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Issues:
1. Classification of property as agricultural or not. 2. Determination of capital gain amount. 3. Inclusion of capital gain in the relevant assessment year. Analysis: Issue 1: Classification of property as agricultural or not The assessee received compensation for the compulsory acquisition of land, and the Income-tax Officer calculated the capital gain based on the market value of the land. The Appellate Assistant Commissioner and the Tribunal affirmed this calculation. The assessee conceded that the property was not agricultural land. Therefore, the first question was answered against the assessee in favor of the Revenue. Issue 2: Determination of capital gain amount The second question revolved around the computation of the capital gain. The assessee argued that the Tribunal did not consider evidence showing a higher value of the property in 1954, resulting in a higher capital gain. However, the court found that the calculation was based on evidence and rejected the higher rate claimed by the assessee. The question was decided in favor of the Revenue. Issue 3: Inclusion of capital gain in the relevant assessment year The Tribunal determined that the transfer giving rise to the capital gain occurred when possession of the land was taken in 1964. The assessee contended that the date of vesting should be the date of the notification under the Land Acquisition Act, which was rejected. The capital gain was taxed in the assessment year 1965-66. The question was answered against the assessee. In conclusion, the reference was answered against the assessee, confirming that the property was not agricultural, there was a capital gain of Rs. 3,27,994, and it was rightly included in the assessment year under consideration. Each issue was decided in favor of the Revenue. The parties were directed to bear their own costs.
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