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TMI Blog1989 (2) TMI 162X X X X Extracts X X X X X X X X Extracts X X X X ..... the Government for Defence Services some time in 1940s. Thereafter, the property was in possession of the Defence Services and was used as a parade ground. There is no dispute that after the Defence authorities have taken over the lands, no agricultural operations were carried out. 2. In 1973, the Government acquired these lands under the Requisition and Acquisition of the Immovable Properties Act, 1952. After the acquisition an Arbitrator was appointed who gave his award on 11-3-81. 3. In the original assessment proceedings, no capital gains was shown butt in the reassessment proceedings the assessee admitted capital gains in part III of the return. It was submitted in the course of the assessment proceedings that the land was agricul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions were going on at that time in the land. The possession was given to the Defence Authorities under a Statutory order passed under the Requisition and Acquisition of Immovable Properties Act. The assessee was helpless under those circumstances. He could not therefore carry on the agricultural operations. What the Defence authorities had done is not relevant in determining the character of the land vis-a-vis the assessee. For this purpose, he cited the decision of this Bench in the case of Papalal v. ITO [1982] 31 CTR (Trib.) 7. The Departmental Representative submitted that on identical facts another Bench of the Tribunal has held in favour of the department and he cited the decision of Hyderabad 'A' Bench in Ramesh Chandra Palnitkar [IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pose was whether the lands were agricultural lands on the date of acquisition. At bottom of page 158 their Lordships observed "in our opinion, however, it is unnecessary to go into the question whether these lands were agricultural lands on the date of acquisition, because, even if we agree with the assessees that they were agricultural lands on the date of acquisition, it would still not avail the assessee/s for the following reasons : The lands concerned herein are situated either within the municipal limits or within 8 KMs of the local limits of the Hyderabad Municipal Corporation. Therefore, they fall within the exception to exception, introduced by the Finance Act, 1970. In other words, these lands constitute "capital assets", even tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... down that the Parliament has no powers to treat agricultural land in which cultivation is carried on as capital asset. Assuming such a provision is valid, then only we need consider the earlier decision in Bolla Ramaiah's case. 8. Once a binding High Court holds that a provision is ultra vires of the Parliament, all inferior Tribunals have to give effect to the decision and assume without anything further that the offending provision is not in the Statute Book at all. Therefore, we have to follow only the decision of J. Raghottama Reddy's case in this case. 9. Even in J. Raghottama Reddy's case the High Court has held that the exemption will be available only if agricultural operations are carried on. It is necessary to find out whether ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itkar, the facts were totally different. In that case, 35 acres of land was in possession of the Military authorities since 1963. Two years later, in 1965 the assessee purchased these lands. These lands were acquired in 1970. The assessee claimed that the lands were agricultural and therefore could not be subjected to capital gains. The Tribunal pointed out that when the lands acquired by the assessees, they were already in possession of the Military authorities and was being used for purpose other than agriculture. It is on these facts, that they denied the claim for exemption. It would be noticed that the assessee came into the picture only after the Military authorities have taken possession of the land. There was therefore no antecede ..... X X X X Extracts X X X X X X X X Extracts X X X X
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