JAGDISH SUGAR MILLS LTD. vs THE C.I.T LUCKNOW

The Supreme Court held that the auction sale of properties under the U.P. Zamindari Abolition and Land Reforms Act, 1950, is a valid sale under Section 10(2)(vii) of the Income-tax Act, 1922, despite being compulsory. The Court clarified that the sale is deemed to occur at the time of the auction, not when the sale certificate is issued, thus making it subject to capital gains tax under Section 12B. The appeal by the assessee was dismissed, affirming the High Court's decision in favor of the Revenue.