1954 (10) TMI 44

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....ponding accounting year the assessee received a sum of ₹ 8,272 from the Central Public Works Department as compensation for the use and occupation of the land. The assessee did not include this amount in his return for the assessment year 1947-48. The Income-tax Officer required the assessee to produce correspondence relating to the payment of the amount. The assessee did not produce the correspondence nor did he furnish any material to show what was the nature of the payment and what was the period to which it related. The Income-tax Officer thereupon decided that the sum of ₹ 8,272 was rent received by the assessee in a lump sum and was liable to be taxed. An appeal was taken by the assessee to the Appellate Assistant Commissi....

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....ount of ₹ 8,272 was compensation paid for the sterilisation of capital asset and was not liable to be taxed as income in the assessee's hands. We are unable to accept the argument of the learned counsel as correct. It should be noticed in the first place that the assessee did not produce any material before the Income-tax authorities to show what was the nature of the payment made by the Central Public Works Department and what was the period to which it related. The assessee did not also furnish any material before the Income-tax authorities to indicate if there was any agreement between the parties as regards the rent of the land and for what purpose the assessee had used the land before the Central Public Works Department had m....

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....e [1951] 19 ITR 596. The material facts of that case are closely similar to the facts of the present case and it was held by the Division Bench in that case that the amount of compensation received by the assessee from the military authorities was really a profit derived from the land and was therefore taxable. In support of his argument Mr. Tarkeshwar Prasad referred to two authorities : Glenboig Union Fireclay Co., Ltd. v. CIR [1922] 12 Tax Cas. 427 and CIT v. Shaw Wallace & Co [1932] 59 IA 206. But we do not think that the ratio of these authorities support the argument of the assessee. In the first case the assessee carried on business as manufacturers of fireclay goods and was lessee of certain fireclay fields over part of which there....

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.... returned the land to the assessee after the period of requisition was terminated, in the same condition as it was before. It is clear therefore that there was no permanent deprivation of the capital asset but the assessee was merely prohibited from enjoying the land for a period of years because the Government had requisitioned it under the Defence of India Rules. The ratio of Glenboig Union Fireclay Ltd. v. CIR [1922] 12 Tax Cas. 427 has therefore no application to the present case. The other case upon which Mr. Tarkeshwar Prasad placed much reliance is CIT v. Shaw Wallace & Co. [1932] 59 IA 206 The question at issue in that case was whether a certain amount received from a principal by an agent as full compensation for cessation of the a....