9911796707
TMI Blog1979 (6) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... acquisition proceedings, the assessee got compensation damages and statutory allowance in all to the extent of Rs. 3,57,026. Before the ITO the assessee made two claims. One is that the entire compensation is exempt under s.54D of the IT Act and in the alternative the assessee claimed a deduction of Rs. 1 lakh having been the amount paid to a tenant, M/s V.S.T. Sons, who were in occupation of a portion of the land acquired in having Petrol Pump there. The ITO negatived both the claims and this was confirmed by the AAC. Hence the appeal by the assessee. 3. At the time of hearing before us, the learned counsel for the assessee did not press its claim for relief under s. 54 D of the Act as some of the conditions therein are not fulfilled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t that the following observations in the case reported in AIR 1930 Bombay 592: "It would therefore appear from the decided cases, as well as from the rule of Justice, equity and good conscience, that where a land has been taken by Government and compensation has been paid to a party who has received more that his own share of the compensation, he must account to the other party, that is, if the landlord received the whole amount and the tenant has not got any portion of the compensation, the landlord is bound to abate the rent. On the other hand, if the tenant receives the whole of the compensation without paying the share due to the landlord, he is not entitled to retain the whole compensation and refuse to pay the whole of the rent". ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt had agreed to withdraw the claim before the Land Acquisition Officer on an understanding that a reasonable compensation will be given to the tenant. It is as per such understanding that the assessee is stated to have paid Rs. 1 lakh to the tenant. 8. The ITO had proceeded on the basis that such claim was made to divert the funds of the company in order to avoid taxation at a higher rate. We are unable to agree with such reasoning of the ITO. Since under the Land Acquisition Act and as per decision in AIT 1930 Bombay 592 the tenant is entitled to compensation in respect of the acquired property the assessee is bound to pay a reasonable amount as compensation. No doubt, the tenant had claimed a large sum namely Rs. 2,95,820 as compensat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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