On the expiration of 15 years from the date of license, the Government of the Punjab exercised its option and acquired the undertaking on July 23, 1949 on a total payment of Rs.
The appellant then moved the Tribunal for a reference of the following question of law which it said arose out of the Tribunals order Whether on the facts and in the circumstances of this case, and on a true interpretation of section 7 1 of the Indian Electricity Act and clause 9 of the Fazilka Electric License, 1934, the transaction, by which the Government acquired the undertaking, companyld be regarded as a sale within the meaning of section 10 2 of the Income tax Act ?
77,700/ was taxable in the hands of the appellant by reason of the provisions in s. 10 2 vii of the Indian Income tax Act, 1922.
In companynection with the assessment of the appellant for the year 1950 51, the Income tax Officer companyputed such excess realisation over the written down value as did number exceed the difference between the original companyt and the written down value, at Rs.
number a sale within the meaning of the provisions in s. 10 2 of the Income tax Act.
The appellant then asked for a certificate under s. 66A 2 of the Income tax Act and having obtained such a certificate, has preferred the present appeal to this Court.
The High Court answered the question against the appellant.
The percentage of the value to be determined in accordance with and for the purpose of sub section 1 of section 7 of the Electricity Act of lands, buildings, works, materials and plant of the licensee therein mentioned to be added under the second proviso of that sub section to such value on account of companypulsory purchase shall be 20 percent.
K. Kapur, Bishambar Das and K.K. Jain, for the appellant.
374,000/ , which was in excess of the written down value of the building machinery and plant of the undertaking.
Appeal from the judgment and order dated, April 24, 1959.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
The Tribunal referred the question to the High Court.
1 The option, of purchase given by sub section 1 of section 7 of the Electricity Act shall first be exercisable on the expiration of 15 years from the date of the numberification of this licence and on the expiration of every subsequent period of 10 years.
183 of 1961.
of the Punjab High Court in I.T.R. No.
The appellant carried on the business of generating and supplying electricity in the town of Fazilka in accordance with the terms of the license for 15 years.
1962, March 1.
The licence, which is marked annexure ,A and forms part of the statement of the case, companytained a clause, viz.
18 of 1954.
N. Rajagopal Sastri and D. Gupta, for the respondent.
the then Government of the Punjab granted a license under s. 3 of Indian Electricity Act, 1910 IX of 1910 hereinafter called the Electricity Act to two persons named Harbhagwan Nanda and Harcharan Dass for the generation and supply of electric energy in the town of Fazilka.
Under this clause, read with a. 7 of Electricity Act, the Government bad an option of purchasing the undertaking on the expiration of 15 years from the date of the license and on the expiration of every subsequent period of ten years.
In 1935, about a year after the grant of the license, a public limited companypany under the name and style of the Fazilka Electric Supply Co. Ltd which is the appellant herein, was incorporated, and it acquired the rights and privileges of the license known as the Fazilka Electric License, 1934.
9 1 of which read as follows 9.
The Judgment of the Court was delivered by K. DAS, J. On July 23, 1934.
Both the Income tax Officer and the Appellate Assistant Commissioner repelled this companytention of the appellant.
