Tribunal was justified in law in holding that the receipt of Rs 10 lakhs cannot be brought to tax as business profit? (ii) Without prejudice to question No. 1 above, whether, on the facts and in the circumstances of the case and having regard t....
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....g taxed under the said hear. Mr. J.P. Khaitan, learned counsel appearing for the assessee, on the other hand, contended that when the heads of income are specified, a particular income coming under that head has to be assessed under the relevant pro visions dealing with such head. If it cannot be charged to tax under the particular head under which it comes, it cannot be charged under another head. Unless the capital gains can be computed under section 48, it cannot be charged under the head "Capital gains" in view of section 55(2), read with section 48(ii) and section 45 of the Act. He contended that the decision in B.C. Srinivasa Setty's case [1981] 128 ITR 294 (SC) had laid down the ratio that the chargeability and computation are integral parts of each other. Unless an income chargeable under a particular head can be computed within the computation method provided therefor the same cannot be charged to tax. In the present case the cost of acquisition as defined in section 55(2) as it stood prior to its amendment (Finance Act, 1987 effective from April 1, 1988), being un assessable, it could not be computed under section 48 and, therefore, it could not be chargeable as capita....
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.... the court under section 256(2) had consciously referred question No. 2 omitting to refer to question No. 1. It is the order of reference that will determine the scope, not the statement of case. The statement of case was stated by the learned Tribunal on the basis of the order passed by this court under section 256(2). It has to be ascertained from the order of the High Court under section 256(2). The question referred should be precise and indicate the grounds on which the question of law is raised (CIT v. Scindia Steam Navigation Co. Ltd. [1961] 42 ITR 589 (SC)). Two or more questions cannot be combined and rolled up in the form of one question. Each question must be stated separately (Gopiram Govindram, In re [1936] 4 ITR 157 (Cal)). Here in this case reference upon two questions was sought for. But the High Court had refused one. The order under section 256(2) cannot be construed to mean something, which the High Court had expressly excluded from its order. The reference to "without prejudice" phrase within the frame of the question would not mean to include the first question. That apart these two questions cannot be rolled up or combined in one. These two questions are direc....
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....harged under section 28(iv) as income of business. For all these reasons, we are unable to persuade ourselves to agree with the contention of Mr. Saha, who, in reply, relied on the decision in Jeewanlal (1929) Ltd. v. CIT [1983] 139 ITR 865 (Cal). The said decision deals with an income received in the course of business, namely, that the assessee therein was carrying on business in exporting aluminium goods. A scheme was formulated under which the exporters became entitled to import certain goods. Thus, on account of carrying on business of export, the assessee had earned the entitlement to import certain goods. Therefore, it was a result or outcome of the export business carried on by the assessee and thus the income received was a result of the carrying on of the business or outcome of the same business. On the facts, the present case is distinguishable, as we have already discussed the acquisition of the licence was not dependent on the carrying on of the business by the assessee. Now it is to be seen whether it could be brought under the head of capital gains. Admittedly, the licence cannot be described to be something other than a capital asset. Section 2(14) defines "ca....
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....e subject of the charge. This is clear from the general arrangement of the provisions in the Act. The charging provision is accompanied by a set of provisions for computing the income subject to charge under each head of income. In each case, the character of the computation provisions bears a relationship to the nature of the charge. The charging Section and the computation provisions together constitute an integrated code. The computation device provided in section 48 contemplates that an asset is something in the acquisition of which it is possible to envisage a cost. It hints at the nature and character of the asset. Such asset must possess the inherent quality of being available on the expenditure of money to a person seeking to acquire it. Section 49 provides for determining the cost of acquisition of assets without the payment of money for the purpose of computation under section 48. Section 48 is concerned with an asset capable of acquisition at a cost. None of the provisions pertaining to the head "Capital gains" suggests that they include an asset in the acquisition of which no cost at all can be conceived. In the acquisition of an asset in which no cost element can be id....