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TMI Blog2012 (3) TMI 207X X X X Extracts X X X X X X X X Extracts X X X X ..... rty had not passed on to the Government it may be said that the owner was given interest in place of his right to retain possession of the property - In such a case, the interest received would be a capital receipt. - 72 of 2000 - - - Dated:- 3-1-2012 - MADAN B. LOKUR, SANJAY KUMAR, JJ. JUDGMENT Madan B. Lokur C. J.- 1. A substantial question of law was not framed while admitting this appeal filed under section 260A of the Income-tax Act, 1961 (hereinafter referred to as "the Act"). Accordingly, after hearing the learned counsel for the parties, we frame the following substantial question of law : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer took the view that the interest received was a revenue receipt. In an appeal filed by the assessee, the Commissioner of Income-tax (Appeals) took the view that the interest received was a capital receipt. This view was upheld by the Income-tax Appellate Tribunal (for short "the Tribunal") by relying upon a decision of the Kerala High Court in CIT v. Periyar and Pareekanni Rubbers Ltd. [1973] 87 ITR 666 (Ker). 6. Feeling aggrieved, the Revenue is in appeal before us. 7. The Government may take possession of a person's land either under the provisions of the LA Act (or another statute) or by agreement with the land owner. When possession of the land is taken over by the Government under the provisions of section 16 or 17 of the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ace of his right to retain possession of the property". In such a case, the interest received would be a capital receipt. 10. Noting this distinction, the Kerala High Court held in Periyar and Pareekanni Rubber Ltd. (following Dr. Shamlal Narula and T. N. K. Govindaraju Chetty v. CIT [1967] 66 ITR 465 (SC)) that interest received by the land owner till the date of the award is a capital receipt. In that case, possession of land was taken on agreement between the assessee and the Government on November 29, 1961. The award under the LA Act was passed on August 31, 1962, and compensation with interest was paid on September 6, 1962. The Kerala High Court held for the period November 29, 1961, to August 31, 1962, the interest was a capital r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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