9911796707
TMI Blog2010 (9) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... in his place. Reference in this judgment will, however, be made by indicating assessee only. 2. In this reference filed under section 256(1) of the Income-tax Act, 1961 (for short "the Act'") the Income-tax Appellate Tribunal, Amritsar Bench Amritsar, (in short "the Tribunal") vide order dated March 26, 1999, passed in Reference Application No. 142(ASR)/1998 arising out of I. T. A. No. 242(ASR/1992) at the instance of the Revenue, in respect of assessment year 1985-86, has referred the following question of law, for the opinion of this court : "Whether on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in not upholding the assessment of enhanced compensation and interest received by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 89,678 on account of capital gain on the basis of the enhanced compensation received on May 28, 1984 could not be sustained. The Commissioner of Income-tax (Appeals) accordingly deleted the addition made by the Assessing Officer. So far as the objection raised on behalf of the assessee that notice under section 148 of the Act was invalid, the Commissioner of Income-tax (Appeals) held that the same was not sustainable in law in view of the provisions of section 292B of the Act. 4. The Revenue filed appeal before the Tribunal. The Tribunal also did not agree with the submissions made by the Revenue and accordingly dismissed the appeal vide order datedJuly 30, 1998. 5. We have heard learned counsel for the petitioner and have perused the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... point that is to be adjudicated is whether the subsequent amount which has been received in later year by the assessee as enhanced or additional compensation would be taxable as capital gains relating to the year of acquisition/transfer of capital asset, i.e., the assessment year 1972-73 or in the year of receipt, viz. the assessment year 1985-86. 11. Learned counsel for the Revenue referred to the provisions of section 45(5)(b) of the Act read with Explanation (ii) thereto, and in the alternative section 155(7A) of the Act so as to bring the case of the assessee regarding receipt of enhanced compensation chargeable to capital gains tax. 12. We do not find any force in the contention of the learned counsel. 13. Section 45(5)(b) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mApril 1, 1998. The assessee would not be covered under this provision as the assessment year involved is 1972-73 and further the assessee had not filed any return for the said year which could be rectified. Therefore, the enhanced compensation would not be exigible to tax either in the year of receipt, i.e., the assessment year 1985-86 or in the year of acquisition/ transfer of capital asset i.e., the assessment year 1972-73. 15. Adverting to the second limb regarding interest, it may be noticed that there are two types of interest. One is awarded under section 28 of the Land Acquisition Act, 1894 (in short "1894 Act") and the other is under section 34 of the 1894 Act. In so far as interest under section 28 of the 1894 Act is concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld employ for the part of the transactions or events different system of accountancy relating to one source of income. 18. However, the amendment of section 145 of the Act by the Finance Act 1995 with effect fromApril 1, 1997relating to assessment year 1997-98 and subsequent years shall not affect the decision of the present case. 19. In case, the assessee was following mercantile/accrual basis, the same would be discernible from earlier years returns where the assessee would have shown the income on account of interest that might have accrued in those years. Otherwise, it shall be treated that cash/receipt basis is the only method which is being adopted by the assessee. Even under the hybrid system of accountancy, the assessee is r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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