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TMI Blog2003 (1) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... gains arising in the transaction was assessable for the assessment year 1986-87? - (2) Whether the Tribunal was right in holding that the agricultural land in Thrikkakara Panchayat qualified as capital asset for the assessment year 1986-87 even though Thrikkakara is not appearing in the second notification No. 9447/F issued on January 6, 1994?" - Questions Nos. 1 and 2 are answered in the positive and in favour of the Revenue and against the assessee. - ncome Tax Reference No. 34 of 1999 - - - Dated:- 21-1-2003 - Judge(s) : S. SANKARASUBBAN., KUMARI. A. LEKSHMIKUTTY. JUDGMENT The judgment of the court was delivered by S. SANKARASUBBAN J.-This reference is at the instance of the assessee. The year in question is 1986-87. The facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty were rightly brought to tax for the assessment year 1986-87, whereas according to the assessee, they were assessable for the assessment year 1987-88. The Tribunal took the view that the transfer took place in the year ending on March 31, 1986. Another contention raised before the Tribunal is that since the notification including the Thrikkakara was cancelled in 1994, the compensation cannot be included as capital gains. Thus, the appeal was dismissed by the Tribunal. On the basis of the above fact, the following substantial questions of law are raised by the Tribunal: "(1) Whether the Tribunal was right in holding that the transfer of the property under the Land Acquisition Act had taken place in the year ending March 31, 1986, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, 1985, and published on April 29, 1985. The enquiry under section 9 of the Land Acquisition Act was conducted on July 17, 1985, after giving due notice to the parties. Possession was taken on January 29, 1985. The compensation was paid on April 1, 1986. It is seen that under the award interest was given for the additional compensation from January 29, 1985, to May 14, 1986. The first question to be considered is whether the Tribunal was right in holding that the transfer took place in the year 1986. Section 2(47) defines "transfer" in relation to a "capital asset" as including compulsory acquisition under any law. Section 2(14) of the above Act defines "capital asset". Regarding agricultural land, the definition says that it does not in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the land, which shall thereupon vest absolutely in the Government, free from all encumbrances. Thus, in the ordinary mode of acquisition, possession is taken after the award is passed. After the award is passed, the land vests in the Government. But so far as the present case is concerned, the acquisition is under the urgency clause. We have to find out whether there is difference in the vesting of land when acquisition is made as per the urgency clause. In the case of the urgency clause, a common notification under sections 4 and 17 is issued. Thereafter notice under section 9 is issued. Section 17 says that in cases of urgency whenever the appropriate Government for the District Collector so directs, the Collector, though no such awar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e for capital gains in the notification dated February 6, 1973. In that notification, in item 22, against the Municipality of Cochin, the following areas are notified for the purposes of section 2(14): "Areas covered by Thrikkakara, Tripunithura and Kalamassery Panchayats". Thus the area is treated as capital assets for the purpose of section 2(14). Here, the assessment year is 1985-86. This notification was in existence on that day and hence, the assessee was liable to be taxed. On January 6, 1994, the Central Government issued another notification in supersession of the notification of the Government of India in the erstwhile Ministry of Finance (Department of Revenue and Insurance), dated February 6, 1973. In that notification in item 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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