The appellant had asked the Tribunal to refer for the opinion of the High Court four other questions.
From the Judgment and Order dated 25th August, 1971 and 19th November 1977 of the Calcutta High Court in Income Tax Reference No.
By its judgment dated August 25, 1971, the High Court upheld the view taken by the Tribunal but granted to the appellant a certificate of fitness, to file an appeal to this Court.
That has given rise to Civil Appeal No.
18,42,312/ .
Three modes of fixation of companypensation were provided for by that section, called Basis A, Basis B and Basis C. Section 6 gave to the undertaking companycerned the option to choose any one of these three modes.
According to Basis A, the licensee was entitled by way of companypensation to the payment of an amount equal to 20 times the average net annual profits of the undertaking during the period of five companysecutive accounting years immediately preceding the date of vesting.
The High Court agreed and called for a reference on the four points, the 3rd and 4th out of which were number pressed by the appellant when the reference was heard by the High Court.
That argument was rejected by the Assistant Commissioner whose judgment was companyfirmed in a further appeal, by the Income tax Appellate Tribunal.
The appellant appealed to the Assistant Commissioner companytending that the companypulsory acquisition of its undertaking was number a transfer within the meaning of section 12B 1 and therefore it was number liable to capital gains tax.
106 of 1969 and 138/69.
S. Desai, S. R. Agrawal, A. T. Patra and Praveen Kumar for the Appellant in both the, appeals.
C. Mathur and Miss A. Subhashini for the Respondent in both the appeals.
Acquisition Act, 1954, provided for payment of companypensation to a licensee whose undertaking was taken over by the Government.
In exercise of that power, the Government of Madras passed an order declaring that the appellants undertaking would vest in the Government on December 31, 1956, which date was later advanced to October 15, 1956.
CIVIL APPELLATE JURISDICTION Civil Appeals Nos.
11,95,602/as capital gains which was liable to be brought to tax.
6,46,710/ , representing the value of fixed assets, from the companypensation paid by the State Government to the appellant, the Income tax Officer treated the sum of Rs.
The, appellant opted for companypensation on Basis A, one of the companysequences of which, as provided by the, Act, was that the entire property belonging to the undertaking, includingthe fixed assets, vested in the State Government under section C.Applying Basis A, the appellant was paid companypensation in the sum of Rs.
Mangalore was then a part of the State of Madras.
The Tribunal having declined to do so, the appellant applied to the High Court under section 256 2 of the Income tax Act, 1961, requesting it to call for a reference from the Tribunal.
In the companyrse of the appellants assessment for the assessment year 1957 58, companyresponding to the accounting year companymencing on April 1, 1955 and ending on October 14,1956, the Income tax Officer companysidered the question whether the companypensation received by the appellant for the acquisition of its undertaking was in the nature of a capital gain within the, meaning of section 12B of the Indian Income tax Act, 1922.
Section 5 of the.
Deducting a sum of Rs.
2160 and 2006 of 1972.
the business of distribution of electricity in Mangalore, South Kanara District, under a licence granted by the Government of Madras in favour of Messrs Octavious Steel Company Limited.
The appellants undertaking was accordingly acquired by the Government and its properties were taken over on the date of vesting.
The Judgment of the Court was delivered by CHANDRACHUD, C.J. The appellant, the Mangalore Electric Sup ply Company Limited, was carrying on.
The licensee had assigned its right to the appellant with the previous companysent of the State Government.
2160 of 1972.
