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2014 (9) TMI 587 - SC - Income TaxIncome from inherit property - Status of three brothers - Individual status or Association of persons (AOP) - the property in question which was acquired by the Government, came to the respondents on inheritance from their father i.e. by the operation of law. - interest income due to compulsorily acquiring the said land - Held that:- the case is squarely covered by the ratio of the judgment laid down in Meera & Company [1997 (3) TMI 6 - SUPREME Court] inasmuch as it is not a case where any “Association of Persons” was formed by volition of the parties for the purpose of generation of income. This basic test to determine the status of AoP is absent in the present case. - Decided against the revenue. Spread of interest over the years - taxability of the interest on enhanced compensation - Held that:- This issue is covered by judgment of this Court in Commissioner of Income Tax, Faridabad vs. Ghanshyam (HUF) [2009 (7) TMI 12 - SUPREME COURT], albeit, in favour of the Revenue. In that case, the court drew distinction between the “interest” earned under Section 28 of the Land Acquisition Act and the “interest” which is under Section 34 of the said Act. The Court clarified that whereas compensation given to the assessee of the land acquired would be 'income', the enhanced compensation/consideration becomes income by virtue of Section 45(5)(b) of the Income Tax Act. - it would be taxed in the year in which it is received. It would mean that converse position i.e. spread over of this interest on accrual basis is not permissible. - Decided in favor of revenue.
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