9911796707
TMI Blog2006 (9) TMI 353X X X X Extracts X X X X X X X X Extracts X X X X ..... y denies his liability to pay tax, interest demand thereon. 2. That having regard to the facts and circumstances of the case, learned CIT (Appeals) has erred in law and on facts by not quashing the impugned assessment framed under section 147, more so when statutory conditions prescribed were not complied with. 3. In any view of the matter and in any case, impugned assessment order passed by learned Assessing Officer is without jurisdiction and hence void and nullity and is not sustainable. 4. That having regard to the facts and circumstances of the case, learned CIT (Appeals) has erred in law and on facts in upholding the validity of the impugned assessment upon the appellant. 5. That having regard to the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the Punjab Haryana High Court, at the instances of the Haryana Government through the LAO, Gurgaon and the assessee along with other persons of village Sukhrali. Ultimately, at the intervention of High Court, the enhanced compensation together with interest of Rs. 29,69,570 was paid to the assessee by HUDA on 26-10-1996 and 16-3-1998. The total amount of interest of Rs. 29,69,570 was paid on two occasions i.e., Rs. 25,26,944 on 26-10-1996 and Rs. 4,42,626 on 16-3-1998 falling respectively in the assessment years 1997-98 and 1998-99. In the assessment year 1998-99, i.e., the year under consideration, the Assessing Officer taxed the entire interest income of Rs. 4,42,626 on receipt basis. 3. By the impugned order, CIT (Appeals) co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Land Acquisition Act, 1894. The land acquisition proceedings begin with issue by Land Acquisition Officer (normally Collector) a public Notification under section 4 of the Land Acquisition Act, 1894 ( LA Act ) proposing to acquire some particular land for public purpose. As per this, objections of land holders are invited under section 5A of the said Act. Thereafter the Collector conducts summary enquiry and submits his report/recommendations to the Government. After considering the report, the Government issues declaration under section 6 of the LA Act to the effect that the specified land is needed for public purpose. The Notification for acquisition of land is issued under section 9 of the LA Act by Collector inviting claims of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Act is liable to be included in the income of the respective years falling in between the year of dispossession of land to the year of actual payment. Even though such interest is paid in lump sum, the same is liable to be spread over to the years to which such interest pertains, on the unpaid amount of compensation and cannot be included in entirety in the year of actual payment. 6. With regard to taxing interest income, we are of the view that income is liable to be taxed under the Income-tax Act on the basis of its accruing or arising to the assessee, or on the basis of its receipt by the assessee, during the relevant previous year. The words "accrue", "arise" and "is received" are not synonymous. 7. The expression "is receiv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d, it is payable to the assessee like any other interest on debt. Such an interest does not accrue from the date of the decree of the court. It falls to be calculated and paid from the date of dispossession till payment. It is payable in each successive year and is liable to be assessed in that year itself. The assessment of that accrued interest cannot be postponed till it is actually paid to the assessee. The Income-tax Act does not confer upon the Income-tax Officer the power to assess an income accrued in one year as the income of an earlier or subsequent year. The attribution of the whole of the interest to the year of receipt is not, therefore, possible. 8. Now, we come to the contention of the assessee with regard to taxing of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year in which it has accrued and no adverse inference can be drawn from the fact that the returns for earlier assessment years were not filed. 11. Further-more, Hon ble Supreme Court in the case of K.S. Krishna Rao v. CIT [1990] 181 ITR 408 held that interest on enhanced compensation accrues year after year right from the date of delivery of possession till the date of order of the court on time basis. The same cannot be taxed all in lump sum on the date on which the court passes orders for enhanced compensation. Thus only proportionate interest was assessable in the relevant assessment year. It was further held that even where assessee was following cash system of accounting, interest income was held to accrue from year to ye ..... X X X X Extracts X X X X X X X X Extracts X X X X
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