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TMI Blog2006 (9) TMI 91X X X X Extracts X X X X X X X X Extracts X X X X ..... nch, raising the following common substantial questions of law: "1. Whether on the facts and in the circumstances of the case the Income-tax Appellate Tribunal is right in law in holding that in acquisition proceedings of land belonging to the assessee made by the State Government, the amounts received as per interim conditional orders of the Court when the appeal by the State objecting to the enhancement of compensation was pending were liable to tax ? 2. Whether on the facts and in the circumstances of the case, Section 45(5)(c) of the Income-tax Act inserted by the Finance Act, 2003 w.e.f. April 1, 2004 is applicable for the assessment years 1997-98 and 1998-99 ? 3. Whether on the facts and in the circumstances of the case the Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 97-98 and 1998-99 under section 147 of the Income-tax Act and made reassessments bringing to tax the amounts received by the assessees as per interim directions of the Calcutta High Court as additional compensation assessable as capital gains under section 45(5)(b) of the Income-tax Act. 5. The Commissioner of Income-tax (Appeals) dismissed the appeal filed by the assessees. On further appeal, the Appellate Tribunal upheld the order of the Commissioner of Income-tax (Appeals). Hence, the present appeal. 6. The primary issue that arises in all the appeals is as to the taxability of compensation received pending appeals before the Calcutta High Court. It is not in dispute that pending the appeals filed against the award of compensat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with in the following manner, namely:-- (a) the capital gain computed with reference to the compensation awarded in the first instance or, as the case may be, the consideration determined or approved in the first instance by the Central Government or the Reserve Bank of India shall be chargeable as income under the head "Capital gains" of the previous year in which such compensation or part thereof, or such consideration or part thereof, was first received; and (b) the amount by which the compensation or consideration is enhanced or further enhanced by the court, tribunal or other authority shall be deemed to be income chargeable under the head "Capital gains" of the previous year in which such amount is received by the assessee. (c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itional compensation awarded by the civil court had not been accepted by the State Government and it has preferred an appeal objecting to the enhancement. Hence, the additional compensation received, could not be treated as part of the compensation received for the transfer of the land until it is finally determined by the High Court or Supreme Court. If the appeal of the State is allowed, the assessee is bound to refund the amount and hence, the same cannot be assessed before reaching finality. The right to receive additional amount awarded by the court as part of the compensation, was only an inchoate right during the pendency of the matter before higher judicial forums. In such circumstances, the disputed compensation has to be assessed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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