U.L. Bhat.C.J.-Income-tax Appellate Tribunal, Gauhati Bench, Gauhati has referred the following questions, at the instance of the assessee, under section 256 (1) of the Income-tax Act, 1961 (for short the Act) : "1. Whether under the facts and in the circumstances of the case, the show cause notice dated 22.6.81, issued by the Commissioner of Income-tax was valid in law and on facts ? 2. Whether under the facts and in the circumstances of the case the order dated 19.3.79 passed by the Income-tax Officer under the provisions of the Income-tax Act, 1961 was not an order of assessment and the said order was only a draft order of assessment ? 3. Whether under the facts and in the circumstances of the case inclusion of capital gains attributable to the sales of standing trees of spontaneous growth by the Income-tax Officer, in the order dated 19.3.79 and non-inclusion thereof in the order dated 11.9.79 parsed by the Income Tax Officer while giving effect to the directions issued by the Inspecting Assistant Commissioner under section 144B of Act was an order of the Income-tax Officer or of the Inspecting Assistant Commissioner and whe­ther the provisions of section 263 of the Income Tax Act attracted to this non-inclusion of the aforesaid income in the said order dated 11.9.79 ? 4. Whether under the facts and in the circumstances of the ease portion of the order dated 19.3.79 passed by the Income-tax Officer merged in the order of the Inspecting Assistant Commissioner passed under section 144B of the Act and as such the said merged portion of the order was not open to the provisions of section 263 of the IT Act ? 5. Whether under the facts and in the circumstances of the case the order dated 11.9,79 was :- (a) an order of the Income-tax Officer to the extent non-inclusion of income attributable to the sale of trees of spontaneous growth was concerned. (b) erroneous in so far as it is prejudicial to the interest of the revenue within the meaning of section 263 of the IT Act, 1961 on account of non-inclusion of income attributable to the sale of trees of spontaneous growth, 6. (b) erroneous in so far as it is prejudicial to the interest of the revenue within the meaning of section 263 of the IT Act, 1961 on account of non-inclusion of income attributable to the sale of trees of spontaneous growth, 6. Whether under the facts and in the circumstances of the case the order under appeal, directing the Income-tax Officer to assess income under section 45 of the IT Act attributable to the sale of standing trees of spontaneous growth is in accordance of the law and the facts and the Tribunal acted judiciously and upon consideration of the facts, law and the submissions urged in sustaining the said order as a whole, although, basic and relevant facts were alleged to be not available and the period for making fresh assessment after the order of assessment was set aside by the order under appeal have already expired ? 7. Whether under the facts and in the circumstances of the case sale proceed of the trees of spontaneous growth gave rise to income assessable under the head capital gains and Tribunal acted judicially in not recording findings thereon ? 8. Whether under the provisions of the Income-tax Act, direction issued by the Inspecting Assistant Commissioner under section 144B of the Act could be revised by the Commissioner of Income-tax under the provisions of section 263 of the said Act ? 9. Whether under the facts and in the circumstances of the case the order under appeal passed by the Commissioner of Income-tax under section 263 and the order of the Tribunal sustaining the same as a whole are not bad in law and in facts ? " 2. Assessee is a company and the assessment year is 1976-77. During the assessment year, company received consideration of Rs.3 lakhs as price of standing trees of spontaneous growth sold by it to third parties. Assessee filed a return showing the sale proceeds in Part III and claiming that it was revenue receipt and not capital gain under section 45 of the Act. ITO prepared a draft order proposing to include Rs. 2.98 lakhs (Rs. 3 lakhs less Rs,2000/- being the cost of acquisition) as capital gain. The matter was referred to Inspecting Assistant Commissioner (IAC), as required by section 144B (1) of the Act. ITO prepared a draft order proposing to include Rs. 2.98 lakhs (Rs. 3 lakhs less Rs,2000/- being the cost of acquisition) as capital gain. The matter was referred to Inspecting Assistant Commissioner (IAC), as required by section 144B (1) of the Act. IAC after hearing the assessee took the view that the sale consideration was not revenue receipt but capital receipt, as held in the previous years, and directed the sum of Rs.2.98 lakhs to be deleted from total income. ITO the­reupon followed the direction, as required by section 144B (5) of the Act and completed the assessment exculding Rs.2.98 lakhs. Comnissioner of Income-tax, invoking section 263 of the Act took up the matter in suo motu revision and issued notice to the assessee, who preferred objection. Commissioner ultimately passed an order holding that assessment order of ITO was erroneous and prejudicial to the interests of the Revenue, that the direction given by the IAC was wrong, that ITO erred in not making necessary enquiries or scrutiny and in not treating the amount as capital gain under section 45, set aside the order of ITO and directed him to make fresh assessment after full enquiry, The appeal preferred before the Tribunal by the assessee was dismissed with a direction that HO should bring facts on record to show what was the cost of acquisition as will as subsequent acquisition of land before finalising assessment. This order has given rise to the reference. 3. Question No.2 : It is contended for the assessee that the original order dated 19.3.79 passed by ITO proposing to include Rs. 2.98 lakhs in the total income of the assessee was a final order and not a draft order. It is true that ITO had considered several aspects of the question relating to the sale consideration of the trees and arrived at his own finding. But he has to do that even in preparing a draft of the proposed order of assessment, as required under sub-section (1) of section 144B of the Act. It is true that ITO had considered several aspects of the question relating to the sale consideration of the trees and arrived at his own finding. But he has to do that even in preparing a draft of the proposed order of assessment, as required under sub-section (1) of section 144B of the Act. This provision requires that where in an assessment to be made under section 143(3) of the Act, ITO proposes to make any variation in the income returned which is prejudicial to the assessee and the amount of such variation exceeds the amount fixed by the Board under sub-section (6), he shall, in the first instance, for ward a draft of the proposed order of assessment to the assessee. Sub-section (2) enables the assessee to forward his objections to the variation. According to sub-section (3) if the assessee accepts the variation, assessment has to be completed on the basis of the draft order. Sub-section (4) provides that if the assessee objects to the draft order within the time limited, ITO shall forward the draft order together with the objections to the IAC who shall, after considering the draft order and the objections and the records relating to draft order, issue, in respect of the matters covered by the objections, such directions as he thinks fit for the guidance of ITO to enable him to complete the assessment. ITO in this case proposed variation in the income to the extent of Rs.2.98 lakhs, which, was more than the amount fixed by the Board under sub-section (6). He was, therefore, bound to prepare a draft of the proposed order of assessment and deal with the same in accordance with the provisions of section 144B. He forwarded a copy of the draft order to the assessee, the assessee preferred objections within the time limited and thereupon ITO forwarded the draft and the objections to TAC who, after considering the objections, issued a direction to ITO not to add Rs. 2.9P> lakhs to the income as proposed in the original order. ITO thereupon completed the assessment obeying the direction and deleting Rs. 2.98 lakhs There can be no doubt that the order prepared by him originally was only a draft order, as contemplated under section 144B(1) of the Act. The question has to be answered in the affirmative that is, in favour of the Revenue and against the assessee. 4. ITO thereupon completed the assessment obeying the direction and deleting Rs. 2.98 lakhs There can be no doubt that the order prepared by him originally was only a draft order, as contemplated under section 144B(1) of the Act. The question has to be answered in the affirmative that is, in favour of the Revenue and against the assessee. 4. Question Nos. 3, 4 and 8 : It is contended for the assessee that the final order of assessment passed by ITO was really not his order but the order of IAC and alternatively the draft order passed by ITO in relation to sale consideration of trees merged in the order of IAC and has to be regarded as an order passed by IAC and as such, not amenable to revisional jurisdic­tion of the Commissioner under section 263 of the Act. It is further contended that the direction issued by IAC cannot be revised by the Commissioner under section 263 of the Act. 5. Section 263. as it stood in the assessment year 1976-77, read as follows: "263. (1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an oppor­tunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumst­ances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. (2) No order shall be made under sub-section (1) - (a) to revise an order of reassessment made under section 147, or (b) after the expiry of two years from the date of the order sought to be revised. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal the High Court or the Supreme Court. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal the High Court or the Supreme Court. Explanation : In computing the period of limitation for the purposes of sub-section (2), the time taken in giving an opportunity to the assessee to be re-heard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order of injunc­tion of any Court shall be excluded." The above provision invests with Commissioner revisional jurisdiction over any order passed by ITO subject to three conditions, namely, that he calls for and examines the record of the proceedings, that he finds the order to be erroneous and that the erroneous part of the order is prejudicial to the interests of the Revenue. The Commissioner is bound to give the assessee an opportunity of being heard. He may make or cause to be made such inquiry as he deems necessary. He may thereupon pass an order justified in the circum­stances and it is open to him to enhance or modify the assessment or cancel the assessment and direct a fresh assessment. This power does not extend to revising an order of reassessment made under section 147. The Commissioner cannot also pass an order in revision after the expiry of two years from the date of the order sought to be revised. However, if the order sought to be revised has been passed in giving effect to any finding or direction of the Appellate Tribunal, High Court or Supreme Court the revisional order may be passed at any time. We may also notice that section 264 confers on the Commissioner revisional power over any order other than an order attracting section 263. This power can be exercised suo motu or on an application by the assessee within the time limited. Commissioner however, cannot make an order prejudicial to the assessee. As the provision stood at the relevant time Commissioner could not revise an order in cases falling under sub-section (4). 6. It has to be borne in mind that the Revenue has no right of appeal against order of assessment passed by ITO or the Assessing Officer. Commissioner however, cannot make an order prejudicial to the assessee. As the provision stood at the relevant time Commissioner could not revise an order in cases falling under sub-section (4). 6. It has to be borne in mind that the Revenue has no right of appeal against order of assessment passed by ITO or the Assessing Officer. Section 263 is the only provision by which erroneous order of the Assessing Officer, which is prejudicial to the interests of the Revenue, could be corrected. Order of assessment is to be passed under section 143 where a return has been made under section 139. Section 144 provides for best judgment assessment. Section 144A confers on IAC power to issue directions for the guidance of ITO in proceedings pending assessment. Section 144B adverted to earlier, deals with the power of IAC to issue such directions on reference made by ITO in certain cases pending final assessment. It is significant to note that IAC has jurisdiction to issue directions under this provision only in relation to proceedings pending assessment before 1TO. Directions are issued or required to be issued for the guidance of ITO to enable him to complete the assessment. Order containing directions of TAG is not an order of assessment. It is an order containing pre-assessment directions passed for the purpose of enabling ITO to complete the assessment. The order of assessment is the order passed by ITO and not the order containing the directions issued by IAC. In this view of the matter, revisional jurisdiction under section 263 of the Act must extend to orders passed by ITO on the basis of directions issued by IAC. We are supported in this view by a catena of decisions of various High Courts. See 120 ITR 627 (Cal), CIT (Central) Calcutta vs. Christian Mica Industries Ltd; 164 ITR 197 (MP), CIT vs. KL Rajput; 173 ITU 611 (AP), Torson Products Ltd. vs. CIT; 175 ITR 629 (MP), CIT vs. Vithal Textiles; 175 ITR 634 (MP), CIT vs. Dulichand Bhatia; 181 ITU 314 (AP), CI TVS. East Coast Marine Products (P) Ltd. & another; 181 ITR 57 (MP), CIT vs. Satish Kumar & Co.; 181 ITR 392 (MP), CIT vs. Gangaram Mohanlal Mittal & Sons; 193 ITR 719 (Kerala); Premier Cable Co. Ltd. vs. CIT and 194 ITR 743 (Orissa), CIT vs. Vincentian Orissa Society. 7. East Coast Marine Products (P) Ltd. & another; 181 ITR 57 (MP), CIT vs. Satish Kumar & Co.; 181 ITR 392 (MP), CIT vs. Gangaram Mohanlal Mittal & Sons; 193 ITR 719 (Kerala); Premier Cable Co. Ltd. vs. CIT and 194 ITR 743 (Orissa), CIT vs. Vincentian Orissa Society. 7. We also do not think that the doctrine of merger can be invoked in a case like the present one. There is divergence of opinion on the question whether the order of assessment passed by ITO could be said to have merged in the appellate order passed by AAC to any extent. It is unnecessary for us to enter into this controversy since the present is not a case where the assessee filed an appeal against the order of ITO before AAC and AAC finally disposed of the appeal. Order completing the assessment in the present case was passed by ITO, no doubt on the basis of direction issued by IAC. Direction, as we have pointed out, was one issued pending completion of assessment and the direction was issued and was required to be issued for the guidance of ITO to enable him to complete the assessment. There was no question of order or direction of an inferior authority merging in the final order of a superior authority or vice-versa. There was no appeal before the AAC against the order of assessment passed by ITO. Direction of IAC was issued not in appeal or revision. It was issued on a reference by ITO pending assessment, It cannot be said that the order of ITO merged in the order of IAC giving direction. The doctrine of merger is not attracted in a case like the present one. It is true that in exercising revisional power, Commissioner will have to decide whether direction issued by IAC was correct or erroneous. But that is no reason to hold that there was merger of the draft assessment order in the order of IAC issuing the direction. The contention that the order of assessment must be treated as an order passed by IAC and not by ITO that there was merger and^ therefore, section 263 is not attracted is unsustainable. 8. Our attention has been drawn to certain statutory changes brought about in section 263. The contention that the order of assessment must be treated as an order passed by IAC and not by ITO that there was merger and^ therefore, section 263 is not attracted is unsustainable. 8. Our attention has been drawn to certain statutory changes brought about in section 263. By Taxation Laws (Amendment) Act, 1984, an explana­tion was introduced to sub-section (1) of section 263 of the Act with effect from 1.10.84. Explanation (a), as introduced in 1984, which is relevant for our purpose reads thus : "Explanation. - For the removal of doubts, it is hereby declared that, for the purposes of this sub-section, an order passed by the Income-tax Officer shall include- (a) an order of assessment made on the basis of directions issued by the Inspecting Assistant Commissioner under section 144A or section 144B;and ... ..." The declaration that an order of assessment made on the basis of directions issued by IAC under section 144B is an order passed by the ITO was introduced for the removal of doubts. It is clarificatory in nature and, therefore, must govern all cases pending on the date of the amendment or arising thereafter. It declares only the pre-existing legal position. We are sup­ported in this conclusion by the decisions in 175 ITR 629 (MP), CIT vs. Vithal Textiles; 175 ITR 634 (MP), CIT vs. Dulichand Bhatia; 181 ITR 57 (MP), CIT vs. Satish Kumar & Co; 181 ITR 392 (MP), CIT vs. Gangaram Mohanlal Mittal & Sons and 181 ITR 314 (AP),CIT vs. East Coast Marine Products (P) Ltd. & another. 9. Section 263 underwent further changes by Direct Taxes Law (Amend­ment) Act, 1987 with effect from 1.4.88. The expression "Income-tax Officer" in sub-section (1) was substituted by the words "Assessing Officer" and Expl­anation (a) (i) was suitably altered to refer to the directions issued by the Deputy Commissioner under section 144A and deleting reference to section 144B because the latter provision was also removed from the statute book. By an amendment introduced in 1989, Explanation (c) was added extending revisional power of the Commissioner in respect of orders passed by Assessing Officer subject to any appeal filed on or before or after 1.6.1988. We do not think these changes have any relevance in considering the matter in dispute in this case. 10. By an amendment introduced in 1989, Explanation (c) was added extending revisional power of the Commissioner in respect of orders passed by Assessing Officer subject to any appeal filed on or before or after 1.6.1988. We do not think these changes have any relevance in considering the matter in dispute in this case. 10. We, therefore, hold that the order sought to be revised by the Commissioner was the order of ITO completing the assessment and not an order of IAC, that order of ITO did not merge in the order of IAC and order of ITO passed following the directions issued by IAC is amenable to revisional jurisdiction of the Commissioner under section 263 of the Act. Questions 3, 4, and 8 have to be answered in favour of the Revenue and against the assessee. Question No.3 basto be answered in affirmative, Question No.4 in the negative and Question No.8 in the affirmative. 11. Question Nos. 1, 5, 6, 7 and 9 : It is necessary to advert to the facts and circumstances referred to by the various statute authorities. The company acquired the tea estate and jungle land prior to 1949 for a consolidated price. In 1962 and 1963, the company acquired further lands. In 1959, 1963 and 1964 assessee received Rs. 9,227'/-, Rs.10,972.29 and Rs.500/- as consideration for sale of trees and they were shown as revenue receipts in the return and offered for taxation. During each of the years 1972 to 1974, the assessee received Rs.5 lakhs on account of sale of standing trees. During the previous year relevant to assessment year 1975-76, the assessee received Rs.3 lakhs as consideration for standing trees. This amount was not added to the total income while completing the assessment. ITO subsequently sought to reopen the assessment under section 147 (a) of Act. This Court in the decision reported in 201 ITR 94, CIT vs. Tarajan Tea Co, (P) Ltd. held that the circumstances justifying reassessment under the above provision did not exist and, therefore, the assessment could not be reopened. For the assessment years 1972-73,1973-74 and 1974-75 reassessments were made which were ultimately |set aside by the Appellate Tribunal and the decision of the Appellate Tribunal was affirmed by this Court in Tarajan Tea Co. (P) Ltd. vs. CIT, 200 ITR 12. For the assessment years 1972-73,1973-74 and 1974-75 reassessments were made which were ultimately |set aside by the Appellate Tribunal and the decision of the Appellate Tribunal was affirmed by this Court in Tarajan Tea Co. (P) Ltd. vs. CIT, 200 ITR 12. A similar reassessment for the year 1975-76 was quashed by the Tribunal, whose decision was affirmed by this Court in CIT vs. Tarajan Tea Co. (P) Ltd. 201 ITR 94. Agreement upto 30.3.71 between the assessee and the purchaser of standing trees recited that the assessee agreed "to grant license over the areas of land earmarked and to be earmarked from time to time out of the gross area of the Tarajan Tea Estate owned by it, to cut, fell and remove all trees of spontaneous growth so that the area of land became suitable for the cultivation of the tea plantation and or other cultivation". In the Director's report for the year ending 31.12.71 it was stated that the assessee had entered into an agreement with the purchaser for selling standing trees in its grant and clearing such areas of jungle which will provide adequate funds for new extension. In the Director's report for the year ending 31.12.73 it was stated that these areas so cleared shall be utilised for new extension. In the Director's report for the year ending 31.12.73 it was stated that as soon as replanting of uprooted area is completed, work shall be taken up for further extension of the tea area, as by that time sufficient plants shall be available for the extension. 12. In the draft order, ITO referred to the acquisition of land prior to 1949 and in 1962 and 1963, acquisition of land with plantation and jungle land, the fact that acquisition was made for consolidated price including the cost of the jungle in the total consideration treating the sale price of trees in 1959, 1963 and 1964 as revenue receipts and the fact that trees were sold in 1972 to 1975. He drew the inference that the assessee had been obtaining regular receipts in an organised manner from sales of spontaneous growth to its sister concerns. He drew the inference that the assessee had been obtaining regular receipts in an organised manner from sales of spontaneous growth to its sister concerns. He also stated that it cannot be said that the trees did not cost anything to the assessee though some of the trees might have grown spon­taneously on the land subsequent to the acquisition, that the consideration paid for the land would include the price of the trees also and that the cost originally paid would cover the growth of new spontaneous trees. He estimated the cost of acquisition at Rs.2,000/-. On these grounds he was of the opinion that consideration received for the sale of trees was revenue receipt and even if it is to be treated as capital receipt, it is liable to be included in the total income as there was cost of acquisition. 13. The order of IAC shows that he did not apply his mind to any of the facts and circumstances referred to in the draft order. He took the view that ITO had no evidence in support of his conclusion, that it was based on guess work, that the sale deed would not show that any consideration was paid for the standing trees also, that in the earlier assessments, ITO had considered the matter and held that no part of the consideration was to be added to the income and for the assessment year in question no new facts had been brought on records to enable the authority to take a different view. 14. The Commissioner in his order referred to the agreement dated 30.3.71 and the three reports of the Director and indicated that though trees might have been uprooted, in the instant case, the consideration would be liable to be added to the total income under section 45 of the Act. 15. The principles on the basis of which consideration received for sale of trees of spontaneous growth is to be treated as revenue receipt or capital receipt have been laid down in C1T vs. Ambat Echukutty Menon, 120 ITR 70. This Court also had occasion to consider the matter in CIT vs. Tarajan Tea Col (P) Ltd., 201 ITR 94, which related to the assessee involved in this case. These principles do not require reiteration. This Court also had occasion to consider the matter in CIT vs. Tarajan Tea Col (P) Ltd., 201 ITR 94, which related to the assessee involved in this case. These principles do not require reiteration. In our view none of the statutory authorities had considered the matter in its correct perspective after adverting to all the relevant circumstances and applying the correct legal principles. The draft order would suggest the ITO's conclusion that it was capital receipt though he found in the course of discussion that the assessee was obtaining regular receipt in an organised manner from sale of trees of spontaneous growth to its sister concerns. IAC did not advert to any other relevant circum­stances except the sale deed and the orders of some of the prior years. It is not contended before us that the prior assessment orders are conclusive or binding on the parties. The Commissioner's order exhibits a degree of confusion of thought. He did not refer to the terms of the sale decd under which land was acquired. He found from the Director's report that ITO was to clear the land of old trees for the purpose of cultivation and also to raise adequate funds for new plantation. He did not give any reason for his conclusion that section 45 of the Act was attracted. 16. It is contended by learned counsel for the assessee that unless the revisional authority is satisfied that the order of ITO is erroneous and on account of such error prejudicial to the interests of the Revenue, revisional power cannot be exercised The Commissioner did indicate that the order of ITO ignoring the sale consideration was erroneous. If any part of the sale consideration was liable to be included in the total income of the assessee, the exclusion of that income on account of an erroneous view would certainly be prejudicial to the interests of the Revenue. Therefore, we are unable to agree that the Commissioner committed any error of jurisdiction. 17. The Commissioner as well as the Tribunal directed ITO to conduct proper and full enquiry into the question be/ore arriving at his decision. It is argued that this would mean that relevant facts were not available and, therefore, the Commissioner and the Tribunal could not have interfered. We are unable to agree. 17. The Commissioner as well as the Tribunal directed ITO to conduct proper and full enquiry into the question be/ore arriving at his decision. It is argued that this would mean that relevant facts were not available and, therefore, the Commissioner and the Tribunal could not have interfered. We are unable to agree. If assessment was made by ITO or direction was given by IAC without making due and proper enquiry such order or direction, as the case may be, would be erroneous and the Commissioner would be justified in directing a further enquiry to be made and assessment to be completed. 18. It is contended that the sale deed of acquisition of the land did not specify that any part of the consideration was paid for trees of spontaneous growth and, therefore, there was no cost of acquisition in regard to those trees and the transfer of capital assets for which there was no cost of acqui­sition would not attract section 45 of the Act. Section 45 takes in any profit or gain arising from the transfer of a capital asset effected in the previous year and such profit or gain is chargeable to income-tax under the head 'capital gains' and shall be deemed to be the income of the previous year in which the transfer took place. Section 48 deals with the mode of computation and deductions. Ordinarily income chargeable under the head 'capital gains' is to be computed by reckoning the full value of the consideration received on transfer and deducting therefrom the expenditure incurred in connection with the transfer and the cost of the acquisition of the asset and the cost of any improvement thereto. 19. In CIT vs. BC Srinivasa Setty, 1281TR 294, Supreme Court in considering whether goodwill of a new business is capital asset, observed : "Section 45 is a charging section. For the purpose of imposing the charge, Parliament has enacted detailed provisions in order to compute the profits or gains under that head,.. . , All transactions encompassed by section 45 must fall under the governance of its computation provisions. A transaction to which those provisions cannot be applied must be regarded as never intended by section 45 to be the subject of the charge. . , All transactions encompassed by section 45 must fall under the governance of its computation provisions. A transaction to which those provisions cannot be applied must be regarded as never intended by section 45 to be the subject of the charge. This inference flows from the general arrangement of the provisions in the IT Act, whereunder each head of income charging provision is accompanied by a set of provisions for computing the income subject to that charge. The character of the computation provisions in each case bears a relationship to the nature of the charge. Thus, the charging section and the computation provisions together constitute an integrated code. When there is a case to which the computation provisions cannot apply at all, it is evident that such a case was not intended to fall within the charging section." After considering sections 48, 49 and 50 the Court observed : "None of the provisions pertaining to the head 'Capital gains' suggests that they include an asset in the acquisition of which no cost at all can be conceived. Yet there are assets which are acquired by way of produc­tion in which no cost element can be identified or envisaged. From what has gone before, it is apparent that the goodwill generated in a new business has been so regarded." Supreme Court held that in the case of goodwill there was no identifiable cost element and in the case of goodwill generated in a new business it was not possible to determine the date on which it came into existence and therefore section 45 is not attracted. It is true that the effect of this decision regarding 'goodwill' has been overcome by Finance Act, 1987 amending section 55 so as to provide that cost of acquisition of goodwill acquired other than by pur­chase shall be taken to be nil and cost of improvement of goodwill, whether acquired by purchase or otherwise, shall also be taken to be nil. However, the principles laid down by the Supreme Court continued to have efficacy. 20. Can it be said that no cost element can be identified or envisaged in the case of an asset like trees of spontaneous growth ? However, the principles laid down by the Supreme Court continued to have efficacy. 20. Can it be said that no cost element can be identified or envisaged in the case of an asset like trees of spontaneous growth ? Under section 3(26) of the General Clauses Act, 1897 immovable' property shall include land, benefits to arise out of land, and things attached to the earth, or permanently, fastened to anything attached to the earth. The negative definition in section 3, Transfer of Property Act, 1882 indicates that immovable property does not include standing timber, growing crops or grass. Standing timber is a tree that is in a state fit for the purpose of building houses, bridges etc. even though it is not cut; a tree that is meant to be converted into timber so shortly that it can already be looked upon as timber for all practical purposes even though it is still standing. If not, it is still a tree because, unlike timber, it will continue to draw sustenance from the soil, as observed by Vivian Bose.J. in Smti Shantabai vs. State of Bombay & others, AIR 1958 SC 532 thus : "Before a tree can be regarded as 'standing timber' it must be in such a state that, if cut, it could be used as timber,- and when in that state it must be cut reasonably early. The rule is probably grounded on genera­tions of experience in forestry and commerce and this part of the law may have grown out of that ... the legal basis for the rule is that trees that are not cut continue to draw nourishment from the soil and that the benefit of this goes to the grantee." Therefore, it was held that the trees except standing timber are immovable property. According to section 8, Transfer of Property Act, 1882 unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property, and in the legal incidents thereof including the easements annexed thereto, the rents and all things attached to the earth. These are certainly attached to earth and title to trees passes alongwith title to the land. 21. These are certainly attached to earth and title to trees passes alongwith title to the land. 21. It is not the case of the assessee that he did not obtain title to trees of spontaneous growth under the sale deed relating to the land. Consideration was paid for the sale deed. It must ordinarily follow that the consideration was not only for the land but everything which was conveyed in the sale deed including trees and other things attached to earth. It may perhaps be open i n a given case for parties to the transaction to allege and prove that consi­deration only related to land it was not intended that the price should take in the trees also. It is, therefore, erroneous to hold that merely because a sale deed did not specify that a part of the consideration was towards the price of trees of spontaneous growth, there was no cost of acquisition for those trees. 22. It is not quite certain if the trees sold in the previous year relevant to the assessment year were trees standing at the time of acquisition or trees which grew on roots and trunk existing on the date of acquisition or on roots and trunks of trees existing at the time of acquisition and cut subsequently. This is a matter which should be investigated by ITO after calling upon the assessee to furnish relevant data. IAC had no such data before him in order to enable him to conclude that there was no cost of acquisition. It is also for consideration if the spontaneous growth required any care or attention by way of protection from animals and the like and, if so, whether the assessee did not incur any cost in that regard. Any decision either way without considering these aspects would certainly be erroneous and any decision in favour of the assessee without considering these aspects would be prejudicial to the interests of the Revenue. 23. Question No. 5 has to be answered in the affirmative, that is, in favour of the Revenue and against the assessee. Question No. 6 has to be answered in the affirmative in the light of the above discussion, that is, in favour of the Revenue and against the assessee. It is not necessary that the Tribunal should record firm findings in all matters of controversy. Question No. 6 has to be answered in the affirmative in the light of the above discussion, that is, in favour of the Revenue and against the assessee. It is not necessary that the Tribunal should record firm findings in all matters of controversy. It is open to the Tribunal to arrive at a conclusion that the matter in controversy was not considered properly or lawfully by ITO or IAC and direct such consi­deration. Question No. 7 is, therefore, answered in the affirmative, that is in favour of the Revenue and against the assessee. Questions No. 1 and 9 are general questions which arise on the basis of answers of the other questions and have to be answered in the affirmative, that is, in favour of the Revenue and against the assessee. 24. In the result, Questions No. 1, 2, 3, 5, 6, 7, 8 and 9 are answered in the affirmative, that is, in favour of the Revenue and against the assessee. Question No. 4 is answered in the negative, that is, in favour of the Revenue and against the assessee. A copy of this judgment under the signature of the Registrar and seal of the High Court be transmitted to the Appellate Tribunal. There will be no direction as to costs.