9911796707
TMI Blog2004 (1) TMI 312X X X X Extracts X X X X X X X X Extracts X X X X ..... m. We order accordingly. 3. The brief facts relating to confirming the addition of Rs. 1,16,830, as stated in the order of CIT(A), are that the assessee filed its return of income on29th Aug., 1981, declaring an income of Rs. 1,25,700. However, the original assessment was passed at income of Rs. 2,48,940. In the said order, the AO had made the addition of Rs. 1,16,820 on account of income earned through agreement with M/s P.C. Chanda Co. (P) Ltd. The facts are that P.C. Chanda Co. owned a piece of land. This land was acquired by the Government and certain compensation was awarded to him. The compensation was also paid to it. The said company filed an application with the District Court for enhancement of the compensation. The District ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, the AO considered the submissions of the assessee and held that the amount received by the assessee was taxable. He accordingly brought the same to tax in the hands of the assessee. 4. Same arguments were taken before the CIT(A) as were taken before the AO. After considering the submissions and perusing other material on record, the CIT(A) was also in agreement with the AO. Therefore, he confirmed the order of the AO. 5. Th contentions raised before the lower authorities were reiterated here before us by the learned counsel. It was further stated that the amount received by assessee on account of enhanced compensation is not taxable in the hands of the assessee, as the same is application of income and there is no overriding titl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee are taxable. It was further stated that in no manner the agreement can be treated as invalid agreement, as the agreement was for rendering the services to a person on whose behalf the case was filed before the Hon ble High Court as well before the Hon ble Supreme Court by the assessee. 6. We have considered the rival submissions and have also perused the material to which our attention was drawn. We have also seen the various case laws relied upon by both the parties. After considering the relevant material, we found that the CIT(A) was justified in not allowing the claim of the assessee. We noted that the appellant through his benamidar, Chakresh Kumar Jain entered into an agreement with P.C. Chanda Co. (P) Ltd. for contesting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income come to Rs. 2,68,837. As per agreement the share of the appellant came to Rs. 1,20,977. Thus, the appellant received the following amounts: Rs. Share in balance receipts 1,20,977 Expenses as per agreement 10,000 Expenses as allowed by the Court 4,572 1,35,549 7. The assessee incurred expenses of Rs. 18,719 and the balance amount was not offered for taxation on the ground that the said payment was in the nature of gratis. The arguments of the counsel of the assessee that no one is allowed to take litigation of some other person and, therefore, the same was illegal in the eyes of law and further contention tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... greements were taxable or not. In these cases, thefirst Courthas decided the issue in favour of plaintiff by holding that the agreements were valid. However, on further appeal by the defendant, whereby the validity of agreement was challenged, it was held that because the agreement was void, therefore, no award can be awarded on account of that agreement. 11. Here in the case in hand, the facts are totally different because the agreement was entered and the Hon ble Punjab Haryana High Court has enhanced the compensation and the appeal of the Haryana Government as well as of P. Chanda Co. filed by assessee were dismissed by the Hon ble Supreme Court, meaning thereby that the enhanced compensation allowed by the Hon ble High Court was u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Sec. 15(1) of that Act provided for different types of cash allowance. On a later stage, the appellant was conveyed about the sanction of compassionate payment of Rs. 3,000 w.e.f.1st Aug., 1956by the Collector vide his letter dt.6th Oct., 1959. The appellant received Rs. 36,000 and Rs. 33,992 from the Government of Maharashtra respectively during the financial year ending31st March, 1963and31st March, 1964and the question was whether the receipts were receipts of income and were taxable. The Hon ble Bombay High Court has held that these receipts are taxable. However, the Hon ble Supreme Court reversed the decision of the High Court by holding that the payments sanctioned on compassionate ground are capital in nature and not taxable. 13. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
