LexM/S. FIBRE BOARDS (P) LTD. BANGALORE versus COMMISSIONER OF INCOME TAX, BANGALORE
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[2015) 8 S.C.R. 906 A M/S. FIBRE BOARDS (P) LTD. BANGALORE B v. COMMISSIONER OF INCOME TAX, BANGALORE (Civil Appeal Nos. 5525-5526 of 2005) AUGUST 11, 2015 [A. K. SIKRI AND R. F. NARIMAN, JJ.] Income Tax Act, 1961- s. 54G - Exemption of capital c gains on transfer of assets in cases of shifting of industrial undertaking from urban area - Exemption u/s. 54G - Claim of, by assessee - On the entire capital gain earned from the sale proceeds of its erstwhile industrial undertaking situated in notified urban area in view of the advances so made being D more than the capital gain made by it- Held: Advances paid for the purpose of purchase and/or acquisition of the said assets amount to utilization·by the assessee of the capital gains made by him for the purpose of purchasing·andlor acquiring the said assets - Thus, assessee entitled to E exemption uls. 54G. General Clause Act, 1897 - s. 24 - Applicability of- To omission of s. 280ZA and its re-enactment with mocJification in s. 54G - Held: On omission of s. 280ZA and F its re-enactment with modification in s. 54G, s. 24 of the General Clauses Act would apply, and the notification of 1967, declaring Thane to be an urban area, would be continued under and for the purposes of s. 54G. G Allowing the appeals, the Court HELD: 1.1 On a conjoint reading of the Budget Speech, notes on clauses and memorandum explaining the Finance Bill of 1987, it becomes clear that the idea of H omitting Section 280ZA and Introducing on the same date 906 M/S. FIBRE BOARDS (P) LTD. BANGALORE v. COMMNR. 907 OF INCOME TAX, BANGALORE Section 54G of the Income Tax Act, 1961 was to do away A with the tax credit certificate scheme together with the prior approval required by the Board, and to substitute the repealed provision with the new scheme contained in Section 54G. It is true that Section 280Y(d) was only omitted by the Finance Act, 1990 and was not omitted B together with Section 280ZA. However, it. is agreed that this would make no materi~I difference inasmuch as Section 280Y(d) is a definition Section defining "urban area" for the purpose of Section 280ZA only and for no . other purpose. It is clear that once Section 280ZA is C omitted from the statute book, Section 280Y(d) having no independent existence would for all practical purposes also be "dead". Quite apart from this, Section 54G(1) by its explanation introduces the very definition D contained in Section 280Y(d) in the same terms. · Obviously, both provisions are not expected to be applied simultaneously and it is clear that the explanation to Section 54G(1) repeals by implication Section 280Y(d). [Para 12] [924-H; 925-A-D] E 1.2 From a reading of the notes on clauses and . the Memorandum of the Finance Bill, 1990, it is clear that Section 280Y(d) which was omi.tted with effect from 1.4.1990 was so omitted because it had become F "redundant". It was redundant because it had no independent existence, apart from providing a definition of "urban area" for the purpose of Section 280ZA which had been omitted with effect from the very date that Section 54G was inserted, namely, 1.4.1988. Therefore, G the High Court erred in not referring t_o Section 24 of the General Clauses Act. [Para 15] [928-C-E] 1.3 On a reading of Section 24 together.with what has been stated by this Court in Harnek Singh's case, it H 908 SUPREME COURT REPORTS [2015] 8 S.C.R. A cannot be said that Section 24 would only apply to notifications which themselves gave rights to persons like the appellant. Unlike Section 6 of the General Clauses Act, which saves certain rights, Section 24 merely continues notifications, orders, schemes, rules etc. that B are made under a Central Act which is repealed and re- enacted with or without modification. The idea of Section 24 of the General Clauses Act is, as its marginal note shows, to continue uninterrupted subordinate legislation that may be made under a Central Act that is repealed C and re-enacted with or without modification. It being clear in the instant case that Section 280ZA which was repealed by omission and re-enacted with modification. in section 54G, the notification declaring Thane to be an 0 urban area dated 22.9.1967 would continue under and for the purposes of Section 54G. [Para 18] [932-A-D] 1.4 A reading of Section 6A of the General Clauses Act would show that a repeal can be by way of an express omission. This being the case, o
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