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TMI Blog1967 (8) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... tionate interest referable to the assessment year 1962-63 was assessable in that year ? This is how the question arises: By a notification made on January 13, 1948, under section 4 of the Land Acquisition Act, a land owned by the assessee measuring 20,000 square yards was proposed to be acquired, and on February 19, 1949, possession was taken. The Land Acquisition Officer of the Corporation of the City of Bangalore made an award on June 2, 1949, by which he determined the compensation payable to the assessee to be a sum calculated at Rs. 2 a square yard. He also gave him the usual statutory allowance. This sum of money aggregating to Rs. 46,000 was paid to the assessee only on December 31, 1949. But there was a reference to the District J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pital receipt. So, the sum of Rs. 87,265, which represented the interest paid to the assessee by the Land Acquisition Officer, was taxed as a revenue receipt. The appeal preferred by the assessee to the Appellate Assistant Commissioner was dismissed, but, in the further appeal, the Income-tax Appellate Tribunal took the view that the interest paid to the assessee was taxable income, but that only so much of it which was payable during the relevant previous year could be taxed in the assessment year 1962-63. It said this : " In each successive year after February 19, 1949, the assessee acquired the right to receive the interest for that year. Although the amount of interest that was payable to the assessee was only determined in 1961, after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsation really claimable which denuded the High Court decrees of the attribute of finality, and the argument was constructed that the right to compensation and the interest thereon did not accrue until there was their quantification by the Land Acquisition Officer on the basis of the decisions in those appeals. The proposition that the accrual of that right stood so postponed cannot be sound. When the Land Acquisition Officer made his award and possession was taken, he became liable under section 34 of the Land Acquisition Act to pay interest on the amount awarded if it was not paid when possession was taken. Similarly, when the compensation was enhanced by the district judge and again by the High Court and there were directions for payme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the right to recover such interest at least on the date of that decree. Then again, when compensation was further enhanced by the former High Court of Mysore which made a similar direction for the payment of interest on such enhanced compensation, all that interest which that amount so earned from February 19, 1949, became immediately due and payable under an executable decree. It is difficult to understand how the pendency of the appeal before the Supreme Court could arrest the accrual of that income. It did not. It is admitted that during the pendency of the appeals before the Supreme Court, there was no stay of execution. Even if there was, its impact on accrual is debatable. So, the premise that the right to no part of the interest wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was thatwhich emerges from the decision of the Supreme Court in E. D. Sassoon & Company Ltd. v. Commissioner of Income-tax, in which it was observed : " ' The computation of the profits whenever it may take place cannot possibly be allowed to suspend their accrual. . . .' What has however got to be determined is whether the income, profits or gains accrued to the assessee and in order that the same may accrue to him it is necessary that he must have acquired a right to receive the same or that a right to the income, profits or gains has become vested in him though its valuation may be postponed or though its materialisation may depend on the contingency that the making up of the accounts would show income, profits or gains." This enunci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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