TMI Blog1991 (1) TMI 221X X X X Extracts X X X X X X X X Extracts X X X X ..... property. The Enemy Property Act of Pakistan does not provide for any compensation for the properties that vested with Pakistan. However, the Government of India announced compensation for properties, movable and immovable, belonging to Indian nationals and lost to Pakistan in the said hostilities, pursuant to which the assessee claimed compensation in respect of the said shares. The Government of India in March, 1972 awarded the assessee a compensation of Rs. 5,04,584. 4. The book value of the said shares aggregated Rs. 15,33,450. Deducting the compensation of Rs. 5,04,584 received from the Government of India from the said book value, the assessee worked out the capital loss at Rs. 10,28,866. 5. In the year of account ending on 30th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e further fact that the assessee-company had, on 8th Nov., 1965, lodged a claim for reimbursement of the market value of the shares as on 30th June, 1965, which, according to the assessee, aggregated Rs. 19.2 lakhs. The assessee responded by filing a return of income disclosing the income that was determined in the regular assessment. Its case before the ITO was that there was no failure on its part to disclose fully and truly all the relevant particulars and that, consequently, the recourse to s. 147(a) of the Act cannot be validly taken. 9. The said argument of the assessee did not find favour with the ITO. According to him, "the assessee's claim of loss for this year (asst. yr. 1973-74) was its omission/failure to disclose fully and tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee's letter dt. 19th Aug., 1974 under cover of which the return of income was filed. Such loss was also disclosed in the return of income. (ii) The printed balance sheet as on 30th June, 1972, a copy of which was given to the ITO also adverted to the factum of the assessee's having received compensation of Rs. 5,04,584 from the Government of India. In this regard the CIT(A) referred to and relied upon the Supreme Court decisions in the cases of Calcutta Discount Co. Ltd. vs. ITO (1961) 41 ITR 191 (SC) and CIT vs. Dinesh Chandra H. Shah Ors. (1971) 82 ITR 367 (SC). 14. On merits also the CIT(A) held that the capital loss accrued or arose only on the payment by the Government of India of the compensation amount of Rs. 5,04,884 in Mar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rose only in the year of account ending on 30th June, 1966 (being the previous year relating to asst. yr. 1967-68). In this regard he referred to and relied upon the following reported cases: Dollar Co. vs. CIT (1977) 107 ITR 280 (Mad); M. Ranganath Sastri vs. CIT/CWT (1979) 119 ITR 488 (Mad) and Smt. Jeejabhai Shinde vs. CIT (1983) 33 CTR (MP) 241 : (1983) 144 ITR 693 (MP). 18. Shri Tilakchand next contended that the assets having vested in the Custodian of Enemy Property of Pakistan in the previous year relevant to the asst. yr. 1967-68, the ITO was justified in taking recourse to s. 147(a) so as to withdraw the benefit of carry forward of capital loss of Rs. 10,28,866 wrongly allowed to the assessee for the asst. yr. 1973-74. In this r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies. The ITO assumed that the property vested in the Custodian of Enemy Property of Pakistan immediately on the outbreak of the hostilities. However, the ITO has not spelt out the basis on which he came to the said conclusion. Neither the reasons recorded by the ITO for the purpose of taking recourse to s. 147(a) nor the reassessment order make any reference whatsoever to the various provisions of the Enemy Property Act of Pakistan. It may here be mentioned that the three cases referred to and relied upon by Shri Tilakchand in support of his contention that the assets in question vested in the Custodian of Enemy Property of Pakistan in 1965, were all decided with reference to the provisions of the Land Acquisition Act and consequently they ..... X X X X Extracts X X X X X X X X Extracts X X X X
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