9911796707
TMI Blog1984 (4) TMI 15X X X X Extracts X X X X X X X X Extracts X X X X ..... year and should be spread over and taxed in the year to which the interest relates and only that part of interest which relates to the assessment year 1971-72 should be assessed in that year ?" The facts are these : Shri C. S. Angre, the assessee, was a jagirdar of the erstwhile Gwalior State. By the Madhya Bharat Abolition of Jagirs Act, 1951, the jagirs were Abolished with effect from December 4, 1952. Under section 8 of the aforesaid Act, compensation was payable to the assessee in accordance with the principles laid down in Schedule 1. Under subsection (2) of that section, the compensation payable became due as from the date of the resumption of the jagir. Simple interest was payable at the rate of 21% per annum from that date up to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the High Court. Aggrieved by the order dated January 11, 1958, of the Commissioner, Land Reforms jagirs, Gwalior, the assessee filed an appeal before the Board of Revenue of the State of M.P. The grievance of the assessee was that while determining the compensation, a deduction of Rs. 30,000 should not have been made from the gross income on account of " Tanka ". By order dated November 9, 1960, the Board of Revenue held that the amount of Rs. 30,000 was wrongly deducted by the Jagir Commissioner. When the matter went back to the Jagir Commissioner, he gave effect to the decision of the Board that the deduction of Rs. 30,000 from the gross income for the purpose of determining compensation money was wrong. The State of M.P. then p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o him to consider whether Rs. 30,000 could be deducted from the gross income for the purpose of determining the compensation money under any other head in the schedule except the head " Tanka" The High Court also held that it was no longer open to the State to urge that Rs. 30,000 was deductible on any ground other than the ground that it fell within the meaning of the word " tanka " which matter had been finally decided in favour of the jagirdar. The State of M. P. then filed an appeal to the Supreme Court and by a judgment dated January 28, 1969, in Civil Appeal No. 459 of 1966, the Supreme Court held that the High Court was right in allowing the writ petition and quashing the order of the Board of Revenue dated August 8, 1963. The ultima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to the period prior to March 19, 1964, shall be taxed in the assessment year in which this date falls ; (ii) interest income pertaining to the period after March 19, 1964, shall be taxed on accrual basis in the respective assessment years. The Revenue preferred an appeal before the Income-tax Tribunal contending that the Commissioner of Income-tax (Appeals) erred in deleting the interest on additional compensation amounting to Rs. 91,943 received by the assessee during this year. By cross-objection, the assessee submitted that the Commissioner of Income-tax (Appeals) erred in not taking the interest on compensation on accrual basis for the period prior to March 19, 1964. The Tribunal held that interest of Rs. 91,943 is liable to be spre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taxed on accrual basis or on the basis of receipt and it was held that the right of claim being statutory, it accrues from year to year and has to be assessed as such. The learned counsel for the Revenue relied on some decisions which are clearly distinguishable. Those are cases under section 28 of the Land Acquisition Act wherein interest was awarded by the court on the additional compensation determined and it has been held that interest on enhanced compensation accrued to the assessee only when the award is given by the court and the interest on enhanced compensation is in the discretion of the court and is not a statutory right. So it has to be assessed on the basis of receipt. Those cases are CIT v. Sankari Manickyamma [1976] 105 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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