TMI Blog1989 (9) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... bearing on determination of the issue before us, we have no hesitation in cancelling the impugned order by holding that the Commissioner of Income-tax had no jurisdictional facts to assume lawful jurisdiction u/s. 263 to make the impugned order. 3. The assessee, Shri Vinod Kumar Gupta, is an individual having income from house property, share of profits from M/s. New Idea Farm Equipment Co., interest on deposits etc. The assessee was travelling with a couple, who were family friends, in a car driven by a driver on 29th Dec. 1979 when, unfortunately, the car met with a serious accident. The friend of the assessee died on the spot. His friend's wife, however, survived with injuries. The assessee was grievously injured. The accident took pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hed with the return that claim from insurance company amounting to Rs. 34,143 is not taxable as income. You are requested to explain the nature of the insurance claim received and as to why it is not taxable. In order to enforce compliance, the Income-tax Officer added in hand to this typed letter that a notice u/s. 143(2) is enclosed. By letter dated 23-1-85, the assessee explained to the officer that he had taken out accident policy on his life and as a result of the accident, he suffered grievous injuries and was admitted to the local hospital. The amount of compensation amounting to Rs. 34,143 on this account, it was claimed, was a capital receipt and not liable to income-tax. In support of this claim, letter from insurance company had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies that the amount was not taxable being capital receipt. It is not clear what happened thereafter but the learned counsel for the assessee made a statement at the Bar that thereafter nothing was heard from that Income-tax Officer. 7. It is thereafter that the Commissioner of Income-tax (Central), Ludhiana, issued a notice u/s. 263 to the assessee, a copy of which is placed on our record, which, unfortunately, does not bear any date but the ld. Commissioner has written in his impugned order that it was dated 21st August, 1986. In this letter, the ld. Commissioner projected to the assessee that in the assessment made on 25-1-1985, the Income-tax Officer had not included the sum of Rs. 34,143 received as compensation from National Insuranc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are received for permanent disablement as a result of accident, they constitute a capital receipt. However, if the disablement is only temporary, the damages received are revenue receipt. He set aside the order made by the Income-tax Officer on 25-1-85 with the direction that, "it be framed in accordance with the provisions of law after including the sum of Rs. 34,143 above referred to as a taxable revenue receipt in the hands of the assessee". 9. Before us, the learned counsel for the assessee relying upon the judgment of the Punjab and Haryana High Court in the case of (a) CIT v. R.K. Metal Works [1978] 112 ITR 445, (b) judgment of the Tribunal in the case of Smt. Guljeet Walia v. ITO [1988] 32 TTJ (Delhi) 538 and judgment of the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... January 23, 1985, the assessee has clearly brought out all the facts that were relevant for determining the character of the amount of Rs. 34,143. It is only thereafter that the Income-tax Officer considered not only the letter of the assessee but a certificate from National Insurance Co. Ltd. which had been filed on his record. Therefore, when he made the assessment on 25-1-85, it was completed with his judicial satisfaction that the amount of Rs. 34,143 did not bear the character of income includible in the total income of the assessee for the year under appeal. 11. On such facts, the Commissioner could not have assumed lawful jurisdiction without showing how the order of the Income-tax Officer was erroneous as well as prejudicial to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received on account of personal injuries in a car accident. In the case of Gee Vee Enterprises, the Income-tax Officer had not made sufficient enquiries before granting registration to the assessee. The court, therefore, was considering facts which were entirely different from the facts of the case before us. 13. The facts before us clearly show that the assessee in all fairness and in a bona fide manner based upon in actual happenings in life made disclosure of the amount of Rs. 34,143 received from the insurance company for temporary disablement proved by necessary documents. This amount was, on the facts of the case, capital receipt and not taxable and includible in the total income of the assessee. The Income-tax Officer, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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