TMI Blog1989 (11) TMI 2X X X X Extracts X X X X X X X X Extracts X X X X ..... owned 42 acres 6 guntas of lands situate in a village Nacharam near Hyderabad. The lands are covered by Survey No. 55 (16 acres 33 guntas), Survey No. 58 (13 acres 12 guntas) and Survey No. 59/2 (42 acres 06 guntas). The Government of Andhra Pradesh acquired these lands under the Land Acquisition Act and a notification under section 4 of the said Act was published on May 14, 1964, in the Gazette. Possession was taken by the Government between October 27, 1964, and November 7, 1964. The Special Deputy Collector, Land Acquisition, awarded compensation of Rs. 21,075, solatium of Rs. 3,161 and interest of Rs. 1,004, in all amounting to Rs. 25,240, as per his award dated November 20, 1965. The assessee being aggrieved by the amount of compensation awarded sought for a reference under section 18 of the Land Acquisition Act and the matter came up before the Second Addl. Chief Judge, City Civil Court, Hyderabad (Registered as 0. P. No. 141 of 1966). The court, while disposing of the reference under section 18, awarded compensation of Rs. 2,04,007 and solatium of Rs. 30,600. It is thus found that the assessee got enhanced compensation to the extent of Rs. 2,34,607. Interest to the extent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Manickyamma reported in [1976] 105 ITR 172. On behalf of the assessee, however, it was pointed out that there is an apparent conflict between this decision and the decision of the Hon'ble Andhra Pradesh High Court in the case of Mrs. Khorshed Shapoor Chenai v. Assistant Controller of Estate Duty reported in [1973] 90 ITR 47. The Tribunal, however, observed that there is no conflict between the two and that the point is covered by S. Manickyamma's case [1976] 105 ITR 172. On behalf of the assessee, it was also pointed out that other High Courts have taken a different view. They are (i) Punjab and Haryana High Court in the case of CIT v. Dr. Sham Lal Narula reported in [1972] 84 ITR 625 ; (ii) Madras High Court in the case of T. N. K. Govindarajulu Chetty v. CIT reported in [1973] 87 ITR 22 ; and (iii) Orissa High Court in the case of Joyanarayan Panigrahi v. CIT reported in [1974] 93 ITR 102. The Tribunal observed that the above decisions support the contention of the assessee. Nevertheless, the Tribunal, being bound by the decision of the Hon'ble Andhra Pradesh High Court, held that the assessee's contention should be rejected and the entire interest on enhanced compensatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest of Rs. 20,742 from the date of possession by the Government to the date of payment. The interest of Rs. 20,742 was assessed in the assessment year 1965-66 as the award was given in the month of March, 1965. Not being satisfied with the extent of compensation awarded by the Land Acquisition Officer, references were filed by the applicants in the City Civil Court under section 18 of the Land Acquisition Act. These references were numbered as 0. P. No. 325 of 1965 and 0. P. No. 364 of 1965 in the Court of the Second Additional Judge, City Civil Court, Hyderabad. By order dated October 30, 1967, the City Civil Court enhanced the compensation to Rs. 6,000 per acre and also directed payment of solatium at 15% on the enhanced compensation besides interest from the date of possession to the date of payment. Aggrieved by the enhancement directed by the City Civil Court, the Government filed appeals bearing C.C.CA. Nos. 135 of 1965 and 136 of 1965 to the High Court. Cross appeals were also filed by the applicants claiming that the enhancement directed by the City Civil Court was not adequate. These cross appeals were numbered as C.C.A. Nos. 123 of 1968 and 157 of 1968. While the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst his decision. The applicants reiterated before the Tribunal the contention raised before the lower authorities. Counsel appearing on their behalf strongly relied on the following decisions of the High Courts : (i) Commissioner of Income-tax v. Dr. Sham Lal Narula [1972] 84 ITR 625 (P H) (ii) T. N. K. Govindarajulu Chetty v. Commissioner of Income-tax [1973] 87 ITR 22 (Mad) (iii) Joyanarayan Panigrahi v. Commissioner of Income-tax [1974] 93 ITR 102 (Orissa) ; and (iv) Commissioner of Income-tax v. Sampangiramaiah [1968] 69 ITR 159 (Mysore). The Tribunal, however, felt bound by the Andhra Pradesh High Court decision in Sankari Manikyamma's case [1976] 105 ITR 172, and, accordingly, upheld the orders of the Appellate Assistant Commissioner. On the above facts, we are of the opinion that the following question of law arises out of the order of the Tribunal, viz.: "Whether, on the facts and in the circumstances of the case, the interest received by the assessees as per the City Civil Court's award for the period commencing from the date of possession till March 31, 1968, was entirely assessable for the assessment year 1968-69?" Since there is a conflict of views a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he High Court in T. N. K. Govindarajulu Chetty v. CIT [1973] 87 ITR 22 (Mad), which was upheld by the Supreme Court in this matter, that the issue has been considered by this court in all its aspects. The principle of the decision also derives support from the earlier decision of this court in Khorshed Shapoor Chenai v. Asst. CED [1980] 122 ITR 21. In these circumstances, we are of the opinion that the appeals before us (Civil Appeal No. 810 of 1974 and Civil Appeal No. 3027 of 1988) have to be allowed and the references made under section 257 (Tax Reference Cases Nos. 3 of 1976 and 1 to 3 of 1978) have to be answered by saying that the question of accrual of interest will have to be determined in accordance with the above decision of this court. The effect of the decision, we may clarify, is that the interest cannot be taken to have accrued on the date of the order of the court granting enhanced compensation but has to be taken as having accrued year after year from the date of delivery of possession of the lands till the date of such order. These matters are disposed of accordingly. There will be no order as to, costs. Civil Miscellaneous Petitions Nos. 14921-25 of 1978 in C. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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