9911796707
|
Home
Issues Involved:
1. Accrual of interest on land acquisition compensation. 2. Point of time when compensation and interest accrue under the Land Acquisition Act. Summary: 1. Accrual of Interest on Land Acquisition Compensation: The primary issue was whether the land acquisition interest of Rs. 80,253 included by the Income-tax Officer u/s 5(1)(b) of the Income-tax Act, 1961, should be assessed in the year the decree was passed or spread over the years from the date of dispossession. The court held that interest on compensation awarded with respect to the land acquired under the Land Acquisition Act runs from day to day, accruing from the date on which the Government took possession of the land. The court found the contrary view expressed in Jairam's case [1979] 117 ITR 638 (Ker) to be wrong. 2. Point of Time When Compensation and Interest Accrue: The court clarified that the right to receive compensation accrues on the date of dispossession, not on the date of the decree. Compensation represents the market value of the property taken possession of by the Government, determined in accordance with sections 23 and 24 of the Act. Interest is paid to compensate for the delay in payment of compensation, and it accrues from the date of dispossession. The court emphasized that this right is a "right debitum in praesenti," meaning it is present and not dependent on later quantification by the court or Land Acquisition Officer. The court also noted that both compensation and interest relate back to the date of dispossession, irrespective of the time taken to settle the quantum of compensation. Conclusion: The court answered the question referred to it in the affirmative, in favor of the assessee and against the Revenue, holding that interest on compensation accrues from the date of dispossession and should be assessed accordingly.
|
