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Commissioner of Income-tax Vs. R. Dalmia - Court Judgment

LegalCrystal Citation
Subject Direct Taxation
CourtDelhi High Court
Decided On
Case NumberIncome-tax References Nos. 41 to 44 of 1977
Judge
Reported in[1987]163ITR517(Delhi)
ActsIncome Tax Act, 1961 - Section2(14)
AppellantCommissioner of Income-tax
RespondentR. Dalmia
Excerpt:
- .....under the agreements to sell dated may 21, 1955, and august 31, 1959, was not a proprietary right and the assessed not being the owner, no capital asset was created for the assessed by virtue of those agreements and consequently no capital gain accrued to the assessed ?' 2. at the hearing, it was brought to our notice that all these three questions are covered by the previous decisions of this court. as far as question no. 1 is concerned, it is covered by the decision dated 2nd november, 1983, in itr nos. 189 and 190 of 1975 (cit v. r. dalmia : [1987]163itr519(delhi) ). the answer to the question was that the overall financial position had to be considered with reference to the balance-sheet as adjusted in respect of the sum of rs. 47.31 lakhs. the same is the position for the.....
Judgment:

D.K. Kapur, J.

1. The statement of case for these four references sets out four questions but later on states that the fourth question was not being referred. The result is that there are three questions referred to us which are as follows :

'1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in accepting the assessed's claim of adjustments to the balance-sheet dated February 20, 1961, by reference to a sum of Rs. 47.31 lakhs and on that basis directing the Income-tax Officer to allow the necessary relief to the assessed for the assessment years 1965-66 and l966-67 by adopting course No. (ii) pointed out by it in its order for the assessment year 1962-63 in I.T.A. Nos. 3204 and 6050 of 1968-69

2. Whether, on the facts and in the circumstances of the case, the Tribunal erred in law in treating the municipal valuation of Rs. 8,583 and Rs 8,283 as the annual letting value in respect of the properties situated at No. 3, Sikandra Road and 9 Mansingh Road, New Delhi, for the assessment years 1965-66 and 1966-67

3. Whether, on the facts and in the circumstances of the case, the Tribunal erred in holding that the right acquired by the assessed under the agreements to sell dated May 21, 1955, and August 31, 1959, was not a proprietary right and the assessed not being the owner, no capital asset was created for the assessed by virtue of those agreements and consequently no capital gain accrued to the assessed ?'

2. At the hearing, it was brought to our notice that all these three questions are covered by the previous decisions of this court. As far as question No. 1 is concerned, it is covered by the decision dated 2nd November, 1983, in ITR Nos. 189 and 190 of 1975 (CIT v. R. Dalmia : [1987]163ITR519(Delhi) ). The answer to the question was that the overall financial position had to be considered with reference to the balance-sheet as adjusted in respect of the sum of Rs. 47.31 lakhs. The same is the position for the first question in the present case because the sum of Rs. 47.31 lakhs has to be adjusted. So the answer to the first question is in the affirmative, in favor of the assessed and against the Department. As far as question No. 2 is concerned, it has been dealt with in several decisions of this court. They are : ITR No. 6 of 1974 decided on 18th December, l981 (CIT v. R. Dalmia : [1987]163ITR524(Delhi) ); ITR No. 103 of 1974 decided on 16th December, 1981 (CIT v. R. Dalmia : [1987]163ITR525(Delhi) and ITR Nos. 189 and 190 of 1975 decided on 2nd November, l983 (CIT v. R. Dalmia : [1987]163ITR519(Delhi) ). The answers have been in the negative, in favor of the assessed and against the Department with the result that the municipal value has to be taken as the annual letting value.

3. As far as question No. 3 is concerned, it has been dealt with in another judgment of this court in CIT v. J. Dalmia : [1984]149ITR215(Delhi) . In accordance with that judgment, the right acquired by the assessed under the agreements to sell dated May 21, 1955, and August 31, 1959, has to be held to be not a proprietary right and hence the same was not a capital asset. Consequently, no capital gain could accrue. The result is that this question is also answered in the negative, in labour of the assessed and against the Department.

4. As all the questions are covered by direct decisions, there will be no order as to costs.


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