( 1 ) THE Income-tax Appellate Tribunal under section 256 (1) of the Income-tax Act, 1961, referred the following question of law :"whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal is correct in law in holding that capital gains does not arise on acquisition by the Government of the lands in which the assessee had right of protected tenancy ?"the assessee was a protected tenant in respect of lands measuring Acs. 44-19 guntas situated in Yusufgude, within the limits of Hyderabad Municipality. Pursuant to the acquisition proceedings by the State Government for the purpose of the Housing Board, the lands vested in the Government on 18/05/1972. A total compensation of Rs. 10,66,472 was awarded for the lands and the assessee being a protected tenant, she was held to be entitled to 60% of the same and awarded Rs. 6,39,883. The Income-tax Officer levied capital gains on the said amount after giving usual statutory deductions. On appeal, the Commissioner of Income-tax (Appeals) confirmed the order of the Income-tax Officer. On further appeal, the Appellate Tribunal held that the right of protected tenancy stands on the same footing