9911796707
TMI Blog2011 (2) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal has been filed at the instance of the revenue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against the order dated 27.2.2006 passed by the Income Tax Appellate Tribunal, Chandigarh Bench "B", Chandigarh in ITA No. 296/Chandi/ 2005, relating to the assessment year 1998-99, claiming the following substantial question of law:- "Whether on the facts and circumstances of the case, the ITAT is right in law in restoring the issue back to the file of CIT(A) for fresh decision after the receipt of final compensation award and interest thereon, when the assessee itself had disclosed income on the subject interest in the return of income and whether the Assessing Officer has to wait till the final disposal by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder of the CIT(A), the revenue approached the Tribunal who vide order dated 27.2.2006 restored the matter to the CIT(A) for fresh decision after the receipt of the final award and interest thereon. This gave rise to the revenue to approach this Court by way of instant appeal. 4. We have heard learned counsel for the revenue. 5. The point for consideration in this appeal is whether the amount received by the assessee in pursuance of an award of the Arbitrator which had not attained finality being still under challenge before a Court would be exigible to tax. 6. The Tribunal by relying upon the decision of the Apex Court in Commissioner of Income Tax v. Hindustan Housing and Land Development Trust Ltd. [1996] 161 ITR 524 had held t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount in the event of appeal being allowed, treating the dispute to be real and substantial. The apex Court held that in such a situation no absolute right to receive the compensation at that stage had accrued to the assessee and, therefore, extra amount of compensation of Rs.7,24,914/- was not income accruing or arising to the assessee. The assessee had been following mercantile system and in those facts, the Hon'ble Supreme Court held it not to be an accrual or arising of income. 10. Applying the aforesaid principles to the present case, where admittedly assessee is following the mercantile system of accountancy, the income shall accrue or arise to the assessee on finalization of the lis and therefore, no infirmity or illegality is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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