ENGLISH ELECTRIC CO. LTD. Versus COMTHISSIONER OF 4NCOME-TAX

ORDER

1. This appeal is against the High Court's order rejecting the application made under section 256(2) of the Income Tax Act, 1961 to call for a reference on the following question of law, namely: ‑‑‑

2. "Whether, on the facts and in the circumstances of the case, the Income‑tax Appellate Tribunal was right in law in upholding the order of the Commissioner of Income‑tax (Appeals) directing the Income‑tax Officer to exclude the capital gains arising from the transfer of agricultural lands from the assessment?

3. 'The High Court rejected the application of the decisions in Manubhai A. Sheth v. N.D. Nirgudkar, Second I.T.O. (1981) 128 ITR 87 (Bom.) and J. Raghottama Reddy v. I.T.O. (1988) 169 ITR 174 (AP). However, an Explanation has been inserted in clause (1 A) of section 2 of the income‑tax Act by the Finance Act, 1989, with retrospective effect from April 1, 1970, to overcome the effect of those decisions. This being so, the aforesaid question of law does arise out of the Tribunal's order.

4. Consequently, the appeal is allowed with the result that the application made under section 256(2) of the Act for reference of the above question of law is allowed.

5. M.B.A./443/FC Appeal allowed.