TMI Blog2003 (4) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... Colony,New Delhiwhich was mortgaged and belonged to M/s. The Table Ware Craft Cottage, Shri R.K. Goel, Shri Virender Kr. Goyel and Shri Jitender Kr. Goyel, Punjab National Bank filed suit for recovery of money which was decreed. Consequent to the passing of the decree on29-1-1981, Plot No. 7-A, Friends Colony residential schemeNew Delhiwhich was mortgaged was subjected to public auction. The assessee in these appeal before us participated in the said auction and their bid for the said plot of land was accepted by the Court auctioneer for a sum of Rs. 10,05,000. Consequent to the acceptance of the bid by the Court auctioneer, the same was confirmed by theCivil Courtin accordance with law and on2-2-1989. Sale Certificate with respect to Plot No. A-7 was issued in favour of the two assessee by the Registrar, High Court Delhi, which Court was executing the decree. It is also on the record that the issuance of the sale certificate led to the execution of the sale deed, which was duly registered with the office of Sub-Registrar Delhi on6-2-1989. 5. As far as the assessee is concerned, the issuance of the sale certificate and execution of sale deed did not put an end to the litigation b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the authorities below was that the amount received by the assessee in the manner indicated above is not at all taxable as it was a receipt by chance because at the time when they participated in the auction they could not have visualized this situation. It was the case of the assessee before the CIT(A) that the difference between the purchase price and the amount received pursuant to the orders of theApex Courtwas in the nature of the compensation only to the assessees and was thus not an income of the assessee. The case of the assessee we may say was also that the amount has been received for deprivation of use of the property. 8. The arguments put forward by the assessee did not find favour with the CIT(A) who held that the amount received by the assessee was compensation in lieu of forfeiture of their right in the said property and was, therefore, directly relatable to the investment made by the appellant. In this background the CIT(A) held that the amount received by the assessees pursuant to the orders of the Supreme Court was an income of casual and non-recurring nature falling within the meaning of section 10(3) of the Income-tax Act. With this reasoning the CIT(A) con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e relied upon by the ld. AR in case reported in 140 ITR 114 (sic), in the case of Smt. C. Kamala v. CIT [1978] 114 ITR 159 (Kar.) in case of Parimisetti Seetharamamma v. CIT [1965] 57 ITR 532 (SC), in the case of AnandBala Bhushan v. CIT [1995] 83 Taxman 548 (All.), T.N.K. Govindaraju Chetty v. CIT [1967] 66 ITR 465 (SC), J.K. Synthetics Ltd. v. O.S. Bajpai, ITO [1976] 105 ITR 864 (All.), Bawa Shiv Charan Singh v. CIT [1984] 149 ITR 29 (Delhi) and J.C. Chandiok v. Dy. CIT [1999] 69 ITD 75 (Delhi) (SB). 11. To the arguments raised by the AR, ld. DR submitted that the assessee in this case had acquired a valuable right in the property and the amount was received by the assessee was for extinguishment of the right in the property and the amount so received given any name would be liable to be taxed. Another submission of the ld. DR was that in this particular case after having obtain a sale certificate and the sale deed before the Apex Court, the assessee given a consent to relinquish his right in the property and for relinquishing that right which he has acquired from the sale certificate and sale deed, the assessee asked for a price which is paid, on the receipt of which amount th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... R. Ramanathan Chettiar v. CIT [1967] 63 ITR 458 (SC) and CIT v. Dr. P.N. Beh [1972] 84 ITR 125 (Delhi). 12. The moot question that arises for the consideration in these appeals is as to whether the assessee had acquired any right in the said property and if the answer to this question is in the affirmative, then what is the nature of that right which the assessee had acquired. 13. The other issue apart from the above is that if the answer to the aforesaid question is in the negative then the issue that would further arise for adjudication is that if the assessee had not acquired any right in the said property then whether the receipt of the sum of Rs. 10,05,000 received by the two assessee's is still liable to be taxed and if so then under which head. 14. We have heard the parties and taken ourselves through the record. This is not in dispute that pursuant to the auction by the Court in which the assessees participated they were held to be successful and their bids were accepted. Consequent to the acceptance of the bids the sale certificate and the sale deed were also executed in their favour but ultimately the sale certificate and the sale deed were set aside on account of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et and the receipt was not a capital receipt accessible to tax. 17. In view of this, the questions referred to inPara10 have to be answered in favour of the assessee and against the revenue. 18. This brings to the vital issue that in case this is not as capital receipt whether it is still liable to be taxed under any provision of the Act or not. The Sr. Ld. Counsel submitted that there is no element of income attached to the amount received as the said amount has been received for the deprivation of the use of property which the assessee was entitled to but could not do so and as a matter of gesture of goodwill from the judgment debtor whose land had been auctioned in favour of the assessee, the assessee has only received compensation, which amount is not liable to be taxed. To the said argument so raised by the ld. Sr. Counsel, Shri C.S. Aggarwal, the ld. DR submitted that if the said amount has not taken as capital receipt then the authorities below were right in bringing to tax the amount received by the assessee within the provisions of section 10(3) of the Income-tax Act. 19. Some legal precedents were cited on both sides with which we shall deal with a little later but ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... low were wrong in bringing this amount to tax under section 10(3) of the Income-tax Act. 22. In support of his contention, the ld. Sr. Counsel during the course of hearing relied upon the judgment of the Delhi High Court in the case of Bawa Shiv Charan Singh. The submission of the ld. Counsel was that in view of the ratio of this judgment the amount received by the assessee is not accessible to tax and the provisions of section 10(3) of the Income Tax Act were wrongly invoked. Another judgment of which the reliance was placed by the ld. Sr. Counsel was that the one in the case of Parimisetti Seetharamamma. This judgment was apparently cited with an idea that every receipt received by the assessee is not his income liable to the tax. The submission of the senior ld. Counsel while drawing strength from its judgment was that in case where the receipt is sought to be taxed as income, the burden lies upon the department to prove that it is within the taxing provisions. Having said so the Id. Senior Counsel further drew our attention to another judgment of the Allababad High Court in the case of Anand Bala Bhushan. 23. The judgment relied upon by the ld. Counsel for the assessee do n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the assessee. 26. The revenue has relied upon the judgment, of the Bombay High Court in the case of Kisan Mahadev Jadhav v. V.D. Wakharkar [2001] 249 ITR 265 wherein it has been held that when the source of receipt has link with business income, or salary income or capital gain chargeable under section 45 then section 10(3) will not apply. The judgment was cited by the revenue to draw support that none of the three ingredients were attracted in the present case and neither it was a business income nor a salary income nor a income from capital gain chargeable under section 45 and, therefore, provisions of section 10(3) are attracted and have rightly been applied. We find that the judgment relied upon by the revenue supports the view we are taking. 27. The word casual and non-recurring had not been defined in the Act but the ordinary dictionary meaning say that it is subject to produced by chance accidental or fortuitous or coming at uncertain time or not to be calculated on or unsettled. When we see this meaning in background of this case we feel that the parties could never expect such a happening and, therefore, this receipt can only be termed as casual receipt. As it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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