9911796707
TMI Blog1980 (1) TMI 69X X X X Extracts X X X X X X X X Extracts X X X X ..... r 1962-63 ? " The assessment year under consideration is 1962-63 (ending on March 31, 1962). The assessee owned certain lands with structures thereon measuring 17,315 sq. yards at Jaipur. This land was acquired by the former State of Jaipur in two instalments. One piece of land was acquired under s. 4 of the Jaipur Land Acquisition Act, 1943, by a notification dated August 13, 1943, and possession thereof was taken by the Government on July 23, 1945. The Land Acquisition Officer gave a cash award of Rs. 29,014-8-0 on February 5, 1944, and also recommended to the Government that another plot of land may be granted to the assessee in exchange for the land acquired over and above the cash compensation. The cash compensation of Rs. 29,014-8-0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Acquisition Officer by his award dated December 30, 1961, fixed cash compensation at Rs. 1,73,177. With regard to payment of interest the Land Acquisition Officer ordered as follows : " Interest at the rate of 4% per annum is also payable on the above amount of compensation from the date of taking possession over the land till the date of payment of compensation under section 34 of the Rajasthan Land Acquisition Act, 1953. The amount of interest, however, can be determined only after payment of the amount of compensation. " The total amount of interest at the rate of 4% per annum for the period commencing from the date of taking over possession of the two plots of land in question and the date of award, i.e., December 30, 1961, came t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowed the application, and this is how the reference has come up before this court. We have heard Mr. S. M. Mehta, learned counsel for the Commissioner at some length but have had no benefit of hearing the assessee, as he has not put in appearance in spite of service. There is no denying the fact that the award in pursuance of which interest has been allowed to the assessee on the amount of compensation for the land acquired from the assessee was made during the relevant assessment year, i.e., December 30, 1961. The contention on behalf of the revenue is that the right to receive the interest became vested in the assessee only on December 30 1961, and not when the possession of the land was taken, i.e., July 23, 1945, under the first a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st had accrued, then only such part of the total amount of interest, which accrued to the assessee during the assessment year 1962-63, could be brought into the net of taxation. In E. D. Sassoon Company Ltd. v. CIT [1954] 26 ITR 27, 51, the Supreme Court observed as follows : " It is clear, therefore, that income may accrue to an assessee without the actual receipt of the same. If the assessee acquires a right to receive the income, the income can be said to have accrued to him though it may be received later on its being ascertained. The basic conception is that he must have acquired a right to receive the income. There must be a debt owed to him by somebody. There must be as is otherwise expressed debitum in praesenti, solvendum its ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar, he shall include the said income in the assessment of the succeeding assessment year, but no power is conferred on the ITO under the Act to relate back an income that accrued or arose in a subsequent year to another year on the ground that the said income arose out of an earlier transaction. The sine qua non of liability, therefore, in the present case is a determination as to when the income by way of interest accrued to the assessee. In the case of CIT v. Ashokbhai Chimanbhai [1965] 56 ITR 42 (SC), their Lordships observed that when the right to receive the income becomes vested in the assessee it is said to accrue or arise. In other words, we have to determine in the present case, when the right of the assessee to receive interest be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. Therefore, compensation for the land acquired as also interest thereon became payable to the assessee when possession of the land was taken from him. Payability is not dependent upon quantification, though there may be no payment until quantification is final. It cannot be gainsaid that the total interest of Rs. 1,06,321 awarded to the assessee related to the accounting years commencing from the years during which possession of the lands was taken over from the assessee, and so also interest must be deemed to have accrued to the assessee in each of the years subsequent to taking over possession of the land from him. The Land Acquisition Officer instead of allowing full compensation in cash granted partly cash compensation and also certa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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