1982 (11) TMI 27

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....eipt estimated and measured in terms of interest as decided by the Madras High Court in A. S. Krishnamurthi v. Revenue Divisional Officer reported in [1970] 2 MLJ 692; AIR 1971 Mad 236, but revenue receipt ? 2. Whether, in the facts and circumstances of the case, was the Appellate Tribunal right in law in holding that the entire interest amount of Rs. 73,295 was assessable in the assessment year 1967-68 and not that only proportionate interest referable to the assessment year 1967-68 was only assessable in that year? 3. Whether, in the facts and circumstances of the case, was the Appellate Tribunal justified in holding that the entire amount of Rs. 73,295 is assessable in 1967-68, even though the Income-tax Officer himself has chosen ....

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....h was accordingly done. So far as the first question is concerned, there can be little doubt today regarding the proposition that interest received is a revenue receipt and not a capital receipt. Indeed, the learned counsel for the assessee did not seriously contend to the contrary on this question. Coming to the second question, it is concluded so far as this court is concerned, by the decision in CIT v. Smt. Sankari Manickyamma [1976] 105 ITR 172 (AP), which was also followed by another Bench of which one of us (Jeevan Reddy J. is a party) in RC Nos. 129/77 and 1/78, disposed of on June 22, 1982 (CIT v. Syed Khadruddin Ali Khan [1983] 144 ITR 266 (AP)). Mr. Dasaratharama Reddy sought to canvass the correctness of the Bench decision ....

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....nted out that the interest on the enhanced compensation under s. 28 of the Land Acquisition Act is discretionary and that until awarded the owner's right is only to claim it. On this ratio it was held that the entire interest received should be included in the income of the accounting year in which it is received and it cannot be distributed proportionately over the period commencing from the date of s. 4(1) notification and the date of the judgment of the civil court. We are, therefore, of the opinion that following the said Bench decision, the second question has to be answered in the affirmative and in favour of the Department and against the assessee. On the third question, Mr. Dasaratharama Reddy argued that the ITO has himself chos....