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TMI Blog1997 (12) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural land. The assessee took up the matter in appeal. The CIT (Appeals) held that the capital gains arising on the transfer of the land used for agricultural purposes constitutes income within the meaning of section 2(14) and so it was rightly brought to tax. Another contention before the CIT (Appeals) was that the capital gains, if at all taxable, was to be assessed for the assessment year 1987-88 and not for the assessment year 1986-87. The CIT (Appeals) did not agree, on the view that the land was taken over by the Government on 14-5-1985 invoking the urgency provisions in the Land Acquisition Act. As regards the deduction under section 54F, before the CIT (Appeals) the assessee's claim was for deduction of Rs. 6,96,000. But the Assessing Officer had allowed deduction for a total sum of Rs. 6,53,000. The appellate authority found that the deduction allowed by the Assessing Officer was reasonable. In regard to the relief under section 54F also, the CIT (Appeals) found no reason to interfere with the finding of the Assessing Officer. Thus, the appeal was dismissed by the CIT (Appeals). Aggrieved with the order of the first appellate authority the assessee has filed this app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kuruvilla pointed out that such a notice was issued on 1-7-1985 and so after the expiry of 15 days the land vested with the Government. It was submitted that the Assessing Officer was thus justified in bringing to tax the capital gains in the assessment year 1986-87. The learned Departmental Representative urged us to uphold the decision of the CIT (Appeals) confirming the assessment of the capital gains. 5. The paper book filed before us by the assessee's counsel contains the following documents: (i) Award No. 66/86 in Form No. 9. (ii) Note to award No. 66/86. (iii) Notice in Form 8B dated 1-7-1985. (iv) Government Notification No. 2332/J/2/85/IND dated 24-4-1985. From the Note to Award (Annexure-II in the paper book) it can be seen that the Government has passed an order in GO Ms. 202/84/Ind dated 17-9-1984 according sanction to invoke urgency provisions under the Land Acquisition Act in respect of this acquisition and to dispense with the enquiry under section 5 of the Kerala Land Acquisition Act. Accordingly the notification under the Kerala Land Acquisition Act had been published in the local newspapers on 3-10-1984 and 7-10-1984. Consequent to the amendment of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition) to receive orders for acquiring the said property. Further, the Government also directs that the Collector may take possession of the property within 15 days of publication of the notice under section 9(1) of the said Act." In para 2 of the Notification it is clearly stated that the Government accorded sanction to invoke the urgency provisions of the L.A. Act. In the Note to Award dated 31-3-1986 also it is made clear that the acquisition was in accordance with the sanction given by the Government for invoking the urgency provisions under the L.A. Act. In the light of these evidences it cannot be said that the acquisition of the property was not made under the urgency provisions in section 17. 7. We may now refer to section 17 of the L.A. Act, which reads as under: "Special powers in cases of urgency. - (1) In cases of urgency whenever the appropriate Government so directs, the Collector, though no such award has been made, may on the expiration of fifteen days from the publication of the declaration mentioned in section 9, sub-section (1) take possession of any land needed for a public purpose. Such land shall thereupon vest absolutely in the Government free from a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rection under section 17(1) to take possession of the land. In the case before us, we have already seen that the Government had by the Notification dated 24-4-1985 accorded sanction to invoke the urgency provision of section 17 and directed the Collector to take possession of the property after 15 days of publication of the notice under section 9(1). Thus, on facts, the decision is distinguishable. 9. In the case of Fruit Vegetable Merchants Union v. Delhi Improvement Trust AIR 1957 SC 344, the Supreme Court considered the meaning of the word 'vest' appearing in sections 16 and 17 of the Land Acquisition Act. In that connection, the Supreme Court observed as under: "On the other hand, sections 16 and 17 of the Land Acquisition Act (Act 1 of 1894) provide that the property so acquired, upon the happening of certain events, shall 'vest absolutely in the Government free from all encumbrances'. In the cases contemplated by sections 16 and 17, the property acquired becomes the property of Government without any conditions or limitations either as to title or possession. The Legislature has made it clear that the vesting of the property is not for any limited purpose or limited dur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the assessee, which was taken over by the Government was agricultural land. Shri Nair submitted that agricultural land would not fall within the meaning of capital asset in section 2(14) of the Income-tax Act, unless situate in an area within the jurisdiction of a Municipality etc. as provided in section 2(14)(iii)(a) or (b). The land in dispute is situate in Thrikkakara South Village of Kanayannur Taluk. Shri Nair stated that it does not come within the jurisdiction of any Municipality etc. as mentioned in sub-clause (a) above. Hence to fall within the meaning of capital asset, the agricultural land, should be in a notified area as provided in sub-clause (b). Shri Kochunni Nair admitted that in the notification issued by the Central Government on 6th Feb. 1973 No. S.O. 77(E), in item 22, areas covered by Trikkakara were included for the purpose of section 2(14) of the IT Act. He pointed out that in the subsequent Notification No. 9447/F issued on 6th January 1994 (item 12), Trikkakara was not included as a notified area in the State of Kerala. It was his contention that though originally Trikkakara was included in the earlier notification, that notification was later superseded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ferred to the effect of repeal as appearing in section 6 of the General Clauses Act and submitted that the provisions of section 6 of the General Clauses Act would ordinarily apply in the absence of a special saving clause in the repealing statute. Great stress was laid on the fact that in the second notification dated 6-1-1994 there was no special saving clause introduced to 'save' Thrikkakara, which was therein the earlier notification. The learned counsel summarised his contentions by stating that as per the earlier notification agricultural land in Panchayat was a capital asset and the capital gains arising on transfer of such land was assessable for the assessment years prior to 1994, but after issue of the second notification on 6-1-1994, agricultural land in Thrikkakara Panchayat was not a 'capital asset' and the gain arising on its transfer was not liable to tax not only for the assessment years after 6-1-1994, but also for the earlier assessment years, provided that the assessment for the earlier years was still pending in appeal. In the present case, as the appeal was still pending, the assessee would be entitled to the benefit in the absence of any special saving clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inuation of assessment proceedings, it would not be correct to say that the assessment made for the assessment year 1986-87 in the light of the notification applicable for that year would automatically become nullified after the passing of the second notification, even though it had no retrospective operation. Arguing on the above lines, the learned Departmental Representative urged us to uphold the assessment of the capital gains for the assessment year 1986-87 which had been made in view of the Notification dated 6-2-1973, applicable at the relevant time. 13. We have given due consideration to the submissions on both sides. It is not disputed by the learned counsel for the assessee that at the time when the land was acquired by the Government, it was a 'capital asset' within the meaning of section 2(14), on account of the fact that it was agricultural land situate in notified area, i.e., Thrikkakara Panchayat, as per the Notification dated 6-2-1973. In that Notification in item 22, against the Municipality of Cochin, the following areas are notified for the purpose of section 2(14): "Areas covered by Thrikkakara, Tripunithura and Kalamasery Panchayats." The capital gains a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at 67 it was held with reference to Bihar Coal Control Order that the scope of section 6 is limited to repeal of enactments and regulations, but not to repeal of a State statute. It is also clear that when there is no repeal section 6 would have no operation. In the present case there is nothing to show that the second notification issued on 6th January, 1994 has repealed the earlier Notification, though it is issued in supersession of the earlier one. There is an essential distinction between an Act or order which is repealed and one which is superseded. In Nand Kishore v. Emperor AIR 1945 Oudh 214 it was observed as follows: - "The effect of an Act or order which is superseded is not to obliterate it altogether. An Act or order is said to be superseded when a later enactment or order effects the same purpose as an earlier one by repetition of its terms or otherwise." In the case of R.S. Anand Behari Lal v. United Provinces Government AIR 1955 NUC (All.) 2769 the Allahabad High Court held that in case of supersession of a notification, the obligations and liabilities accrued and incurred under the earlier notification remain unaffected, since the subsequent notification will b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the proceeding taken in view of the Notification dated 6-2-1973 does not cease to be valid in law, after the issue of the Notification on 6-1-1994, as there is nothing in the second Notification to show that it had retrospective operation. In the circumstances of this case, the contentions raised by the assessee against the validity of the assessment of capital gains are rejected and the assessment is upheld. 16. In the grounds of appeal the assessee has also disputed the relief allowed under section 54F and under section 54B of the Act on the capital gains brought to tax in the assessment. There is also another ground to the effect that the CIT (Appeals) ought to have considered the value of land as on 1-4-1974 for fixing the cost of acquisition. No arguments were raised before us in support of these grounds. Further, from the assessment order we notice that the cost of acquisition as on 1-4-1974 only was considered, even though by mistake in the computation the date as 1-1-1964 was shown. In the absence of any arguments raised by the learned counsel in support of these grounds, we find no reason to interfere with the decision given by the CIT (Appeals). These grounds are th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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