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Issues:
1. Determination of the date of transfer of property for assessing capital gains. 2. Interpretation of relevant provisions of the Punjab Development of Damaged Areas Act, 1951 and the Income-tax Act, 1961. 3. Consideration of legal precedents regarding the definition of 'transfer' in the context of property acquisition. Detailed Analysis: Issue 1: The primary issue in this case was to determine the date of transfer of property for assessing capital gains. The appellant argued that the transfer occurred on the date of delivery of possession, i.e., 21-4-1971, as per the provisions of the Punjab Act. The appellant contended that the owner lost rights upon delivery of possession, not upon the payment of compensation. The respondent, however, argued that the quantification of compensation was the determining factor for transfer. The Tribunal analyzed the provisions of the Punjab Act, emphasizing that possession vesting in the Improvement Trust marked the transfer of property, irrespective of compensation payment dates. Issue 2: The Tribunal delved into the provisions of the Punjab Development of Damaged Areas Act, 1951, to ascertain the legal framework governing the transfer of property in question. Sections 6(2), 11, and 13 of the Act were crucial in establishing that possession delivery led to the absolute vesting of the land in the Improvement Trust. The Tribunal highlighted that the transfer was not contingent on compensation payment, as clarified by the Act's provisions. This analysis was pivotal in determining the date of transfer for tax assessment purposes. Issue 3: Legal precedents, including the case of K.P. Varghese v. ITO and Alapati Venkataramiah v. CIT, were cited by both parties to support their arguments on the definition of 'transfer' in property transactions. The Tribunal distinguished these cases based on the specific circumstances of compulsory acquisition under the Punjab Act. The Tribunal also referenced a decision of the Andhra Pradesh High Court in Vittal Reddy v. CIT to emphasize the importance of context-specific assessments in determining tax liabilities arising from property acquisitions. These legal precedents aided in clarifying the concept of 'transfer' in the present case. In conclusion, the Tribunal accepted the appellant's argument regarding the date of transfer of property, ruling that it occurred on the date of possession delivery as per the Punjab Act. The Tribunal held that the compensation payment date was not determinative of the transfer date for assessing capital gains. Consequently, the Tribunal allowed the appeal, canceling the tax liability imposed by the Revenue authorities on the capital gains amount. The decision on this issue rendered the consideration of the market value on a specific date unnecessary, leading to the success of the appeal solely on the grounds related to the transfer date determination.
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