TMI Blog1982 (2) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... that the entire amount of interest accrued on the day the Civil Court awarded higher compensation to the assessee, it could not be assessed for the asst. yrs. 1976-77 since the judgment was given on 26th March 1974 which fell within the previous year relevant to asst. yrs. 1975-76. (3) There was a partition in the HUF and as such the entire amount could not be assessed in the hands of the HUF but in the hands of the various coparceners. (4) Levy of interest u/s 215 was not called for. 2. The facts of the case are as follows : The HUF of Takhatmal Shrivallabh was in possession of 17 acres and 38 Gunthas of Agriculture land bearing Survey No. 32/1-A and 32/2 at Shegaon Village in the Tehsil and District of Amravati. The land was compu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation to the tax amount in the asst. yrs. 1976-77 since the assessee actually received the amount on 10th June 1975. 2.2. Another claim of the assessee before the ITO, and IAC was that the original compensation of Rs.61,594 received in 1968 as well as right to receive additional compensation the claim for which was pending before the Civil Judge were partitioned on 10th November 1973. The ITO had passed the partial partition order u/s 171 with respect to the amount of Rs. 61,594 in connection with the asst. yrs. 1975-76. Another order u/s 171 was passed on 10th June 1975 in respect of the total sum of Rs.3,39,420 awarded by the Civil Judge. In was contended that what the ITO had done was wrong and only one order was sufficient. The order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es below. The first point sought to made out by him is that in the absence of a final decision in the matter of compensation nothing could be said to have accrued to the assessee. The withdrawals by the assessee of sum of Rs. 3,47,608.85 was provisional and was allowed only on the furnishing of adequate security. In support he relied on the decisions of the Calcutta High Court in the case of CIT, West Bengal vs. Hindustan Housing and Land Development Trust Ltd. (1977) 108 ITR 380 (Cal). The second point urged was on the accrual of interest if any took place on 26th March 1974, the day on which the Civil Court gave the decision. This did not fall within the previous year relevant to the assessment year. Lastly it was urged the ITO had given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion was determined much later and interest was awarded by the Judgment of the Civil Court on 26th March 1974. We do not see anything on record to hold that the assessee had changed over to the Cash System . The assessee s representative has filed before us extracts of journal entries for various year. We find that the house rent has been credited and tenants have been debited. The Profit Loss account and the balance-sheet maintained do not indicated that the assessee is following the cash system of accounting. 6. We are, therefore, inclined to agree with the assessee that the statement in the return for 1976-77 that the assessee was following the cash system of accounting was only a mistake arising out of carelessness in not striking o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... course, the entries could be passed only in respect of Rs. 61,594 as that was the amount which the assessee had received by that time. The actual division of the balance amount could be done only in 1975. Looking to the circumstances of the case the entries passed on 10th November 1973 relates to the division of the right to receive compensation. This has been made clear by the narration in the Cash Book: "While partitioning it has been agreed by the members that the amount that will be received on decision of the Court reference over and above the referred amount will be divided between the members equally will i.e. 1/3rd each after deducting the Court expenses. At that time we will divided the amount and shall pass necessary entries in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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