Commissioner of Income Tax vs Dr. S. Roopkaran

Divan, C.J.—The two questions which are sought to be referred to the High Court arise in connection with the capital gains which the assessee is said to have earned in the year of assessment. It is clear on the facts of the case as set out by the Tribunal that the assessee exchanged his immovable property for the shares floated by the transferee-company. In order to find out what the amount of capital gains was, the Tribunal had to ascertain the basic worth of the shares and the Tribunal has valued those shares in the light of well-known principles of accountancy regarding the valuation of the shares of a private limited company. It cannot be said that the Tribunal has adopted any wrong principles or has erred in law in arriving at the conclusions regarding the valuation of the shares. Hence, questions Nos. 1 and 2 which turn upon the question of capital gains cannot be said to arise as questions of law out of the order of the Tribunal. As regards question No. 3, since the question of charging of interest was part of the appeal relating to capital gains, it cannot be said that the appeal was filed only on the question of interest u/s 139. Hence, the appeal was certainly maintainable as laid down by several decisions of the different High Courts. Under these circumstances, even question No. 3 cannot be said to arise out of the order of the Tribunal. This Income Tax reference, therefore, fails and is dismissed.