TMI Blog1951 (3) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... es under the Defence of India Rules. There was an agreement between the assessee and the military authorities that a sum of ₹ 1,100 per month will be paid to the assessee as compensation for the use of the land. It should be added that the military authorities used the land as a store-yard. For the year 1946-47 the assessee received a total sum of ₹ 13,200 as compensation. After making statutory deductions, the Income-tax Officer held that the net sum of ₹ 9,699 received by the assessee from the military authorities was liable to be taxed. The assessee preferred an appeal to the Appellate Assistant Commissioner and argued that the amount was not liable to be taxed since it was merely compensation from the military authorit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , contending that the fireclay was not a mineral and consequently formed part of the railway company's property. While the action was pending the appellant company was interdicted from working under the railway. In 1911 the House of Lords decided against the railway company, which thereupon exercised its statutory powers to require part of the fireclay to be left unworked on payment of compensation. The amount of compensation was settled by arbitration and duly paid to the appellant company in 1913. The question debated before the House was whether the amount received for compensation in respect of the fireclay left unworked was profit earned in the course of the company's trade. Upon the facts of the case the House of Lords held th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty was not income within the meaning of the Income-tax Act and was therefore not liable to assessment. It is manifest that the facts are not in any way parallel to the facts of the present case. On the contrary it would seem that the amount of compensation received by the assessee is really a profit derived from the land and it was rightly held by the Appellate Tribunal that the assessee was liable to be taxed under the Act. Upon these grounds I hold that in the circumstances of the case the sum of ₹ 9,699 received by the assessee from the military authorities is taxable. The assessee must pay the cost of this reference to the Commissioner of Income-tax. Hearing fee ₹ 250. SARJOO PROSAD, J.-- I agree. Reference answere ..... X X X X Extracts X X X X X X X X Extracts X X X X
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