TMI Blog2015 (10) TMI 1898X X X X Extracts X X X X X X X X Extracts X X X X ..... This is an appeal filed by the assessee directed against the order of CIT(Appeals)-XXVI, New Delhi for the assessment year 2009-10. 2. Facts of the case are that the assessee is an individual and filed his return of income for the AY 2009-10 on 30.7.2009 declaring an income of ₹ 45,86,530/- The case was processed u/s 143(1). Later on, the assessee revised his return of income, declaring a total income of ₹ 6,73,55,350/- on 30.9.2009. The reasons for revising the return of income were stated by the assessee that, while filing the original return of income, long term capital gain, amounting to ₹ 7,09,00,039/- and a part of income from other sources amounting to ₹ 3,90,84,891/- were not declared. Thereafter, the case was selected for scrutiny under CASS and statutory notice u/s 143(2) dated 21.8.2010 was issued and duly served upon the assessee. Thereafter fresh notices u/s 142(1) of IT Act along with a questionnaire was issued and served upon the assessee. In response to the same, the AR of the assessee attended the proceedings from time to time and filed written submissions. Required details were called for. These were examined and case was discussed with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he relied on the decision of the Cochin Bench of the ITAT in the case of CIT vs. Trilok Singh (HUF) (2004) SOT 561 (Delhi). 5. Aggrieved the assessee is in appeal before us. 6. The ld. counsel for the assessee submitted that there is no estoppel against law. He submitted that even if the assessee has filed a return of income, declaring income against the proposition of law laid down by various Courts, due to ignorance or otherwise, the AO is duty bound to follow the law and not bring to tax, such amounts which is not income at all. He relied on certain case laws, which we would be discussing in due course. 7. On the issue as to when, the granting of enhanced compensation and interest thereon is pending before a Court, can be taxed, he submitted that it can be taxed only on the compensation being finally determined in the Court of law. He relied on the following case laws. (i) CIT vs. Hardwari Lal 312 ITR 151 (P H) (ii) CIT vs. Smt. T. Girija Ammal 282 ITR 614((Mad) (iii) CIT vs. Padam Parkash (HUF) 104 ITD 1 (Del) (SB) (iv) CIT vs. Hindustan Housing Land Development Trust Ltd. 161 ITR 524 (SC) 8. He also relied on the explanatory notes introd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Delhi High Court. Pending the said appeals, as per interim order of Delhi HC dated 23.9.2008, enhanced compensation of ₹ 14,90,69,822/- was released on furnishing of bank guarantee of equivalent amount from Axis bank. (PB Pages-53 to 61) 6. Entire enhanced compensation including interest is subjudice before the Delhi HC and in fact nothing was finally received by the assessee during the year as the entire amount of enhanced compensation including interest as directed by the Hon ble Delhi HC was kept in FDRs for bank guarantee. (PB Page-62) 12. The only issue that is agitated before us, is whether the Ld.AO and the Ld.CIT(A) have erred in not excluding from taxable income the disputed interest, on enhanced compensation. No other issue is argued before us. Hence we confine ourselves only to the issue of taxability or otherwise, of the interest on compensation, which is admittedly subjudice before the Hon ble Delhi High Court. 13. In this case the assessee has filed a return of income, wherein he declared income from interest on enhanced compensation. Such a declaration of interest income on disputed enhanced compensation, under the facts and circumstances of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be followed and applied by regular Benches and cannot be disregarded Held Yes Whether decision of Special Bench even of three members is entitled to all weight and must have precedence over decision of a Third Member Held Yes Whether regular Benches are required to follow and act upon decision of Special Bench and in case its views are contradictory to views of Third Member, preference is required to be given to S.B. Held Yes. Sec.45 of the Act Capital gains year in which assessable AYs 1995-96, 1998-99 and 1999-2000 whether enhanced compensation is to be taxed on receipt basis and it would not make any difference whether compensation is received as per interim order or on certain conditions or without any condition Held Yes whether assessee s land was acquired under provision of Land Acquisition Act, 1894 and enhanced compensation was granted to assessee by Appellate Court, enhanced compensation was to be taxed in the year of receipt, notwithstanding that order under which compensation and interest was received, was challenged before higher courts and litigation was pending Held Yes. Sec.5 of the Act Income accrual of AY 1995-96, 1998-99, 1999-2000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the government to the claimant whose property is acquired. If the offer is acquiesced by the total acceptance of the right of compensation will not survive but if the officer is not accepted under protest and a reference is sought by the claimant u./s, 18 the right to receive compensation must be regarded as having survived and kept alive which the claimant prosecutes in civil court. It is not correct to say that no sooner had the collector made the first award u/s 11 than the right to compensation is destroyed or ceases to exist or is merged in the award or what is left after the award with the claimant is a mere right to litigate the correctness of the award, The claimant can litigate the correctness of the award because his right to compensation is not fully redeemed but remains active, which he prosecutes in the civil court. This, however, does not meant that the valuation of this right done by the civil court subsequently would be its valuation as age the relevant date of the purpose of either the E.D. Act or the W.T. Act. It is the duty of the Assessing authority under either of those enactments to evaluate the property (the right to receive compensation at market value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecome taxable because of misunderstanding or wrong understanding of law by the assessee or because of his admission or on his misapprehension. If in law an item is not taxable, no amount of admission or misapprehension can make it taxable. The taxability or the authority to impose tax is independent of admission. either there can be any waiver of the right by the assessee. The Department cannot rely upon any such admission or misapprehension if it is not otherwise taxable. (Emphasis ours) This question was dealt with by this court in Bhaskar Mitter's case [1994] 73 Taxman 437, at paragraph 8 at page 442. In this decision, this court observed: An assessee is liable to pay tax only upon such income as can be in law included in his total income and which can be lawfully assessed under the Act. The law empowers the Income-tax Officer to assess the income of an assessee according to law and determine the tax payable thereon. In doing so, he cannot assess an assessee on an amount, which is not taxable in law, even if the same is shown by an assessee. There is no estoppel by conduct against law nor is there any waiver of the legal right as much as the legal liability to be asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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