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TMI Blog1982 (5) TMI 113X X X X Extracts X X X X X X X X Extracts X X X X ..... h May, 1974 on acquisition of its land by the Government for purposes of Indore University. The compensation amount of Rs. 4,63,317 includes interest at Rs. 1,50,217 for the period from 26the May, 1966 to 10th May 1974. the assessee claimed that the interest is not at all taxable this year since it pertains to a period not falling during the previous year and also for the reason that such interest accrued for year to year. Holding that the assessee's contention is correct, the ITO excluded the interest from the income of the assessee. The aforesaid order of the ITO was sought to be revised by the CIT as according to him, the aforesaid order passed by the ITO dt. 23rd June 1979 under s. 143(3)/144-B is erroneous in so far as it is prejudicia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in question was duly considered by the ITO/AAC at the time of the assessment proceeding; (e) That the decision of the M.P. High court in the case reported in (1981) 127 ITR 650 (MP) referred to in the notice under s. 263 is distinguishable on facts. Moreover, that the case is sub-judice before the supreme Court; (f) That without prejudice to the above, the interest accrued from day-to-day although there are differing judgments of the different High Courts on the issue; (g) That when there is conflict of precedents, i.e., two rival views, the Supreme Court decision in the case of CIT vs. Shahazada and Sons (1966) 60 ITR 392 (SC) be relied upon. The CIT after considering the contentions made by the ld. counsel for the assessee, passed an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be spread over. The ld. counsel for the assessee, therefore, argued before us that the point in dispute, namely, that the interest accrues from day-to-day and cannot be subject to tax in one year has been dealt with by both the ITO as well as the AAC in detail and they came to the conclusion that the contention of the assessee is correct and then only, the ITO found that the interest income accrues from day-to-day and cannot be subject to tax in one year, i.e. the year of receipt. He further relied on the decision of the Bench of the Tribunal in the case of M/s Ratlam Coal Ash Co. vs. ITO, A-Ward, Ratlam in ITA NO. 87/Ind/1980 for the asst. yr. 1976-77 and also on the decision of the Jabalpur Bench in ITA No, 116/Jab/1980 in the case of D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e argued that the order of the ITO is merged in the order of the IAC and therefore, the CIT is not competent to revise the aforesaid order passed by the ITO. He further relied on the decision of the Gujarat High Court in the case of CIT vs. Ahmedabad Mfg. and Calico printing co. Ltd., report in (1981) 20 CTR (Guj) 87: (1981) 128 ITR 671 (Guj) where their Lordships of the Gujarat High Court have held that the Tribunal was right in law in holding that the Addl. commissioner was not competent to pass the order in revision regarding the item of Rs. 6,43,500 on the ground that at the time of the reassessment the question of interest payment to B & L. Ltd. was processed by the ITO. Through there was no specific mention or discussion about the ite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by the CIT under s. 263, it is clear that he came to the conclusion that the order of the ITO is erroneous after the decision of the M.P. High Court in the case of CIT vs. H.H. Maharajha Yashwant Rao Pawer, Dewas (1981) 127 ITR 650 (MP), there their Lordships have held that the right to receive interest on additional compensation was acquired by the assessee only when such interest was awarded by the court on the enhanced amount of compensation and that he had no right before passing of such a decree. The aforesaid judgment was pronounced by the High Court of M.P. On 5th Dec., 1979 whereas the assessment order which was sought to be revised by the CIT was passed by the ITO on 23rd June, 1979. From the aforesaid fact, it is very clea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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