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TMI Blog1994 (8) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... acquired by the Govt. for an industry to be set up by M/s Kirloskar Bros., Dewas. 3. In respect of the acquisition of land, the comspensation was finally determined by the Madhya Pradesh High Court in a sum of Rs. 2,33,169 vide its order dt. 25th Nov., 1980, which amount included a sum of Rs. 1,29,129 towards interest. 4. The Assessing Officer took the view that the amount of compensation and interest was assessable in the hands of the assessee in the year of receipt. A capital gain tax was worked out at Rs. 66,164 arising out of the sale of land of the assessee-HUF. The assessment was eventually completed under s. 144 of the IT Act. 5. The case of the assessee is that the possession of land that was acquired was handed over to M/s Kirlo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the quantification of the compensation was in dispute. 10. In amongst the heirs of late Raghunath Singh, the land stood divided by way of an old partition in respect of which a declaratory suit was filed on 17th March, 1969. As per this, the land under acquisition belonged to S/Sri Ranjeetsingh and Bhimsingh and the assessee and his 4 brothers belonging to the branch of late Kishansingh, the third son of Sri Raghunathsingh. Necessary entries to this effect were also made in the land records. 11. On the strength of these facts, the assessee pleaded that no capital gain arose on the sale of the agricultural land during the asst. yr. 1982-83; secondly that the capital gain arose consequent upon Government's notification dt. 7th April, 1961, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ist Class Civil Judge, Dewas, vide his order dt. 22nd April, 1969, a copy of which has been filed on record. It, therefore, follows that the appellant's HUF had only 1/5th of 1/3rd share in the interest amount so received at Rs. 1,29,129 which comes to Rs. 8,608 only. The learned counsel had also pleaded about the taxability of the amount so received on accrual basis and has relied upon the A.P. High Court's decision in the case of CIT vs. Nawab Mahood Jung Bahadur (1988) 70 CTR (AP) 77 : (1988) 172 ITR 592 (AP). However, without going into the same, I am convinced that at the most a sum of Rs. 8,608 can be taxed in the hands of the appellant-HUF. The balance amount of Rs. 1,20,521 has to be deleted from the hands of the appellant. The app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erged out remain totally undisputed. Certain lands were acquired by the Government vide Notification dt. 6th July, 1961, under s. 6 of the Land Acquisition Act. The possession was also delivered and there was nothing left in respect of the land in question with their owners except the right to get compensation or seek remedy to claim enhanced compensation. Incidentally, the original compensation granted by the award amounted to Rs. 33,847.33 was also received. The quantification was, however, disputed which was finally determined by an order dt. 25th Nov., 1990, rendered by the Hon'ble High Court of Madhya Pradesh whereby the total compensation granted came to Rs. 2,33,169 inclusive of interest amount of Rs. 1,29,129. 18. Coming to the oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved by the CIT(A), since there was no other source of income of the assessee, the amount of Rs. 8,608 became free from tax. 21. However, this is not the issue. The assessee's challenge is on a different premise. According to the learned counsel for the assessee, in terms of a ratio of the High Court of Andhra Pradesh in the case of CIT vs. Nawab Mahmood Jung Bahadur (1988) 70 CTR (AP) 77 : (1988) 172 ITR 592 (AP), interest is taxable on accrual basis. 22. Similarly, in the case of CIT vs. Khorshed Shapoor Chinal & Ors. (1990) 84 CTR (SC) 164 : (1990) 181 ITR 400 (SC) the apex Court took the view that interest on enhanced compensation ordered by the Court accrues from the date when possession of land was taken. Further, such interest accru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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