Punjab-Haryana High Court
Nepal Saini vs Income Tax Officer on 27 October, 2010
Author: Ajay Kumar Mittal
Bench: Adarsh Kumar Goel, Ajay Kumar Mittal
Income-tax Appeal No. 572 of 2008 1
IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH
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Income- Tax Appeal No. 572 of 2008
Date of decision: 27.10.2010
Nepal Saini
--- Appellant
Versus
Income Tax Officer,
Ward-1(3), Faridabad
--- Respondent
CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL
HON'BLE MR. JUSTICE AJAY KUMAR MITTAL
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Present: Mr. Lokesh Sinhal, Advocate
for the appellant.
Mr. Yogesh Putney, Govt. Standing Counsel
for the respondent.
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AJAY KUMAR MITTAL, J.
This appeal under Section 260 A of the Income- tax Act, 1961 (for short "the Act'") has been filed by the assessee Income-tax Appeal No. 572 of 2008 2 against the order dated 5.4.2007, passed by the Income Tax Appellate Tribunal, Delhi Bench "I", New Delhi in short "the Tribunal") in ITA No. 3980/ Del/2005, in respect of the assessment year 2000-01, raising the following substantial questions of law for determination by this Court:
1- Whether the enhanced compensation received by the assessee is taxable in its year of receipt even though the matter with regard to the amount of compensation has not been finally adjudicated? 2- Whether the assessee was liable to file the return with regard to receipt of enhanced compensation in its year of receipt even though the appeal filed by the assess for further enhancement and one filed by HUDA/State for reduction of the enhancement are pending before this Hon'ble Court?
Briefly stated the facts of the case are that appellant- assessee received a sum of Rs. 18,64,974/- on account of enhanced compensation in respect of his acquired land, along with Rs.10,08,619/- as interest, from Haryana Urban Development Income-tax Appeal No. 572 of 2008 3 Authority, in the assessment year 2000-01. It was stated that an appeal is pending in this Court for further enhancement of the amount of compensation. The assessee filed return of income in response to various notices issued to him. The assessing officer, vide order dated 14.3.2005, passed under Sections 144/147 of the Act computed the income of the assessee at a total sum of Rs. 28,73,593/-, besides initiating proceedings under Section 271(1)
(c) for concealment of income and Section 271(1)(b) of the Act for non- compliance of notices issued under Sections 142(1) and 143 (2) of the Act. The assessing officer further ordered for charging of interest under Sections 234A and 234B of the Act from the assessee.
The assessee preferred appeal before the Commissioner of Income- tax ( Appeals) { in short "CIT( A) "}. The CIT( A) vide order dated 9.5.2005 held that the assessing officer had erred in bringing to tax the enhanced compensation and interest received thereon for taxation and deleted the addition so made.
The Revenue filed appeal before the Tribunal. The Tribunal partly allowed the appeal vide order dated 5.4.2007. Income-tax Appeal No. 572 of 2008 4 While the order of the CIT(A), in-so-far as it related to taxability of the amount of interest is concerned, was upheld, but regarding inclusion of the amount of enhanced compensation, the Tribunal held that the amount received by the assessee on that count would be liable to be included in the income chargeable to tax in the current assessment year. The order of the CIT(A) to this effect was set aside and that of the assessing officer restored.
We have heard learned counsel for the parties and have considered the submissions made by them.
Learned counsel for the respondent-Revenue submitted that the enhanced compensation that was received by the assessee was taxable in the year of receipt. In support of his submission, learned counsel placed reliance on a judgment of the Supreme Court in Commissioner of Income-tax v. Ghanshyam (HUF) [2009] 315 ITR 1 (SC).
The Supreme Court in Ghanshyam (HUF)'s case (supra) had held that irrespective of the fact, whether litigation with regard to award of compensation had attained finality or not, under Section 45(5(b) of the Act, which was inserted retrospectively w.e.f. 1.4.1988, taxability of income shall be in the year of receipt. In the instant case, as noticed above, the Tribunal has rightly held that the amount received by the assessee on account of enhanced Income-tax Appeal No. 572 of 2008 5 compensation would be liable to be included in the income chargeable to tax in the current assessment year.
In view of the above, the appeal is dismissed.
(AJAY KUMAR MITTAL)
JUDGE
(ADARSH KUMAR GOEL)
October 27, 2010 JUDGE
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