TaxTMI 
TaxTMI 
2008 (4) TMI 221
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.... For the accounting period ending 31.3.1971 assessment was completed on a total income of Rs.12,800/- vide order dated 12/15.2.1982 under Section 143(3) of the Income Tax Act (hereinafter referred to as the 'Act'). The assessee owned certain land which were in possession of S.A. Jain College, Ambala City, under some lease agreement for the period from 1.1.1947 to 31.8.1967. The lease was to expire on 31.8.1967. The College moved the Punjab Govt. for compulsorily acquisition of these lands through Education Deptt. of the Punjab Government. The notification u/s 4 of the Land Acquisition Act, 1894 was issued on 15.5.1968 and the notification u/s 6 of the same Act was issued on 13.8.1969. The notice u/s 9 of the Land Acquisition Act inviting claims to compensation was issued sometime thereafter and the award was announced on 29.9.1970. In the meanwhile i.e. from the date of expiry of the lease i.e. 31.8.1967 to the date of the award i.e. 29.9.70 the land continued to be in the possession of the College. However, it is not clear whether the possession continued with the College, with or without the consent of the appellant. 3. While framing the original assessment order, ....
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....icer also came to the conclusion that the award having been made on 29.9.1970 and the same date being the date of transfer of actual physical possession, the capital gains were rightly assessable for the year under consideration. The said assessment order was challenged by the assessee. However, after a detailed discussion, the Commissioner of Income Tax (Appeals) agreed with the conclusion of the Assessing Officer that the date of taking actual physical possession was 29.9.1970 and the capital gains were taxable for the year under consideration and the appeal filed by the assessee was dismissed. 5. The assessee filed further appeal before the Tribunal and it was argued on behalf of the assessee that the possession of land was taken on 15.5.1968, consequent upon the notification made by the State Govt. and therefore, the transaction was unrelated to the year under consideration. On the other hand, the representative of the Department supported the orders of the lower Authorities and argued that the actual date of possession was the date of award i.e. 29.9.1970 and the transaction did take place during the year under consideration and therefore, capital gains were correctly taxed....
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....ounsel that it was a case of emergent acquisition of land and the possession of land was taken on 15.5.1968, therefore in view of the provisions contained in Section 17 of the Land Acquisition Act, 1894, the transfer took place on 15.5.1968 and thus, the Appellate Assistant Commissioner exceeded his jurisdiction in taxing capital gains for the year under consideration on the basis of the date of award made by the Land Acquisition Officer under Section 11 of the Land Acquisition Act. 10. We have heard learned counsel for the parties and perused the record. 11. Undisputedly, the assessee owned certain lands which were in possession of S.A. Jain College, Ambala City under a lease w.e.f. 1.1.1947 to 31.8.1967. The land was being used as a playground. After the expiry of lease period the said college remained in possession of the land. Thus, as a consequence of the acquisition proceedings, only symbolic possession was to be taken as the physical possession was already with the College. There are two sections of the Land Acquisition Act which deal with the taking of the possession by the Govt. of the compulsorily acquired properties. These sections are Sec. 16 and Sec.17 of the Lan....
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.... also useful to refer to the provisions of Section 16 of the Land Acquisition Act, 1894 which are as under:- "16. Power to take possession- When the Collector has made an award under Section 11, he may take possession of the land, which shall thereupon vest absolutely in the Government, free from all encumbrances." It is crystal clear from the above mentioned provisions that the Collector may take possession of the land after an award has been made under Section 11 of the Land Acquisition Act and thereupon the land shall vest absolutely in the Government, free from all encumbrances. In view of the above factual and legal position, it is crystal clear that the date of taking of possession of the land in the present case for the purpose of assessment of capital gains has to be taken from the date of award which is 29.9.1970 on which date the land in dispute vested in the Government under Section 16 of the land Acquisition Act, 1894. 13. It is also relevant to refer to the provisions of Section 45(1) of the Income Tax Act at the relevant time which are reproduced as under:-"45(1) Any Profits or gains arising from the transfer of capital asset effected in the previous year sha....