1988 (11) TMI 126

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..... CIT(A) misdirected himself in observing that the receipt from sale of trees is not includible without assigning any reasons". 2. In this case assessee by status is shown as HUF (specified) and the accounting period was the year ending31st March, 1979. Alongwith return assessee filed a statement mentioning 'assessee got Rs. 10,000 on sale of fruit trees of ancestral land. Its taxability for rate purposes may kindly be seen'. 3. The learned ITO required the assessee to furnish details of the transaction and to also state whether the trees were of spontaneous growth or otherwise. It was stated on behalf of the assessee that the land known as 'Bagh Knagoyan' was an ancestral property and the trees were not planted by him, were said to be was .....

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..... directions given by the learned IAC(C) Range-II, the capital gain is computed as under: Saleprice . Rs. 10,000 Cost price is taken at nil as the assessee did not spend anything thereon being of spontaneous growth . -- . . Rs. 10,0000 Less : Statutory deduction under s. 80-T . . under s.80-T(a): 5,000 . under s. 80T(b)(ii) @ 40 per cent of Rs. 5,000 2,000 . . 7,000 Rs. 7,000 Balance capital gain: . Rs. 3,000" 5. This issue was contested by the assessee and before the learned CIT(A) Shri Satish Kumar Goel, learned advocate argued that the assessee was the owner of 50 per cent share in ancestral properties and that spontaneous growth of trees on the said property was sold for a consideration of Rs. 10,000 and that suc .....

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..... r in the light of the ratios in the cases supra vacation of inclusion was justified or not. 8. In the case of N.T. Patwardhan the relevant facts were that a large number of trees which had grown spontaneously stood for many years on the grass lands of the area belonged to the assessee. Those trees were sold in the accounting year 1948-49. Against the inclusion in that case the Tribunal held that the receipts were merely of capital nature and thus not includible. On a reference, the Hon'ble Delhi High Court (sic) held that by the sale once for all the trees with roots, which were the assessee's assets even though he did not invest any capital in growing them, the capital structure was affected and there was a diminution in his capital asset .....

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