1995 (10) TMI 21

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....etitioner's property was acquired by the State as per the provisions contained in the Land Acquisition Act. Dissatisfied with the quantum of compensation awarded by the Collector, the petitioner got the issue referred to the reference court, under section 18 of the Land Reforms Act. The reference court enhanced the amount of compensation. The total amount of compensation awarded was Rs. 1,37,24....

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.... He was dispossessed on March 2, 1987. On a reference, the learned Subordinate judge awarded enhanced compensation of Rs. 1,37,249.57 together with interest. Interest, accrued on that enhanced compensation, was treated as the income of the petitioner for the year 1995-96. The short question is whether the Government was justified in treating the interest portion of Rs. 1,64,473.86 as the income de....

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....nd owner (assessee). We have already noticed that the settled legal position is that the interest relates back to the date of dispossession of the property on which date compensation becomes payable whatever be the time taken to finally settle the quantum of compensation. Even assuming that the court had the discretion not to grant interest, once it is granted, the right to receive interest relate....

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.... to the petitioner for the year 1995-96. Consequently, deduction of Rs. 18,421.06 is illegal. The amount of interest should have been spread over for the period from March 2, 1987, to July 20, 1995. Section 197A(1A) of the Income-tax Act, 1961, is in the following terms : " Notwithstanding anything contained in section 194A or section 194K, no deduction of tax shall be made under either of t....