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L. Rajeshwar Pershad Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtPunjab and Haryana High Court
Decided On
Case NumberIncome-tax Reference No. 92 of 1977
Judge
Reported in(1986)52CTR(P& H)305; [1986]159ITR920(P& H)
ActsIncome Tax Act, 1961 - Sections 2(14) and 4
AppellantL. Rajeshwar Pershad
RespondentCommissioner of Income-tax
Appellant Advocate B.S. Gupta, Adv.
Respondent Advocate Ashok Bhan and; Ajay Mittal, Advs.
Cases ReferredKarimtharuvi Tea Estate Ltd. v. State of Kerala
Excerpt:
.....the said case (headnote): now, it is well-settled that the income-tax act, as it stands amended on the first day of april of any financial year must apply to the assessments of that year......amended on the first day of april of any financial year must apply to the assessments of that year. any amendments in the act which come into force after the first day of april of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amendments come into force.'8. in the present case, the amendment came into force on april 1, 1973, and, therefore, since the capital gain on the sale of jewellery/ornaments was made liable to tax, the tribunal was right in affirming the decision of the officers below in levying the tax.9. it was sought to be argued by mr. balwant singh gupta that in certain amendments, it is specifically provided as to for which assessment yearsthe same would be applicable and since it is not mentioned in.....
Judgment:

G.C. Mital, J.

1. If an amendment in the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), is brought into effect from the 1st of April, of a particular financial year, 'whether that amendment would apply to the assessment for that year' is the question of law which we are called upon to determine in this reference,

2. During the year 1972-73 which ended on March 31, 1973, L. Rajeshwar Pershad (hereinafter called 'the assessee') sold ornaments/jewellery for Rs. 56,500. According to the assessee, no capital gain accrued on the sale of jewellery. However, the Income-tax Officer did not agree with the stand of the assessee and since the amendment contained in Section 2(14)(ii) of the Act came into effect on April 1, 1973, it was held that in the assessment year 1973-74, because of the amended provision, capital gains tax was leviable on the sale of jewellery. After allowing necessary deductions, etc., the net capital gain was determined at Rs. 24,550.

3. Feeling aggrieved from the aforesaid order, the matter was taken up in appeal before the Appellate Assistant Commissioner where also the assessee remained unsuccessful.

4. Further appeal to the Tribunal also met with the same fate (copy annexure 'D').

5. In deciding the point of law, the Tribunal placed reliance on the decision of the highest court in Karimtharuvi Tea Estate Ltd. v. State of Kerala : [1966]60ITR262(SC) .

6. On application under Section 256(1) of the Act, the Tribunal has referred the following question for opinion to this court:

'Whether, on the facts and in the circumstances of the case and in view of the amendment of Section 2(14)(ii) of the Income-tax Act, 1961, with effect from April 1, 1973, the Tribunal was justified in law in holding that income from capital gains on sale of jewellery was taxable for the assessment year 1973-74 ?'

7. After hearing the learned counsel for the parties and on a reading of Karimtharuvi Tea Estate Ltd. v. State of Kerala : [1966]60ITR262(SC) , we find that the decision of the Tribunal is correct and the question deserves to be answered in the affirmative, i.e., in favour of the Revenue. The highest court has held as follows in the said case (headnote):

'Now, it is well-settled that the Income-tax Act, as it stands amended on the first day of April of any financial year must apply to the assessments of that year. Any amendments in the Act which come into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment is actually made after the amendments come into force.'

8. In the present case, the amendment came into force on April 1, 1973, and, therefore, since the capital gain on the sale of jewellery/ornaments was made liable to tax, the Tribunal was right in affirming the decision of the officers below in levying the tax.

9. It was sought to be argued by Mr. Balwant Singh Gupta that in certain amendments, it is specifically provided as to for which assessment yearsthe same would be applicable and since it is not mentioned in the amendment in question that it would apply to the assessment year 1973-74, the amendment would take effect only in the subsequent year, i.e., 1974-75. Different phraseologies are employed while making amendments but whenever amendments are made with effect from the first day of April of any financial year, according to the dictum of the Supreme Court in the aforesaid case, the amendment would apply to the assessments to be made for that year and that is what the Tribunal has held and we are in agreement with that.

10. For the reasons recorded above, we answer the proposed question in the affirmative, i.e., in favour of the Revenue and against the assessee. The parties are left to bear their own costs.


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