1992 (4) TMI 28

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....Revenue. The assessee at whose instance the references were made originally is no more. His legal heirs were impleaded. They have been served. But there is no appearance on their behalf at the time when the references were taken up for hearing. All the references relate to the assessment years 1967-68, 1968-69, 1969-70 and 1971-72. We heard counsel for the Revenue, Mr. P. K. R. Menon. The original assessee is one K. C. Alexander who was in possession of landed properties measuring 131.23 acres. Mr. Alexander filed a suit for eviction of the trespassers on the property. He claimed mesne profits and also damages for the waste committed by the trespassers in cutting down some trees. The trial court, as well as the High Court, awarded mesne ....

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....he circumstances of the case, the Tribunal was right in holding that interest awarded by the civil court on damages decreed for waste committed on property is taxable ? Common questions at the instance of the Department : 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that interest awarded by the civil court on mesne profits decreed is not taxable ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that interest on damages for waste decreed by the civil court can be brought to tax only after examining whether it is realisable ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that inter....

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....to tax. This conclusion of the Tribunal is in accord with the Bench decision of this court in CIT v. Mrs. Annamma Alexander [1991] 191 ITR 551. In this perspective, we answer the first question, referred to this court at the instance of the Revenue, in the affirmative, against the Revenue and in favour of the assessee. We are concerned with three more question-one at the instance of the assessee and two at the instance of the Revenue-all of them centring round the exigibility of tax on interest for damages awarded by the civil court in its decree, for waste committed on the property. The Tribunal, rightly in our view, held that interest on compensation for waste is different from mesne profits. It is exigible to tax. The sole question re....