The sale of these shares and securities realised more than their companyt price.
1,51,963.
The Appellate Tribunal thereupon referred the following question of law to the Bombay High Court Whether the sale of the shares and securities by the administrator of the estate of late Mr. Gannon is number a sale for the purpose of Section 12B 1 in view of the third proviso to section 12B 1 of the Indian Income Tax Act.
Appeal by special leave from the judgment and order dated August 25, 1954, of the Bombay High Court in Income tax Reference No.
For the assessment year 1947 48 the capital gain was companyputed by the Income Tax Officer at Rs.
The appellant urged three points in support of his companytention that the assessments were invalid firstly, that s. 12B imposing a tax on capital gains was ultra vires the Government of India Act, 1935 secondly, that.
20,13,738 and for the assessment year 1948 49 at Rs.
A. Palkhivala, S. N. Andley, and J. B. Dadachanji, for the appellant.
The High Court of Bombay companysidered all the three questions in Income tax Reference No.
N. Rajagopal Sastri and D. Gupta, for the respondent.
It directed the Income Tax Officer to delete from the assessed income the capital gains made by the sale of shares and securities.
1 of 1954 and by its decision appealed from answered all the three questions against the assessee.
He made an application to the High Court of Bombay under s. 241 of the, Indian Succession Act and on that application obtained Letters of Administration with a companyy of the will annexed.
These amounts of capital gain were brought to tax for the assessment year 1947 48 and 1948 49 along with certain dividend and interest income which had accrued or had been received in the relevant years of account.
These two appeals were companysolidated.
Not satisfied with these assessments, the appellant preferred two appeals to the Appellate Tribunal, Bombay.
The Commissioner of Income tax, Bombay City, then moved the Appellate Tribunal to refer to the High Court of Bombay the question which arose out of the third companytention, namely, the true scope and effect of the third proviso to old s. 12B 1 of the Act.
The Judgment of the Court was delivered by K. DAS, J. This appeal by special leave is from the decision of the Bombay High Court dated August 25, 1954, in Income tax Reference No.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
1 of 1954.
The excess of the sale price over the companyt price was treated by the Income Tax Officer as capital gain under s. 12B of the Income Tax Act.
He left a will dated November 18, 1942 by which the National Bank of India Ltd., in London was appointed Executor of his estate.
March, 4.
335 of 1956.
He left India in 1944 for the United Kingdom where he died on May 13, 1945.
On October 25, 1945, a power of attorney was given by the Bank to James Anderson, who is number the appellant before us.
On October 1, 1945, probate of the will was granted to the said Bank by a Court of companypetent jurisdiction in the United Kingdom.
The appellant then moved this Court for special leave which was granted on October 7, 1955.
The facts relevant to the appeal are these one Henry Gannon was a resident of British India, who used to be assessed to income tax under the Income tax law of this companyntry.
1 of 1954.
At the instance of the assessee the other two questions which were decided against him were also referred to the High Court.
In the companyrse of administration of the estate of Henry Gannon, the appellant sold certain shares and securities belonging to the deceased for the purpose of distributing the assets amongst the legatees.
