(Appeal by special leave against judgment and order, dated September 8, 1976 of the Andhra Pradesh High Court in Case Referred No.40 of 1975).

Income-tax---

----Capital gains---"Capital asset"---Route permits to ply buses---Constitute capital assets---No amount paid for route permit---Permit acquiring value because of various factors like road development, passenger traffic and frequency Consideration for sale of permit---Not assessable to tax as capital gains---Indian Income Tax Act, 1961, S.45.

Against the decision of the Andhra Pradesh High Court in CIT (Addl.) v. Ganapathi Raju Jogi, Sanyasi Raju (1979) 119 ITR 715 to the effect that though route permits for buses granted by the road transport authority were capital assets, where no amount was paid by the operator for acquiring a route permit and it was only over a number of years that it acquired some value because of various factors, namely, development of roads, passenger traffic, frequency of the buses, the value of the permit could not be evaluated as on the date of acquisition and in such a case the consideration in terms of money realised on its transfer could not be brought to tax as capital gains, the Department preferred an appeal to the Supreme Court. The Supreme Court dismissed the appeal.

CIT v. B.C. Srinivasa Setty (1981) 128 ITR 294 (SC) fol.

CIT (Addl) v. Ganapathi Raju Jogi, Sanyasi Raju (1979)119 ITR 715 affirmed.

N.K. Shukla and B.B. Ahuja, Senior Advocates (P. Parameswaran, Advocate with them) for Appellant.

A. Subba Rao for Respondent.

JUDGMENT

Counsel for both the parties state that, following the decision of this court in CIT v. B.C. Srinivasa Setty (1987.) 128 ITR 294, this appeal has to be dismissed. It is, accordingly, dismissed. No costs.

M.B.A./2304/TAppeal dismissed.