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2007 (11) TMI 603 - HC - Income TaxCapital gain - acquisition of land - Determining the assessment year - exigible to tax - HELD THAT:- Till the assessment year 1984-85, the assessee was required to invest the capital gain in the specified securities, like capital gain bonds issued from time to time or in a residential house under the various provisions of the Income-tax Act, 1961, from section 54 onwards within the time specified therein as computed from the date of transfer. It is obvious that in order to invest the money in the specified items, the assessee must first receive the money. Therefore, accepting the contention of the department would mean depriving the assessee of those benefits or tax relief in all cases where section 17 of the Land Acquisition Act, 1894, has been applied. The only case which deals with the situation where section 17 of the Land Acquisition Act, 1894 has been invoked in Nawab Mahmood Jung Bahadur’s case [1987 (11) TMI 61 - ANDHRA PRADESH HIGH COURT]. Apparently, in that case, the possession of the land was taken on 12-1-1967 and because section 17 had been invoked, therefore, the award was given on 2-11-1970. The revenue wanted to tax the capital gain in the assessment year 1973-74. This plea was turned down and the questions were answered in favour of the assessee. The said decision does not take into account the aforementioned consequences. Therefore, we are unable to agree with the view taken by the Andhra Pradesh High Court. We, therefore, hold that for the assessment year 1984-85, that is before the 1991 amendment was made, the ITAT was justified in holding that no capital gain is exigible to tax in assessment year 1984-85 on the facts and circumstances of the case. The application of the department under section 256(2) is, accordingly, dismissed.
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