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TMI Blog2010 (12) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... oviding for refund of excess tax and after this provision, it was found no reason for postponing the liability for the amount received by the assessee - Since the amount of enhanced compensation and interest thereupon is held to be assessable in the asst. yr. 2002-03, in which it is received, the same amount shall not be again included in the other assessment year on protective basis - Decided in favour of the assessee by way of remand to AO X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of CIT vs. Ghanshyam (HUF) (2009) 224 CTR (SC) 522 : (2009) 26 DTR (SC) 129 : (2009) 315 ITR 1 (SC), where the Supreme Court has held that enhanced compensation is liable to be taxed in the year in which the payment was received. The Hon'ble High Court has remanded the matter to the Tribunal to re-examine the matter in the light of the aforesaid judgment of Hon'ble Supreme Court in the case of Ghanshyam (HUF) (supra). Therefore, these appeals are being disposed of afresh by us. 4. Notice of hearing was sent to the assessee fixing the date on 11th Nov., 2010 but nobody for the assessee has appeared. Since the matter is now covered by the decision of Hon'ble Supreme Court and since no one was present for the assessee, we pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 28th March, 2002 in respect of LAC No. 183 of 2000 has been assessed under the head "Capital gain" and the interest of Rs. 94,40,522 received thereupon has been assessed under the head "Income from other sources". Thus, the total capital gain assessed by the AO amounted to Rs. 2,63,56,375 (i.e., Rs. 76,49,585 + Rs. 1,87,06,790). The aggregate interest income assessed under the head "Income from other sources" thus, comes to Rs. 1,12,43,427 (i.e. Rs. 18,02,905 + Rs. 94,40,522). In this manner, the total income was assessed by the AO at Rs. 3,75,99,800. 6. In the return of income filed originally the assessee did not offer the amount of Rs. 76,49,585 being compensation amount received in LAC No. 77 of 1999 to tax on the ground that the matt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t on compensation in asst. yrs. 1999-2000 to 2001-02 is as under:- Asst. yr. Amount 1999-2000 Rs. 20,81,608 2000-01 Rs. 33,63,320 2001-02 Rs. 34,99,440 7. On an appeal, the learned CIT(A) deleted whole of the additions after following the decision of Hon'ble Punjab and Haryana High Court amongst others in the case of CIT vs. Prem Singh (IT Appeal No. 695 of 2005 decided on 16th May, 2007, where the Hon'ble Punjab and Haryana High Court had taken a view that until and unless the compensation on the agricultural land and the interest thereon attain a finality, they cannot be calculated or assessed for taxation. The learned CIT(A) has also taken a view that it was evident to him that the trees bearing fruits amount to Orchard on the b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 45(5) and s. 155(16) of the IT Act, 1961, is this. Sec. 45(5) was inserted w.e.f. 1st April, 1988, as an overriding provision. Since compensation under the Land Acquisition Act, 1894, arises and is payable in multiple stages, the legislature stepped in and said that as and when the assessee-claimant is in receipt of enhanced compensation it shall be treated as 'deemed income' and taxed on receipt basis. Hence, the year in which enhanced compensation is received is the year of taxability. Consequently, even in cases where pending appeal, the Court/Tribunal/authority before which the appeal is pending, permits the claimant to withdraw against security or otherwise the enhanced compensation (which is in dispute), the same is liable to be taxed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest under s. 34." 8. In this judgment, the Hon'ble Supreme Court has distinguished its earlier decision in the case of CIT us. Hindustan Housing and Land Development Trust Ltd. (1986) 58 CTR (SC) 179 : (1986) 161 ITR 524 (SC) with reference to the provision under s. 155(15) providing for refund of excess tax and after this provision, it was found no reason for postponing the liability for the amount received by the assessee. The Hon'ble Supreme Court has taken a view that the additional compensation received by the assessee is to be assessed in the year in which it is received. The Hon'ble Supreme Court in this case also held that interest on enhanced compensation under s. 28 of the Land Acquisition Act will form part of the enhanced ..... X X X X Extracts X X X X X X X X Extracts X X X X
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