1991 (2) TMI 71

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..... ing years relevant to the assessment years 1962-63 to 1970-71 ? " The short facts leading to the making of this reference are as under : (a) The relevant assessment year is 1968-69. (b) The assessee was the owner of certain land. On August 17, 1961, the said land was requisitioned by the Collector of Pune under the Bombay Land Requisition Act for rehabilitation of flood victims. Under section 8 of the said Act, the assessee became entitled to receive compensation from the authorities in lieu of the said requisition. By an order dated August 7, 1970, the Collector of Pune fixed the amount of compensation at the rate of Rs. 5,995 per annum in lieu of rental. The right to receive the amount of compensation accrued to the assessee under s .....

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..... Assistant Commissioner held that the said amount could not be so included in the income of the assessee on the ground that such yearly compensation accrued to the assessee every year, i.e., during the period commencing from August 17, 1961, to March 31, 1970. Relying upon the provisions of the Bombay Land Requisition Act, 1948, and the scheme of the Bombay Land Requisition (Determination of Compensation) Rules, the Income-tax Tribunal concluded that the said income accrued to the assessee year to year and could not be treated as income of the assessee in the year of receipt. The Income-tax Tribunal held that the rental compensation became payable to the assessee at the rate of Rs. 5,995 annually right from the previous year relevant to the .....

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..... , to March 31, 1970, was liable to be assessed as income during the accounting years relating to the assessment years commencing from the year 1962-63 onwards. There is no dispute about the facts of the case. It is not possible to accept the submission made on behalf of the Revenue that the said amount should be treated as income of the assessee during the assessment year 1968-69 when it was received by the assessee in lump sum as part payment. In CIT v. T. N. K. Govindarayalu Chetty [1987] 165 ITR 231, the Supreme Court held that interest on the compensation upon acquisition payable by the State accrued yearly and was taxable proportionately in each of the years between the date of acquisition and the date of payment. Following the ratio a .....

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