1989 (5) TMI 16

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....the transfer of the immovable property at 13, Kapalitola Lane, in determining total income for the accounting period relevant to the assessment year 1971-72 ?" The facts shortly stated are that, according to the Income-tax Officer, the assessee-firm was, at one time, the owner of the building at premises No. 13, Kapalitola Lane, Calcutta, together with land admeasuring 15 cottahs and 12 chittaks. The said property was acquired by the Government of West Bengal for the accommodation of the Calcutta Police, vide notification under section 4 of the Land Acquisition Act of 1894 and notification under section 6 of the said Act dated June 6, 1970. The Second Land Acquisition Collector, Calcutta, vide award dated February 4, 1971, determined the....

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.... Rs. Rs. Capital gains as deducted above 9,13,290 Less : Statutory deduction 5,000 45% of the balance, i.e., Rs. 9,08,290 4,08,730 ---------------- 4,13,730 ----------------- 4,99,560. " ----------------- Aggrieved by the said order of the Income-tax Officer, the assessee brought the matter by way of appeal before the Appellate Assistant Commissioner. As on the date fixed for hearing of the appeal none appeared for the assessee, the Appellate Assistant Commissioner upheld the order of the Income-tax Officer determining the taxable capital gain at Rs. 4,99,560 by observing as under : "In the grounds of appeal, the appellant has challenged the very basis of assessment by stating that no compensation was paid t....

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....ted February 4, 1971. Since the decision and the decree by the Land Acquisition Judge, First Court., Alipore, 24-Parganas, was not declared and made in the year under consideration, the higher compensation of Rs. 9,60,950 never accrued to the assessee in the year under consideration. Under section 45, the capital gains arising from the transfer of a capital asset is charged to tax in the previous year in which the asset is transferred. In the case of compulsory acquisition, the crucial date for the purpose of ascertaining the year of chargeability is the date on which the relevant notification of acquisition is published. Where the transfer of a capital asset is by way of compulsory acquisition under any law, the capital gains has to be ....

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.... This might not be feasible in most cases because the claim for additional compensation usually gets settled after many years when the statutory period of limitation for reopening the earlier computation of capital gains would have expired. With a view to removing this difficulty, the Finance Act, 1978, has inserted a new sub-section (7A) in section 155 of the Act with retrospective effect from April 1, 1974, to enable recomputation of capital gains in cases where transfer of the capital asset is by way of compulsory acquisition and the compensation for such transfer is enhanced or further enhanced by a court, Tribunal or other authority. This confirms the intention of Parliament that it is immaterial when the additional compensation is awa....