TMI Blog1987 (1) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... ther, on the facts and in the circumstances of the case, the income of the assessee from dividends on the shares of Bajaj Auto Ltd. and Hindustan Sugar Mills Ltd. which arose before January 1, 1971, was exempt from tax in the assessment for the assessment year 1971-72 ? " The reference is concerned with the assessment year 1971-72, the previous year for which is the year ended March 31, 1971. The assessee is a public charitable trust. It has income, inter alia, from dividends. It held 6,615 shares in Bajaj Auto Ltd. all of which had been acquired prior to April 1, 1970. It sold 1,625 shares of Bajaj Auto Ltd. in December, 1970, and realised a capital gain of Rs. 3,23,375 in consequence. In its return for the relevant assessment year, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances, the said capital gain could not be included in the total income of the assessee. Mr. Jetly, learned counsel for the Revenue, pointed out, quite rightly, that the second question should not be answered in view of the decision of the Supreme Court in CIT v. Damodaran [1980] 121 ITR 572. The only application for reference before the Tribunal was made by the Revenue and it was in regard to the first question. Although the Tribunal had decided against the assessee in regard to the subject-matter of the second question, the assessee did not seek reference in respect thereof. The situation, therefore, is squarely covered by the aforementioned decision of the Supreme Court. The Tribunal was not competent to refer the second question ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that a capital gain from the sale of the investment could not be said to arise from the investment. We find it difficult to appreciate the Tribunal's reasoning. Section 2(24) defining income, includes capital gains which are chargeable under section 45. The word " income " in section 13 must, therefore, be read as inclusive of income arising from such capital gains. Upon construction, therefore, the said capital gain from the sale of the shares of Bajaj Auto Ltd. was income to which the provisions of section 13(4) applied and, therefore, the exemption under section 11 was not available in relation to that capital gain. We find support for this construction in section 11 itself. Sub-section (1A) thereof refers to the sale of a capital ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
