2019 (5) TMI 1241 - HC - Income Tax

Court partially allows appeal, sets aside order, remits case for reassessment under Income Tax Act Sections 10(37) and 145A.

Sri Padamanarayana Asawa Son & Legal Heir of Late Ramvallabh Asawa Versus The Deputy Commissioner Of Income-Tax, Circle-I,

The court allowed the appeal partially, setting aside the challenged order and remitting the case for re-assessment in compliance with Sections 10(37) and ... Assessments made without reference to Section 10(37) and 145A - interest and the compensation - HELD THAT:- The income by way of interest and the compensation amount were declared on accrual basis. That the law with regard to the method of computation of the income came to be settled in the case of Commissioner of Income Tax Vs. Ghanshyam [2009 (7) TMI 12 - SUPREME COURT], wherein the Hon’ble Apex Court was pleased to lay down the law that the computation of income sought to be made on receipt basis It is not in dispute that under the amended provision of sub-section 37 of section 10 of the Income Tax Act the income in the case of an assessee, being an individual or a Hindu undivided family, any income chargeable under the head “Capital Gains” arising from the transfer of agricultural land and such transfer is by way of compulsory acquisition under any law, or a transfer the consideration for which is determined or approved by the Central Government or the Reserve Bank of India and where such income has arisen from the compensation or consideration for such transfer received by such assessee on or after received, such income would not form part of the total income. During the course of arguments, the learned Senior counsel placed reliance on the provisions of Section 10(37) of the Income Tax Act which undoubtedly came to be inserted vide amendment dated 01.04.2005 and the provision of Section 145A came to be substituted with effect from 01.04.2010. Substantial question of law is answered in the affirmative. Appeal is allowed in part. The order under challenge is set aside. The appeal is remitted back to the competent authority for re-assessment in accordance with law and more particularly with reference to Sections 10(37) and 145A Issues:1. Interpretation of Sections 10(37) and 145A of the Income Tax Act for assessment.Analysis:The judgment addresses the substantial question of law regarding the need for remand due to assessments made without considering Section 10(37) and 145A of the Income Tax Act. The Revenue argued that the appellant's new case based on these sections was not raised before the lower authorities and should be examined by the Assessing Officer. The Revenue emphasized that income computation should be on a receipt basis, as established by a previous Supreme Court ruling. The amended provision of Section 10(37) exempts certain income from the total income if arising from the transfer of agricultural land through compulsory acquisition or with government-approved consideration. The court noted that the appellant's reliance on Section 10(37) and the amended Section 145A was valid, as these provisions were inserted and substituted on specific dates.The court concluded that the substantial question of law was answered affirmatively, leading to the partial allowance of the appeal. The order under challenge was set aside, and the case was remitted back to the competent authority for re-assessment in compliance with Sections 10(37) and 145A of the Income Tax Act. The judgment highlighted the importance of considering the specific provisions during assessments and emphasized adherence to the law in such matters.