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TMI Blog1989 (11) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... was published on May 14, 1964, in the Gazette. Possession was taken by the Government between October 27, 1964, and November 7, 1964. The Special Deputy Collector, Land Acquisition, awarded compensation of Rs. 21,075, solatium of Rs. 3,161 and interest of Rs. 1,004, in all amounting to Rs. 25,240, as per his award dated November 20, 1965. The assessee being aggrieved by the amount of compensation awarded sought for a reference under section 18 of the Land Acquisition Act and the matter came up before the Second Addl. Chief Judge, City Civil Court, Hyderabad (Registered as 0. P. No. 141 of 1966). The court, while disposing of the reference under section 18, awarded compensation of Rs. 2,04,007 and solatium of Rs. 30,600. It is thus found that the assessee got enhanced compensation to the extent of Rs. 2,34,607. Interest to the extent of Rs. 37,529 was also awarded on the enhanced compensation. The order of the City Civil Court was confirmed by the High Court of Andhra Pradesh in the appeal filed by the State Government in C. C. A. No. 13 of 1968, by the judgment of the High Court dated October 26, 1970. The Income-tax Officer, while making the assessment for the assessment years 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed that there is no conflict between the two and that the point is covered by S. Manickyamma's case [1976] 105 ITR 172. On behalf of the assessee, it was also pointed out that other High Courts have taken a different view. They are (i) Punjab and Haryana High Court in the case of CIT v. Dr. Sham Lal Narula reported in [1972] 84 ITR 625 ; (ii) Madras High Court in the case of T. N. K. Govindarajulu Chetty v. CIT reported in [1973] 87 ITR 22 ; and (iii) Orissa High Court in the case of Joyanarayan Panigrahi v. CIT reported in [1974] 93 ITR 102. The Tribunal observed that the above decisions support the contention of the assessee. Nevertheless, the Tribunal, being bound by the decision of the Hon'ble Andhra Pradesh High Court, held that the assessee's contention should be rejected and the entire interest on enhanced compensation was liable to be taxed for the assessment year 1968-69. Consequently, the appeal of the assessee for the assessment year 1968-69 was dismissed. The appeal of the Revenue for the assessment year 1967-68 was also dismissed. On the above facts, we are of the opinion that the following question of law arises out of the order of the Tribunal : "Whether, on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt under section 18 of the Land Acquisition Act. These references were numbered as 0. P. No. 325 of 1965 and 0. P. No. 364 of 1965 in the Court of the Second Additional Judge, City Civil Court, Hyderabad. By order dated October 30, 1967, the City Civil Court enhanced the compensation to Rs. 6,000 per acre and also directed payment of solatium at 15% on the enhanced compensation besides interest from the date of possession to the date of payment. Aggrieved by the enhancement directed by the City Civil Court, the Government filed appeals bearing C.C.CA. Nos. 135 of 1965 and 136 of 1965 to the High Court. Cross appeals were also filed by the applicants claiming that the enhancement directed by the City Civil Court was not adequate. These cross appeals were numbered as C.C.A. Nos. 123 of 1968 and 157 of 1968. While the above appeals were pending in the High Court, the Government paid the enhanced compensation to the applicants as per the order of the City Civil Court. The amount paid was Rs. 25,48,960 which included interest of Rs. 5,05,870. It was received by the applicants on April 25, 1970. On the ground that the interest payable on the enhanced compensation accrued or arose to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) Joyanarayan Panigrahi v. Commissioner of Income-tax [1974] 93 ITR 102 (Orissa) ; and (iv) Commissioner of Income-tax v. Sampangiramaiah [1968] 69 ITR 159 (Mysore). The Tribunal, however, felt bound by the Andhra Pradesh High Court decision in Sankari Manikyamma's case [1976] 105 ITR 172, and, accordingly, upheld the orders of the Appellate Assistant Commissioner. On the above facts, we are of the opinion that the following question of law arises out of the order of the Tribunal, viz.: "Whether, on the facts and in the circumstances of the case, the interest received by the assessees as per the City Civil Court's award for the period commencing from the date of possession till March 31, 1968, was entirely assessable for the assessment year 1968-69?" Since there is a conflict of views among the different High Courts in the matter, we think it is expedient to refer the above question of law direct to the Honourable Supreme Court of India as per the provisions of section 257 of the Income-tax Act, 1961. We may mention that, on the same issue, a direct reference to the Supreme Court is being made in R. A. No. 259/Hyd of 1974-75, but since the question arises quite often and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals before us (Civil Appeal No. 810 of 1974 and Civil Appeal No. 3027 of 1988) have to be allowed and the references made under section 257 (Tax Reference Cases Nos. 3 of 1976 and 1 to 3 of 1978) have to be answered by saying that the question of accrual of interest will have to be determined in accordance with the above decision of this court. The effect of the decision, we may clarify, is that the interest cannot be taken to have accrued on the date of the order of the court granting enhanced compensation but has to be taken as having accrued year after year from the date of delivery of possession of the lands till the date of such order.
These matters are disposed of accordingly. There will be no order as to, costs.
Civil Miscellaneous Petitions Nos. 14921-25 of 1978 in C. A. No. 810 of 1974 : The petitions have already been allowed and we have also heard Sri T. A. Ramachandran, Senior Advocate, appearing for, them. No further orders are necessary on these petitions.
Civil Miscellaneous .Petition No. 11123 of 1973 in C. A. No. 810 of 1974 : We have been informed that the vakalatnama has since been filed. No further order is necessary on this petition. X X X X Extracts X X X X X X X X Extracts X X X X
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