TMI Blog1989 (2) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... ned in section 2(14) of the Income-tax Act, 1961 (for short "the Act"), by virtue of the amendment brought on April 1, 1970. The Income-tax Officer did not agree with the assessee and held that the cost price as on January 1, 1954, had to be considered and not as on February 28, 1970. This he did in view of section 55 (2) of the Act. On appeal, the Appellate Assistant Commissioner agreed with the assessee and found the price fixed by him to be reasonable. The Incometax Appellate Tribunal, Chandigarh, agreed with the appellate order and dismissed the appeal filed by the Revenue. At the instance of the Revenue, the Tribunal has referred the following question for opinion : "Whether the Appellate Tribunal has been right in law in holding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessment year in question, has become necessary: "Section 55(2)-For the purposes of sections 48 and 49, 'cost of acquisition', in relation to a capital asset,- (i) where the capital asset became the property of the assessee before the 1 St day of January, 1954, means the cost of acquisition of the asset to the assessee or the fair market value of the asset on the 1 St day of January, 1954, at the option of the assessee ; (ii) where the capital asset became the property of the assessee by any of the modes specified in sub-section (1) of section 49, and the capital asset became the property of the previous owner before the lst day of January, 1954, means the cost of the capital asset to the previous owner or the fair market valu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubjected to capital gains tax but by virtue of the same Finance Act, clause (viii) was inserted in section 47 of the Act to the following effect : "47. Nothing contained in section 45 shall apply to the following transfers : - . . . (viii) any transfer of agricultural land in India effected before the 1st day of March, 1970. That is why all transfers made of agricultural land of the kind which come within the ambit of capital asset, if made on or after March 1, 1970, would attract the provisions of section 45 of the Act, the charging section, and for working out the capital gains, provisions of sections 46 to 55A of the Act would become applicable. Therefore, in calculating capital gains, reference will have to be made to section 55 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owing decisions Manubhai A Sheth v. N. D. Nirgudkar, 2nd ITO [1981] 128 ITR 87 (Bom) and J. Raghottama Reddy v. ITO [1988] 169 ITR 174 (AP). Counsel for the Revenue in reply submitted that the question of legislative competence, that is, of the vires of the statute, cannot be gone into in reference proceedings and, for that matter, the assessee has to challenge the provisions under article 226 of the Constitution of India and for this he has relied upon our decision in Income-tax Reference No. 31 of 1981 (CIT v. Ved Parkash, decided on January 1, 1989 [1989] 178 ITR 332). In the alternative, it is argued that the three High Courts in the following judgments have dissented from the decision of the Bombay High Court in Manubhai A. Sheth's ..... X X X X Extracts X X X X X X X X Extracts X X X X
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