TMI Blog1979 (12) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... and that only a sum of Rs. 4,815 of interest relevant to the assessment year 1970-71, was assessable in that year ? " The material facts giving rise to this reference as set out in the statement of the case are as follows : The assessee, His Highness Maharaja Yashwant Rao Pawar of Dewas (junior), an individual, derived income, among others, from agricultural land belonging to him. Some agricultural land measuring 73.39 acres belonging to the assessee was acquired by the State Government on March 23, 1965. The possession of the land acquired was taken over by the Government on March 30, 1965. The Land Acquisition Officer offered an amount of Rs. 3,57,251 as compensation to the assessee for the land acquired. On a reference made at the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the revenue, the Tribunal has referred the aforesaid question of law for the opinion of this court. The learned counsel for the revenue submitted that the Tribunal committed an error of law in holding that the income from interest on the amount of enhanced compensation accrued in the respective years for which it was made payable by the decree of the court and it was only quantified by the decree of the court. According to him, the income from interest in the present case accrued only when it was adjudicated by the court and the entire amount of interest was taxable in the assessment year in question. He placed reliance upon the decisions in CIT v. Hindusthan Housing and Land Development Trust Ltd. [1977] 108 ITR 380 (Cal) and M. Jairam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereupon the land absolutely vests in the Government free from all incumbrances. In case of emergency the possession of the land can also be taken before the award is made under s. 17 of the L.A. Act. Section 34 of the L. A. Act enjoins the Collector to pay interest on the amount of compensation @ 6% p.a. if the amount of compensation is not paid or deposited on or before taking possession of the land, from the time of so taking possession until it shall have been so paid or deposited. Thus, interest payable under s. 34 of the L.A. Act is a determinate amount and is not dependent upon any order of the Collector or any other authority. If the possession of the land is taken without payment or deposit of the of compensation the person whose ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount accrues or arises when possession of the land is taken from the person whose land is acquired. Such a person has no right to receive interest on the amount of enhanced compensation. The right to receive such interest accrues or arises only when the court while enhancing the amount of compensation also directs payment of interest thereon. We, therefore, respectfully disagree with the decisions relied upon by the learned counsel for the assessee referred to above and agree with the decisions relied upon by the learned counsel for the revenue. We are of the opinion that in the instant case the right to receive interest was acquired by the assessee only when such interest was awarded by the court on the enhanced amount, and he had no su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assignee that part of the income accrued to the original agents and it was liable to be assessed in their hands was negatived. Similarly, in the present case, though the occasion for the award of interest was taking over possession of the land acquired, the right to receive the same arose only when the court in its discretion awarded interest on the enhanced compensation under s. 28 of the L. A. Act and was assessable only in the year of assessment and could not be spread over in the previous years because the right to receive interest did not arise prior to the passing of the decree by the court. As a result of the discussion aforesaid our answer to the question referred to us is in the negative and against the assessee. In the circum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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