9911796707
|
Home
Issues involved:
The judgment addresses two main issues: 1. Whether the Income-tax Officer was competent to tax capital gains for the assessment year 1973-74 when the lands vested in the Government prior to that year. 2. Whether interest should be assessed on an accrual basis for the same assessment year. Issue 1 - Capital Gains Assessment: The lands in question were acquired under the Land Acquisition Act, with possession taken in January 1967. An award was passed in 1970, and a compromise was reached in the previous year relevant to the assessment year 1973-74. The Income-tax Officer assessed the capital gain at Rs. 2,27,338 for the assessment year 1973-74. However, the Appellate Assistant Commissioner and the Tribunal both concluded that the capital gain should be assessed for the year 1967-68 when the transfer took place, not in 1973-74. The High Court upheld this decision, stating that the capital gain is liable to be taxed in the year of transfer as per Section 45 of the Income-tax Act, which in this case was 1967-68. Issue 2 - Interest Assessment: The interest paid to the assessee was under section 34 of the Land Acquisition Act, which is statutory and not discretionary. The right to receive this interest accrues from year to year. The Tribunal correctly excluded the interest from the assessment for the year 1973-74 as none of it related to that year. Citing the case of CIT v. V. Janardhan Reddy, the High Court affirmed that interest under section 34 should be assessed from year to year. Therefore, the second question was also answered in favor of the assessee. In conclusion, both issues were decided in favor of the assessee, with the High Court affirming that the capital gain should be assessed in the year of transfer (1967-68) and that interest under section 34 should be assessed from year to year.
|
