TaxTMI 
TaxTMI 
1983 (8) TMI 92
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....land and realised some surplus therefrom. The case of the assessee was that the capital gains arising out of the sale of agricultural land was exempt from tax. Hence, the assessee did not return any income from capital gains. In the course of the assessment proceedings, it was contended by the assessee that the amendment made to the Act charging capital gains arising from the transfer of agricultural land was ultra vires the Constitution, and, so, such capital gains could not be charged to income-tax. The ITO observed in the assessment order, dated 18-9-1978, as follows : " The assessee's contention challenging the amendment cannot be accepted and the capital gains arising out of the transfer will be subjected to tax as capital gains. Ho....
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.... following letter dated 16-10-1981 : " Kindly refer to your letter dated 19-9-1981 in respect of assessment year 1975-76. The question of exemption of capital gains tax has been decided by the High Court in Misc. Petition Nos. 1132 of 1973 and 214 & 215 of 1974 in the case of S/Shri Manubhai A. Sheth, M.A. Sheth and Jitendra A. Sheth, respectively. As per the order of the Bombay High Court, fresh assessment is to be made after excluding from the total income the profit or gains made on the sale of land mentioned in the said petition. The order of the High Court has not been accepted by the department and appeal against the said order has been filed in the Supreme Court on 24-10-1980. You are not a party to the petition in que....
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...., section 154 of the IT Act, 1961, is not attracted to the case." The Commissioner (Appeals) found force in the above argument. Following the aforesaid decision of the Allahabad High Court, she allowed the appeal of the assessee. 7. Shri G. Krishnan, the learned representative for the department, urged before us that the Commissioner (Appeals) erred in her decision. He urged that the facts of Omega Sports & Radio Works' case were different as that case was concerned with the question as to whether there was a change in the constitution of the firm, or a succession of the business. Further, he urged that the Allahabad High Court was dealing with a matter under the Income-tax Act. On the other hand, the Bombay High Court in the case of ....
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....n assessment order. According to him, the promise to rectify the order was implied in the assessment order already extracted above. 10. Apart from the above, Shri S.E. Dastur contended that the decision of the Bombay High Court in the case of Manubhai A. Sheth was binding on the ITO sitting at Bombay, and so, it was no longer open to him to entertain any doubt whatsoever on the issue in the face of a clear and categorical decision of the Bombay High Court on the said issue. He relied on the decision in the case of Omega Sports & Radio Works in support of his contention. He pointed out that the facts therein might be different but the principle decided therein applies squarely to the facts of this case. The said principle has already been....