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Issues Involved:
1. Whether the acquired land is agricultural land and thus exempt from capital gains tax. 2. The validity of oral gifts claimed by the assessee. 3. The correct assessment year for taxing the capital gains. 4. Whether the acquisition proceedings were barred by limitation. Detailed Analysis: 1. Agricultural Land Exemption: The assessee contended that the acquired land was agricultural and thus exempt from capital gains tax, citing the Bombay High Court's decision in Health Colonies & Constructions (P.) Ltd v. A. C Chandra. The Tribunal noted that the land was classified as arable in the Gazette notification, but no agricultural operations were carried on, no land revenue was paid, and the land was not used for agriculture since 1970 due to acquisition proceedings. The Tribunal found that the land was within 8 km of Kurnool Municipality, making it a capital asset per the Supreme Court's decision in G.M. Omer Khan v. CIT. Thus, the compensation received was subject to capital gains tax. 2. Validity of Oral Gifts: The assessee claimed that he made oral gifts of the land to various relatives, which should exclude the corresponding compensation from his taxable income. The ITO did not accept these oral gifts due to lack of evidence. The AAC accepted the oral gift to the assessee's wife but included her compensation in the assessee's income under section 64(1)(iv) of the Income-tax Act. The Tribunal upheld the AAC's decision, rejecting the other oral gifts for lack of substantiation. 3. Correct Assessment Year: The assessee argued that the capital gains should be assessed in the year 1977-78, not 1978-79. The Tribunal noted that the original order dated 30-11-1993 was recalled, and thus no amendment could be made to it. The compensation was received on 30-7-1977, within the accounting year ending 31-3-1978, making the assessment year 1978-79 appropriate. The Tribunal rejected the plea for reassessment in 1977-78, citing the Full Bench decision in CIT v. Begum Noor Banu Alladin. 4. Limitation of Acquisition Proceedings: The assessee contended that the acquisition proceedings commenced on 15-12-1970, making the assessment barred by limitation. The Tribunal noted that the initial notification was quashed by the High Court, and fresh proceedings began with a new notification on 11-9-1975. The Tribunal ruled that the acquisition date should be based on the fresh notification and subsequent award proceedings, rejecting the limitation argument. Conclusion: The Tribunal upheld the order of the first appellate authority, rejecting all contentions of the assessee. The appeal was dismissed, confirming the capital gains tax assessment for the year 1978-79.
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