2015 (2) TMI 117

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.... allied matters. 1.1 This court vide order dated 13.12.2007 admitted the appeals for consideration of following substantial questions of law; (i) Whether on the facts and in the circumstances of the case the Appellate Tribunal was right in holding that the alleged amount of compensation cannot be brought within the meaning of income u/s 45(5) of the Income, Tax Act, 1961? (ii) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was justified in holding that the taxability of interest can be considered only after the additional compensation becomes final and the litigation in this regard comes to a conclusion? 2. Mr. P.G. Desai, learned advocate appearing for the revenue submitted that the Tribunal w....

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....reference under Section 18 of the 1894 Act. It depends upon the claim, unlike interest under Section 34 which depends on undue delay in making the award. It is true that "interest" is not compensation. It is equally true that Section 45(5) of the 1961 Act 2 7 refers to compensation. But as discussed hereinabove, we have to go by the provisions of the 1894 Act which awards "interest" both as an accretion in the value of the lands acquired and interest for undue delay. Interest under Section 28 unlike interest under Section 34 is an accretion to the value, hence it is a part of enhanced compensation or consideration which is not the case with interest under Section 34 of the 1894 Act. So also additional amount under Section 23(1A) and solatiu....

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....on under the L.A. Act, 1894, arises and is payable in multiple stages which does not happen in cases of transfers by sale etc. Hence, the legislature had to step in and say that as and when the assessee-claimant is in receipt of enhanced compensation it shall be treated as "deemed income" and taxed on receipt basis. Our above understanding is supported by insertion of clause (c) in Section 45(5) w.e.f. 1.4.04 and Section 155(16) which refers to a situation of a subsequent reduction by the Court, Tribunal or other authority and recomputation/amendment of the assessment order. Section 45(5) read as a whole (including clause "c") not only deals with reworking as urged on behalf of the assessee but also with the change in the full value of the ....

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....t award of Collector or the Court, under reference, has not compensated the owner for the full value of the property as on date of notification." 3. Mr. T.P. Hemani, learned advocate appearing on behalf of the assessees submitted that considering the decision of the Apex Court in the case of Ghanshyam (supra), this Court may remand the matter to the Tribunal for reconsideration of the questions in light of the said decision. 4. We have heard learned counsel for the parties and have perused the records of the case. Considering the decision of the Apex Court in the case of Ghanshyam (supra) wherein the Apex Court has distinguished its earlier decision in the case of Hindustan Housing and Land Development Trust Ltd (supra) which has been....