TMI Blog2015 (10) TMI 1010X X X X Extracts X X X X X X X X Extracts X X X X ..... -03 as the same had not accrued and the same will be liable to tax only when the final award is passed by the Andhra Pradesh High Court ? Held that:- As emerges from the judgment of COMMISSIONER OF INCOME TAX , WEST BENGAL – II VS . HINDUSTAN HOUSING AND LAND DEVELOPMENT TRUST LTD [1986 (7) TMI 10 - SUPREME Court] when an assessee receives money, either under an award or by a decree of the court, or under an award passed by the arbitrator, if the amount paid to him is not in dispute, then that amount represents his income. He should offer it to tax in the previous year of the date of payment of the said amount. But if the amount due to him is in dispute and it is subject-matter of a litigation and during the pendency of the litigation, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... <![endif]--><!--[if gte mso 10]> /* Style Definitions */ table.MsoNormalTable {mso-style-name:"Table Normal"; mso-tstyle-rowband-size:0; mso-tstyle-colband-size:0; mso-style-noshow:yes; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... During the course of search, two cheques amounting to ₹ 40,00,000/- [Rupees forty lakhs only] each, in favour of M/s. Saravana Constructions, represented by its proprietor Shri. L. Sambasiva Reddy, were found. The assessee gave a detailed explanation with reference to the said two cheques. Not accepting the said explanation, the assessing authority added those amounts to the total income admitted, on the ground that the award received is in pursuance to the contract work executed by the assessee during 1983-84. The assessee preferred an appeal to the Commissioner of Income Tax (Appeals). The Appellate Authority sought for a report from the Assessing Authority, on a written submission of the assessee. After obtaining the report, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an interim order ? Reliance is placed on several judgments of the Apex Court, as well as this court. All those cases are dealing with acquisition of land and payment of compensation and the matter is pending in appeal against such orders. But the principle which emerges from a reading of the aforesaid judgment is, income tax is not levied on a mere right to receive compensation. There must be something tangible, something in the nature of a debt, something in the nature of an obligation to pay an ascertained amount. Till such time, no income can be said to have accrued. The enhanced compensation accrues only when it becomes payable, ie., when the court accepts the claim. It is also pointed out in the judgment of the Apex Court in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the arbitrator, if the amount paid to him is not in dispute, then that amount represents his income. He should offer it to tax in the previous year of the date of payment of the said amount. But if the amount due to him is in dispute and it is subject-matter of a litigation and during the pendency of the litigation, if any interim order is made for payment of the said amount, the said payment is subject to the final result of the said proceedings. In the event the assessee looses the legal battle, the amount received by way of interim payment, has to be repaid. The amount to which he is entitled to, out of the disputed amount , would crystallize only when the litigation ends and payment is made after the finality of the litigation, then th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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