TMI Blog1991 (4) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... ce thereof has to be annulled." The assessee is a company. In the year 1931, it entered into a contract with a German firm for purchase of machinery. The machinery was delivered in April, 1932. The delivery was not within the time stipulated, nor was it according to specifications. The assessee, therefore, instituted a suit against the said firm in 1935 for recovery of a sum of Rs. 2,05,000. The suit was ultimately decreed in December, 1953, for the said sum plus interest pendente lite. Though the total amount so decreed came to more than rupees three lakhs, the assessee could recover only Rs. 2,20,192 from the Custodian of Enemy Properties. This amount was received by the assessee in the previous year relevant to the assessment year 1961 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the matter for a fresh determination. The assessee carried the matter in further appeal to the Tribunal on the aforementioned first question. The Tribunal agreed with the assessee and set aside the reassessment proceedings in their entirety. It is thereupon that the present reference was obtained by the Revenue. The grounds upon which the Tribunal allowed the appeal are to be found in the following words : "There is no material in these reasons to show that any part of the amount of compensation represented the assessee's income liable to be taxed. The amount of interest was only Rs. 12,500 and this being less than Rs. 50,000 action under section 147(a) could not have been taken for this year after the expiry of more than eight years. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t a decree for Rs. 2,05,000 as compensation from the Custodian of Enemy Properties on December 15, 1953, and the interest of Rs. 12,500 (approx) became due on that date on the compensation amount. The assessee failed to disclose this in the return of income for the previous year relevant to the assessment year 1955-56. Since the assessee failed to disclose true and material facts, the income escaped assessment, and the Board's permission is, therefore, solicited under section 147(a)/150/153(3) to assess the same in the assessment year 1955-56." The accompanying letter dated January 13, 1969, referred to in the Tribunal's order, in so far as it is relevant, reads as follows: "Kindly refer to the Tribunal's order dated November 27, 1968, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Rs. 50,000 or above. In this case, the proposal submitted by the Income-tax Officer to the Board clearly says that the assessee received Rs. 2,05,000 as compensation and Rs. 12,500 towards interest thereon. The Tribunal has held that the sum of Rs. 2,05,000 constituted a capital receipt and only the interest of Rs. 12,500 constituted income (revenue receipt). It may be noted that even in the earlier assessment proceedings, there was a controversy as to whether the whole or any part of the compensation amount constituted revenue receipt. The Appellate Assistant Commissioner had opined that out of the amount received, only an amount of Rs. 91,004 constituted revenue receipt. Evidently, the Income-tax Officer has not applied his mind to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
