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TMI Blog1992 (6) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... sition Act and the petitioner was being paid compensation for the same. A total of 361.256 acres were acquired during the period 1974-75 to 1980-81. On April 2, 1991, the respondent issued a notice under section 34 of the Agricultural Incometax Act, 1950, copy of which is annexure-B, proposing to cancel the petitioner's assessment for the year 1981-82 and to remit it back to the Assessing Officer on the ground that the compensation received by the petitioner for the acquisition of the said 361.256 acres has not been included in the assessment. In response to annexure-B notice, the petitioner filed objections, copy of which is annexure-C. But the respondent, by order dated July 12, 1991, a copy of which is annexure-D, remitted the matter to the Assessing Officer for fresh disposal. The said order is challenged in this revision. Annexure-B states that as per the decision in CIT v. All India Tea and Trading Co. Ltd. [1978] 113 ITR 545 (Cal), compensation paid for requisitioned land used for agricultural purpose is agricultural income. In the first paragraph in annexure-B, it is stated : ...... On further verification, it is seen that an extent of 361.256 acres of agricultural land ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt in the petitioner's hands. Consequently, the same is not revenue for the purpose of being assessed to agricultural income-tax. According to the petitioner, since the very basis for the issue of annexure-B is vitiated, annexure-D cannot be sustained. A reading of annexures-B and D would reveal that the amount in question was received by the petitioner towards compensation for the land acquired by the State. Now, annexure-A for the year 1981-82 is sought to be reopened on the ground that the amount which was received as compensation for the acquired land was not adjusted in the accounts. The case is that as per the decision in All India Tea and Trading Co. Ltd.'s case [1978] 113 ITR 545 (Cal), such compensation received by the assessee is agricultural income in his hands. Annexure-D contains a further case that no evidence was tendered to show that no part of the compensation represents cost of agricultural produce or crops. Then it is stated : "So also, if the land is put to agricultural purposes any more after the handing over of the property even though the ultimate intention is for another purpose, any amount which represents the use of land for agricultural purposes represe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undamental distinction between the case in All India Tea and Trading Co. Ltd. [1978] 113 ITR 545 (Cal), and the case in hand. Whereas, in All India Tea and Trading Co. Ltd.'s case [1978] 113 ITR 545, the land was only requisitioned, in this case, admittedly, the land in question was acquired. Under the law, requisition and acquisition are different resulting in different consequences. In the decision in Jiwani Kumar Paraki v. First Land Acquisition Collector, AIR 1984 SC 1707, the distinction between requisition and acquisition was considered. The meaning of requisition mentioned in Stroud's Judicial Dictionary at page 2355 is referred to ; the same reads (at page 1712) : " Requisitioning' is not a term of art and has different meanings. Its usual meaning is nothing more than hiring without taking the property out of the owner although the owner has no alternative whether he will accept the proposition of hiring or not. It may, however, involve the taking over of the actual domination of a chattel (The Steaua Romana (1944) at page 43)." It is further observed (at page 1712): "Thus, normally the expression 'requisition' is taking possession of the property for a limited peri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her the value of the trees in the property acquired can be separately dealt with to ascertain the character of the compensation received on acquisition. Normally, on acquisition, the title of the property inclusive of whatever is attached to it would also pass to the State. In the context, in ascertaining the nature of the compensation, the land and the trees standing thereon should be dealt with as a composite unit. This court, in the decision in CIT v. Alanichal Co. Ltd. [1986] 158 ITR 630, held (headnote) : "Standing timber is very much immovable property as the land itself. The trees, until they are cut and removed, form an integral part of such land. Trees being things attached to the earth, together with the, earth to which they are attached constitute one asset, viz., the land. When the land with the standing trees is transferred, the sale is an integral one in respect of that asset only and it cannot involve a separate sale of the trees as a distinct asset. A bifurcation of the asset can happen only when the trees are sold separately for being cut and removed while the right over the soil is retained by the owner. Where the land is agricultural land and it is sold along w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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