TMI Blog1992 (1) TMI 150X X X X Extracts X X X X X X X X Extracts X X X X ..... ting ground No. 3 wherein it was contended before him that the cost of acquisition of agriculture land for the purposes of alleged capital gains should have been taken as on 1-4-1970 when the agriculture lands have been alleged to have become capital assets within the meaning of section 2(14) of the Income-tax Act. 3. That the CIT (Appeals) was totally unjustified in confirming the order of the Income-tax Officer in assessing the compensation received by the sons of the assessee in the hands of assessee's HUF. 4. That the learned CIT (Appeals) should have completely allowed deduction under section 54B of the IT Act, 1961 and inevitable delay of 4 months made towards reinvestment of sale consideration should have been condoned. 5. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entered by the assessee in its accounts immediately but later, on Sept. 30, 1961, the assessee made entries in its accounts debiting amount of Rs. 44,480 and crediting a corresponding amount. Similar entries were made-debit and credit of Rs. 30,000. The assessee utilised the goods in the manufacture and the finished products were sold by it and the sale proceeds were credited to the trading account. The credit entries were treated as two gifts and later on transferred to capital reserve account and corresponding amounts debited to trading account. The question for determination was as to whether the sum of Rs. 74,448 (44,448+30,000) representing the value of raw materials and semi-finished needles received by the assessee free of cost could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is that compensation which is paid to him in terms of his lands acquired and the revenue records is the best evidence for that. We as such do hold that compensation in lieu of lands acquired of his--Shri Pala Singh's, is the compensation received by the assessee and is assessable in his hands and none else. 6. Coming to assessee's ground No. 4, the Hon'ble Supreme Court of India in the case of Mrs. Khorshed Shapoor Chenai v. ACED [1980] 122 ITR 21 has held that where lands are compulsorily acquired under the Land Acquisition Act, there are no two rights, one a right to receive compensation and the other a right to receive extra or further compensation : the claimant has only one right which is to receive compensation for the lands at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iving at a reasonable and proper value of the property and the assessing authority will have to estimate the value having regard to the peculiar nature of the property, its marketability and the surrounding circumstances including the risk or hazard of litigation looming large on the relevant date. 8. In view of the above ratio of the Hon'ble Supreme Court, it has to be held that section 54B of the Act has to be reckoned from the dates when compensation is paid and till the time the finality is attached to the proceedings for acquisition of the land, since the end of litigation is the relevant date when it can be safely said that transfer of land is complete. The Id. lower authorities, as such, are directed to examine the claim of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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