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TMI Blog1968 (10) TMI 23X X X X Extracts X X X X X X X X Extracts X X X X ..... il 29,1944, under clauses (d) and (g) of section 5 of the Indian Electricity Act, as it then stood before its amendment by Central Act 32 of 1959, the assessee was intimated that the Government of Bombay had elected to purchase the undertaking and called upon the assessee to sell it to the Government at a price to be determined under clause (b) of section 5 of the Act and to hand over possession on May 1, 1944. When the assessee neglected to hand over possession, the Government of Bombay, by a further order made on May 3, 1944, under the Defence of India Rules, directed the assessee to hand over possession to a certain Mr. Raghavan, and Mr. Raghavan, who was an engineer of the Bombay state and who was authorised to take possession, took de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed from that view taken by the Income-tax Officer and so, that part of the assessment which related to capital gains was set aside. The further appeal preferred by the Income-tax Officer to the Appellate Tribunal was dismissed. The question of law referred to this court under section 66(2) of the Act reads: " Whether, on the facts and in the circumstances of the case, the sum of Rs. 2,32,520 is not liable to tax under section 12B of the Indian Income-tax Act, 1922, for the assessment year 1961-62 ? It is indisputable that if there was a sale of the undertaking on May 3, 1944, when possession was delivered, and not on July 15, 1960, when the arbitrator determined the amount of compensation, there was no capital gain which could be taxed u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Bombay Government on April 29, 1944, when the assessee was directed to sell the undertaking to it at a price which had to be determined as provided by clause (b). It would be recalled that possession was delivered by the assessee to the Bombay Government on May 3, 1944, and, according to the statement of the case submitted to us, the Government of Bombay, after taking over possession, dismantled the installation and parts of the machinery. The Appellate Assistant Commissioner was right in taking the view that in that situation the sale did not stand postponed until there was the determination by the arbitrator of the price payable by the Bombay Government. His conclusion that there was a sale on May 3, 1944, could be supported on at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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