TMI Blog1980 (1) TMI 41X X X X Extracts X X X X X X X X Extracts X X X X ..... ver for the entire period commencing from the date of dispossession to that of the decree passed by the court ? 2. Whether, under the facts and circumstances of the case, the Income-tax Appellate Tribunal is justified in including the sum of Rs. 1,21,554, the interest on the enhanced compensation, as the income of the assessee for the assessment year 1970-71 ? " During the year 1961, a total extent of 1 acre 83 cents belonging to the assessee was acquired under the Kerala Land Acquisition Act (hereinafter called " the Act ") for the Cochin Shipyard Project. Possession of a portion of the property was taken on June 9, 1961, and the rest of the property was also taken possession of on November 9, 1961. The Land Acquisition Officer awarded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he, however, held that only Rs. 3,629 being the interest for the period from August 17, 1969 (date of commencement of the accounting period), to November 9, 1969 (date of payment) could be included in the assessment for the year 1971-72 and that the balance of Rs. 1,21,554 representing the interest for the period from June 9, 1961, to August 16, 1969, was to be treated as income which had accrued during the accounting period relevant for the assessment year 1970-71. Pursuant to the aforesaid order of the AAC, the ITO reopened the assessment of the assessee for the assessment year 1970-71, under s. 147 of the I.T. Act. In response to the notice issued to him under s. 148, the assessee filed a return showing his income at the same figure as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d held that since the assessee had not been keeping any accounts and since the entire amount had been received by him after November, 1969, the assessability had to be considered on accrual basis and only Rs. 15,585 could be considered as the income derived by the assessee by way of interest for the assessment year under consideration. The department thereupon preferred an appeal before the Tribunal contending that the entire sum of Rs. 1,21,554 was liable to be assessed as income of the assessment year in question, namely 1970-71. The Tribunal allowed the appeal holding that the award of interest on the enhanced compensation decreed by the court was wholly dependent on the discretion to be exercised by the court and consequently the intere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or on the date of the notification published under s. 4 of the Land Acquisition Act, because at those stages it could not invariably be predicated that the assessee would file an application for reference in the, court for excess compensation, or that the court would enhance the compensation, and even if it does so, that it would award interest on the excess compensation. Pointing out that s. 30 of the Kerala Land Acquisition Act (s. 28 of the Central Act) left it to the court to decide, in its discretion, whether or not to award to the claimant interest on the amount of excess compensation decreed by it, the Division Bench held that the right to interest on the excess compensation cannot, therefore, be said to arise, and income by way ..... X X X X Extracts X X X X X X X X Extracts X X X X
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