1996 (5) TMI 46

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....ified in holding that the interest amounting to Rs. 5,757 awarded under section 110CC of the Motor Vehicles Act, 1939, was a revenue receipt and thus exigible to tax ?" The facts as stated in the statement of case are that the assessee met with an accident when a jeep hit him on February 4, 1972, as a result of which he received severe injuries including fracture of bone, and was admitted in the hospital for medical treatment. The assessee is a practising lawyer and filed the claim for compensation under section 110A of the Motor Vehicles Act, 1939, before the Claims Tribunal and the said Tribunal, vide its order dated August 22, 1977, awarded a compensation of Rs. 15,000 on account of physical disability and mental agony caused to him d....

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.... In the appeal preferred before the Appellate Assistant Commissioner, the said decision was rejected following the decisions in the case of Govinda Choudhury and Sons v. CIT [1977] 109 ITR 497 (Orissa) and T. N. K. Govindaraju Chetty v. CIT [1967] 66 ITR 465 (SC). This was a case under the Land Acquisition Act and the apex court observed that the right of the assessee to receive interest arose by virtue of the provisions of sections 28 and 34 of the Land Acquisition Act, 1894, and the arbitrator and the High Court merely gave effect to that right in awarding interest on the amount of compensation. The interest received by the appellant was, therefore, taxable. The principle in Dr. Shamlal Narula's case [1964] 53 ITR 151 (SC) was followed....

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....0CC of the Motor Vehicles Act, 1939, are as under : " 110CC. Award of interest where any claim is allowed. --- Where any court or Claims Tribunal allows a claim for compensation made under this Act such court or Tribunal may direct that in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as it may specify in this behalf. " In the language of section 110CC of the Act of 1939 though it is mentioned that the Claims Tribunal may direct that in addition to the amount of compensation simple interest shall also be paid at such rate and from such date not earlier than the date of making the claim as it may specify in this behalf. But the fac....