TaxTMI 
TaxTMI 
2008 (4) TMI 34
X X X X Extracts X X X X
X X X X Extracts X X X X
....nd its main object is to acquire land and built houses on that land. The land acquired by the society was compulsorily acquired by the Government. During the year under consideration, the society has received enhanced compensation of Rs.9,45,32,917/- from the reference court comprising of additional compensation of Rs.6,40,00,000/- and interest of Rs.3,08 crores thereon. The assessee declared a capital loss of Rs.2,52,55,221/- carried forward to next year on long term capital gain of Rs.12.32 lacs. The assessee also declared net income of Rs.30,89,258/- on account of interest received. Accordingly, the assessee declared a returned income of Rs.18,56,620/-.. 3. The Assessing Officer vide his order dated 27.2.2004 passed under section 143(....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of compensation, it's enhanced or reduction by any court there after has been separately considered. Therefore, the enhanced compensation is to be taxed in the year of such receipt. The assessee interest of reduction by any Court later on as pointed out by Hon'ble Supreme Court have been duly safeguarded as per clause(c) of section 45(5) that the assessee can re-computed that the same in the year of any such reduction later on. v) Therefore, it is held that the entire amount of Rs.9.56 crores on account of enhanced compensation is taxable in assessment year of 2001-2002 only. The amount of Rs. 5.29 crores shall be taxed under the head "Income from other sources". 4. The assessee filed an appeal before the Commission....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to be assessed on accrual basis from year to year and it can be subjected to tax only after it is finally determined. 7. In view of the stand taken by the Revenue, the Tribunal directed the Assessing Officer to tax the compensation in the year of receipt and interest on enhanced compensation in the assessment year relevant to the previous year in which it is finally determined. In spite of the fact that the revenue has conceded before the Tribunal over the issues involved in the case, yet the present appeal has been filed raising the following questions of law:- i) Whether in the facts and circumstances of the present case the impugned orders A-1 and A-3 are legally sustainable in the eyes of law ? ii) &n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r on the ground that no remedy will be available to the Revenue if the enhanced compensation as well as interest are finally upheld after the prescribed time of issue of notice under Section 148 of the Act. He further argued that in view of the clear provisions of Section 45(5) of the Income Tax Act, the amount of enhanced compensation and interest thereon received by the appellant-assessee is liable to be taxed in the year of its receipt. 12. We find force in the argument raised by Shri Akshay Bhan, Advocate, learned counsel for the assessee/appellant. The point in issue is squarely covered by our judgment in ITA No.427 of 2005 Chandi Ram Versus Commissioner of Income Tax, Faridabad and others and ITA No.490 of 2007 Commissioner o....