Land acquisition compensation followed the operative award date, so the partnership firm-not the individual-was entitled to receive it.

Under the Land Acquisition Act, entitlement to compensation depended on when the award became operative and who was entitled to receive it on that date. The award signed on 9 November 1962 was effective only when announced on 15 December 1962, by which time the partnership firm had already come into existence. As a result, the acquisition compensation was attributable to the firm and not to the individual in his personal capacity.

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Issues: Whether the gain arising from acquisition of the land was taxable in the hands of the individual assessee or the partnership firm, having regard to the date on which the award became effective and the person entitled to receive compensation.

Analysis: Under the scheme of the Land Acquisition Act, the award under section 11 is followed by filing of the award and notice to interested persons under section 12, and possession under section 16 results in vesting of the land in the Government. The decisive point was the date on which the award became operative for the purpose of identifying the person entitled to compensation. The award signed on 9 November 1962 was not effective until it was announced on 15 December 1962. On that date, the partnership firm had already come into existence, and the compensation could not be attributed to the individual in his personal capacity.

Conclusion: The compensation was payable to the partnership firm and not to the individual assessee; the question was answered in favour of the assessee and against the Department.

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