Deputy CIT v. Padam Prakash (HUF)

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The Tax Publishers2008 TaxPub(DT) 0344 (Del-Trib) : (2007) 014 (II) ITCL 0127 : (2008) 288 ITR 0001 : (2007) 104 ITD 0001 : (2006) 104 TTJ 0989 : (2006) 010 SOT 0001 Deputy CIT v. Padam Prakash (Huf) INCOME TAX ACT, 1961 Capital gains - Chargeability - Enhanced compensation *Held:* Enhanced compensation was to be taxed in year in which it received and accordingly, it would not made any difference whether compensation was received as per interim order or on certain conditions or without any condition. Since, assessees land was acquired under provision of Land Acquisition Act, 1894 and enhanced compensation was granted to assessee by Appellate Court, therefore, enhanced compensation was to be taxed in year of receipt, notwithstanding the facts that order under which compensation and interest was received, was challenged before higher courts and litigation was pending for same. Income-tax Act, 1961, Section 45 A.Y. : 1995-96 Decision: In favour of assessee. INCOME TAX ACT, 1961 Income - Accrual -Interest payable on enhanced compensation *Held:* Since, dispute relating to interest payable to assessee under provisions of Land Acquisition Act, 1894 on enhanced compensation was pending before a court of law and had not attained finality, therefore, it would not accrue and could be subjected to tax only after it was finally determined. Circulars and Notifications - CBDT Circular No. 240, dated 17-5-1978, CBDT Circular No. 495, dated 22-9-1987, CBDT Circular No. 621, dated 19-12-1991 Income-tax Act, 1961, Section 5, CBDT Circular No. 240, dated 17-5-1978, CBDT Circular No. 495, dated 22-9-1987, CBDT Circular No. 621, dated 19-12-1991 A.Y. : 1995-96 Decision: In favour of assessee. Case Law Analysis:CIT v. Hindustan Housing & Land Development Trust Ltd. [1986] 161 ITR 524/27 Taxman 450A (SC) (para 1), Dy. CIT v. Bhim Singh Lather [2006] 99 ITD 46 (Delhi) (TM) (para 5), P.C. Puri v. CIT [1985] 151 ITR 584 (Delhi) (para 5), Dy. CIT v. Oman International Bank SAOG [2006] 100 ITD 285 (Mum.) (SB) (para 5), ITAT v. Dy. CIT [1996] 218 ITR 275/ 85 Taxman 60 (SC) (para 7), CIT v. Orissa State Financial Corpn. [2003] 262 ITR 350/ 126 Taxman 157 (Ori.) (para 13), Chief CIT v. Smt. Shantavva [2004] 267 ITR 67/ 136 Taxman 678 (Kar.) (para 14), CWT/CIT v. Smt. T. Girija Ammal [2006] 282 ITR 614/ 154 Taxman 211 (Mad.) (para 14), Mercantile Bank Ltd. v. CIT [2006] 283 ITR 84/ 153 Taxman 97 (SC) (para 14), CIT v. Laxman Dass/Ram Murti [2000] 246 ITR 622/[2001] 118 Taxman 609 (All.) (para 19), CIT v. Abdul Mannan Shah Mohammed [2001] 248 ITR 614/ 118 Taxman 224 (Bom.) (para 19), CIT v. National Electric Supply & Trading Corpn. (P.) Ltd. [2001] 248 ITR 794/ 114 Taxman 326 (Delhi) (para 19), CWT v. T. Girijammal [2006] 284 ITR 482 (Mad.) (para 19), Smt. Rama Bai v. CIT [1990] 181 ITR 400/[1991] 54 Taxman 496 (SC) (para 20), P. Mariappa Gounder v. CIT [1998] 232 ITR 2 (SC) (para 20), Navinchandra Mafatlal v. CIT [1954] 26 ITR 758 (SC) (para 21), CIT v. B.C. Srinivasa Setty [1981] 128 ITR 294/ 5 Taxman 1 (SC) (para 21), Mrs. Khorshed Shapoor Chenai v. ACED [1980] 3 Taxman 23 (SC) (para 21), A.N. Roy, Commissioner of Police v. Suresh Sham Singh 2006 (6) JT 89 (para 22), Cooke v. Charles A. Vogeler Co. 1901 AC 102 (para 22), Cape Brandy Syndicate v. IRC [1921] 1 KB 64 (para 22), Orissa State Warehousing Corpn. v. CIT [1999] 4 SCC 197 (para 22) and Allied Motors (P.) Ltd. v. CIT [1997] 224 ITR 677/ 91 Taxman 205 (SC) (para 27). SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2008 TaxPub(DT) 0344 (Del-Trib) : (2007) 014 (II) ITCL 0127 : (2008) 288 ITR 0001 : (2007) 104 ITD 0001 : (2006) 104 TTJ 0989 : (2006) 010 SOT 0001

Deputy CIT v. Padam Prakash (Huf)

INCOME TAX ACT, 1961

Capital gains - Chargeability - Enhanced compensation

Held: Enhanced compensation was to be taxed in year in which it received and accordingly, it would not made any difference whether compensation was received as per interim order or on certain conditions or without any condition. Since, assessees land was acquired under provision of Land Acquisition Act, 1894 and enhanced compensation was granted to assessee by Appellate Court, therefore, enhanced compensation was to be taxed in year of receipt, notwithstanding the facts that order under which compensation and interest was received, was challenged before higher courts and litigation was pending for same.

Income-tax Act, 1961, Section 45

A.Y. : 1995-96
Decision: In favour of assessee.

INCOME TAX ACT, 1961

Income - Accrual -Interest payable on enhanced compensation

Held: Since, dispute relating to interest payable to assessee under provisions of Land Acquisition Act, 1894 on enhanced compensation was pending before a court of law and had not attained finality, therefore, it would not accrue and could be subjected to tax only after it was finally determined.

Circulars and Notifications - CBDT Circular No. 240, dated 17-5-1978, CBDT Circular No. 495, dated 22-9-1987, CBDT Circular No. 621, dated 19-12-1991

Income-tax Act, 1961, Section 5, CBDT Circular No. 240, dated 17-5-1978, CBDT Circular No. 495, dated 22-9-1987, CBDT Circular No. 621, dated 19-12-1991

A.Y. : 1995-96
Decision: In favour of assessee.

Case Law Analysis:CIT v. Hindustan Housing & Land Development Trust Ltd. [1986] 161 ITR 524/27 Taxman 450A (SC) (para 1), Dy. CIT v. Bhim Singh Lather [2006] 99 ITD 46 (Delhi) (TM) (para 5), P.C. Puri v. CIT [1985] 151 ITR 584 (Delhi) (para 5), Dy. CIT v. Oman International Bank SAOG [2006] 100 ITD 285 (Mum.) (SB) (para 5), ITAT v. Dy. CIT [1996] 218 ITR 275/ 85 Taxman 60 (SC) (para 7), CIT v. Orissa State Financial Corpn. [2003] 262 ITR 350/ 126 Taxman 157 (Ori.) (para 13), Chief CIT v. Smt. Shantavva [2004] 267 ITR 67/ 136 Taxman 678 (Kar.) (para 14), CWT/CIT v. Smt. T. Girija Ammal [2006] 282 ITR 614/ 154 Taxman 211 (Mad.) (para 14), Mercantile Bank Ltd. v. CIT [2006] 283 ITR 84/ 153 Taxman 97 (SC) (para 14), CIT v. Laxman Dass/Ram Murti [2000] 246 ITR 622/[2001] 118 Taxman 609 (All.) (para 19), CIT v. Abdul Mannan Shah Mohammed [2001] 248 ITR 614/ 118 Taxman 224 (Bom.) (para 19), CIT v. National Electric Supply & Trading Corpn. (P.) Ltd. [2001] 248 ITR 794/ 114 Taxman 326 (Delhi) (para 19), CWT v. T. Girijammal [2006] 284 ITR 482 (Mad.) (para 19), Smt. Rama Bai v. CIT [1990] 181 ITR 400/[1991] 54 Taxman 496 (SC) (para 20), P. Mariappa Gounder v. CIT [1998] 232 ITR 2 (SC) (para 20), Navinchandra Mafatlal v. CIT [1954] 26 ITR 758 (SC) (para 21), CIT v. B.C. Srinivasa Setty [1981] 128 ITR 294/ 5 Taxman 1 (SC) (para 21), Mrs. Khorshed Shapoor Chenai v. ACED [1980] 3 Taxman 23 (SC) (para 21), A.N. Roy, Commissioner of Police v. Suresh Sham Singh 2006 (6) JT 89 (para 22), Cooke v. Charles A. Vogeler Co. 1901 AC 102 (para 22), Cape Brandy Syndicate v. IRC [1921] 1 KB 64 (para 22), Orissa State Warehousing Corpn. v. CIT [1999] 4 SCC 197 (para 22) and Allied Motors (P.) Ltd. v. CIT [1997] 224 ITR 677/ 91 Taxman 205 (SC) (para 27).