TMI Blog1978 (3) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... e value of the route permits in respect of the route, Kangeyanalloor to Krisharasampattu was Rs. 5,000 and Minnal Railway Station to Tiruttani was Rs. 17,500, thus making a total of Rs. 22,500. This amount of Rs. 22,500 was sought to be brought to tax as capital gain in respect of the assessment year 1967-68. The contention of the assessee was that the route permit is not property and in any case since there was no cost of acquisition, the amount realised by the sale of it could not be subjected to tax as capital gains. Both these contentions were rejected by the ITO as well as the AAC And the Tribunal. At the instance of the assessee, the following question has been referred : " Whether, on the facts and in the circumstances of the case, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessee that the route permit was not property. The Tribunal rejected the contention of the assessee that there was no cost of acquisition of the permits and that, therefore, the amount realised by the sale of it would not be subjected to tax as capital gains. The Tribunal observed that this is not a self-generating asset, and that, though the cost incurred by the assessee in securing it may be negligible, nevertheless some cost must have been incurred in the process of acquiring the property. In the absence of any material to show as to what was the cost of acquisition, the Tribunal held that the entirety of Rs. 22,500 would be liable to tax as capital gains. The learned counsel for the assessee contended, relying on the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal, we are afraid, is not correct. The Tribunal ought to have given a finding as to what was the cost of acquisition on the basis of the evidence available. Only if it comes to the conclusion that there was some cost incurred for the acquisition, the question of capital gains could arise at all. In the absence of such a finding we are unable to answer this reference. But we direct the Tribunal to go into the question as to whether there was any cost for the acquisition at all, and if so, what was the amount that was spent for the acquisition of this asset. If there was no cost of acquisition, the principle of Rathnam Nadar's case [1969] 71 ITR 433 (Mad) would have to be applied. With these observations the question referred to us is return ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
