TaxTMI 
TaxTMI 
2008 (3) TMI 306
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....M SINGH (I. T. A. No. 568 of 2007) (9) NEPAL SAINI, HUF (I. T. A. No. 605 of 2007) (10) MAN SINGH, HUF (I. T. A. No. 612 of 2007) SATISH KUMAR MITTAL and RAKESH KUMAR GARG JJ. I. T. A. Nos. 490, 506, 516, 536, 547, 558, 559, 568, 605 and 612 of 2007 Yogesh Putney for the appellant. JUDGMENT The judgment of the court was delivered by RAKESH KUMAR GARG J. - These appeals under section 260A of the Income-tax Act, 1961 (for short "the Act"), have been filed by the Revenue against the orders passed by the Income-tax Appellate Tribunal, New Delhi, whereby it has been held that the interest on enhanced compensation is taxable when the issue relating to enhanced compensation attains its finality as the same would ac....
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.... date of the order of the court granting enhanced compensation but on its having accrued year after year from the date of delivery of possession of the land till the date of such order, and such interest cannot be assessed to income-tax in one lump sum in the year in which the order is made and, therefore, the Tribunal has erred in law while holding that the interest on enhanced compensation is taxable when the issue relating to the enhanced compensation attains its finality as the same would accrue to the assessee at that time only. On the basis of the abovesaid argument, counsel for the Revenue has further argued that the following substantial question of law arises from the order of the Tribunal for consideration of this court: "Wheth....
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....TR 139 ((P&H)) has held that the enhanced compensation is to be assessed in the year when the dispute regarding enhanced compensation attains finality. This court has followed the said view of the apex court while interpreting the provisions of section 45(5)(b) after insertion of clause (c) to section 45(5) and sub-section (16) of section 155 of the Act as inserted by the Finance Act, 2003, with effect from April 1, 2004, and has held that the provisions of section 45(5)(b) will be attracted only when the assessee receives enhanced compensation in pursuance of a final order of the court or the Tribunal or other authority increasing the compensation. In the case of CIT v. Dilbagh Singh (I.T. Appeal No. 177 of 2005, decided on 14-11-2005), th....
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.... case of Chief CIT v. Smt. Shantavva [2004] 267 ITR 67. The relevant part of the judgment in Chief CIT v. Smt. Shantavva [2004] 267 ITR 67 is reproduced hereunder (headnote 68): "Only when the reference court determines the compensation and such determination becomes final, the amount received in pursuance of the interim order will be appropriated against the compensation finally determined and will become income chargeable under the head 'Capital gains'. The mere fact that some amounts had been received by furnishing security, in pursuance of the interim orders, pending final determination, would not make the amounts received by the assessee 'compensation' or 'consideration' that could be subjected to tax under section 45(5)(b)." 9. ....
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....ssession of the lands till the date of such order. Thus, in Rama Bai's case [1990] 181 ITR 400 the hon'ble Supreme Court decided the question only to the extent that on receipt of interest income in lump sum the same is not to be taxed and the same is to be spread over from the date of delivery of possession of the land till the date of order. 11. In the present case, the question posed by the Revenue is slightly different. The pith and substance of the question raised before us is whether in the circumstances of a compensation case where the matter of enhanced compensation has not attained finality, the interest on enhanced compensation would not accrue and could be subjected to tax only when the issue of enhanced compensation is finall....