Judgment

Srinivasan, J.-The appellants purchased certain lands with buildings thereon in 1977 for a sum of Rs. 2,45,000/-. The Ins­pector of Income Tax valued them at Rs. 3,24,000/- and later in 1979 the Departmental Valuation Officer valued them at Rs. 7,24,000/-. The Inspecting As­sistant Commissioner, Acquisition Range, Ernakulam ordered acquisition of the property on 31.3.1981. The appellants filed an appeal to the Tribunal by order dated 31.10.1981. The appeal was allowed and the proceedings were cancelled. As against the said order, the Revenue filed an appeal under Section 269H in the High Court of Kerala.

2. During the pendency of the appeal, Chapter XX-C was introduced in the Income Tax Act (hereinafter referred to as ‘Act’) by Finance Act of 1986 w.e.f. October 1, 1986. Under Section 269 RR, Chapter XX-A was made inapplicable in relation to transfer of an immovable property after September 30, 1986. The Central Board of Direct Taxes (hereinaf­ter referred to as ‘C.B.D.T.’) issued Circular No. 455 dated 16.9.1986. The relevant part of the Circular reads as follows:-

“With a view to achieve early finalisation of proceedings under the existing Chapter XX-A of the Income-Tax Act