Commissioner Of Income-Tax, Panchkula v. Prem Singh

ITA No. 85 of 2010 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 85 of 2010 Date of Decision: 5.7.2010 Commissioner of Income-tax, Panchkula ....Appellant. Versus Prem Singh ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Yogesh Putney, Advocate for the appellant. Mr. Akshay Bhan, Advocate for the respondent. ADARSH KUMAR GOEL, J. 1.This order shall dispose of ITA Nos. 85 and 163 of 2010and 659 of 2009. The facts are being taken from ITA No. 85 of 2010.2.This appeal has been filed under Section 260A of theIncome Tax Act, 1961 (in short “the Act”) against the order dated28.5.2009 passed by the Income Tax Appellate Tribunal, ChandigarhBench 'B' (hereinafter referred to as “the Tribunal”) passed in ITA No.685/Chandi/2007, for the assessment year 2003-04. The followingsubstantial questions of law have been claimed for determination of thisCourt:- “(i).Whether, on the facts and in the circumstancesof the case learned ITAT is right in law inholding that the amount of enhancedcompensation received by the assessee beforeits final determination does not entailof the case learned ITAT is right in law inholding that the amount of enhancedcompensation received by the assessee beforeits final determination does not entail (ii) (iii) (iv) (v) assessability u/s 45 (5)(b) of the Income-taxAct, 1961? Whether, on the facts and in the circumstancesof the case learned ITAT is right in law inholding that the interest on enhancedcompensation does not accrue for taxationpurposes till the issue of determination ofenhanced compensation is finally decided?Whether, on the facts and in the circumstancesof the case learned ITAT has erred in law inholding that the interest on enhancedcompensation is not liable for taxation till theissue of determination of enhancedcompensation is finally decided within themeaning of Section 2 (14) of the I.T. Act,1961? Whether, on the facts and in the circumstancesof the case, learned ITAT is right in law inholding that the land in question was not acapital asset thereby completely ignoring theevidence on record considered by theAssessing Officer? Whether, on the facts and in the circumstancesof the case, learned ITAT is right in law inadmitting the additional evidence in the shapeof copy of bank pass book and certificate from LAC, Panchkula for holding that the originalcompensation of Rs.983027.50 had beenreceived by the assessee on 28.01.1993without recording any reasons as requiredunder Rule 29 of the Income Tax (AppellateTribunal) Rules, 1963 and without giving anyopportunity of being heard to the revenuebefore admitting and considering thisevidence?” 3.The assessee owned agricultural land which was includedwithin 5 kms. from the urban limits of Panchkula under notificationdated 6.1.1994 and thus the same became 'capital asset' within themeaning of Section 2 (14)(iii)(b) of the Act. Prior to that, the land wasacquired in pursuance of notification dated 29.1.1990 for publicpurpose. Award in respect of the land was rendered by the LandAcquisition Collector on 21.1.1993 and compensation was paid on28.1.1993. Since the crop was standing thereon, the assessee wasgiven time to hand over possession by 15.4.1993. 4.The question before the Assessing Officer was whether thecapital gain was taxable or exempt as agricultural income when suchgain was prior to 6.1.1994. The Assessing Officer held that possessionwas taken over by Haryana Urban Development Authority (HUDA) inthe year 1996 which was after the date of notification, i.e. 6.1.1994 andthus, the capital gain was taxable. On appeal, the CIT (A) reversed thefinding of the Assessing Officer which view was affirmed by the Tribunalin the following terms:- 4.The question before the Assessing Officer was whether thecapital gain was taxable or exempt as agricultural income when suchgain was prior to 6.1.1994. The Assessing Officer held that possessionwas taken over by Haryana Urban Development Authority (HUDA) inthe year 1996 which was after the date of notification, i.e. 6.1.1994 andthus, the capital gain was taxable. On appeal, the CIT (A) reversed thefinding of the Assessing Officer which view was affirmed by the Tribunalin the following terms:- “Now having found that the land in question wasagricultural land not falling with the definition of“capital asset” in the year when the land wascompulsorily acquired, it cannot also be permitted tobe treated as a 'capital asset' in the year in whichenhanced compensation is received. As aconsequence, the question of taxing the additionalcompensation as 'capital gain' u/s 45 (5) of the Actdoes not arise. In this manner, the plea of theassessee is that enhanced compensation receivedduring the year is not assessable to tax as therelevant agricultural land does not fall within thedefinition of 'capital asset'. The assessee succeedson this issue.” 5.We have heard learned counsel for the parties and perusedthe record with their assistance. 6.Learned counsel for the revenue submits that on the dateof taking over of possession of the land, the title of the land vested inthe Government under Section 16 of the Land Acquisition Act. Herelied upon a judgment of Karnataka High Court in Buddaiah v.Commissioner of Income Tax, Karnataka-2, [1985] 155 ITR 277. 7.Learned counsel for the assessee submits that theproposition of law is not disputed but in the present case, date ofpossession being prior to the date of notification on which agriculturalland became 'capital asset' by virtue of notification, referred to above,no substantial question of law arises. Finding of the Tribunal that award was made on 21.1.1993, payment of compensation was made on28.1.1993 and time to take possession was extended upto 15.4.1993 inpara 8 of the order of the Tribunal is not shown to be perverse. 8.Learned counsel for the revenue relied upon theobservation made in the order of the Assessing Officer that thepossession was taken in the year 1996. However, no material has beenproduced to show that possession was taken in the year 1996. Awardwas made in the year 1993 and time to take possession was extendedonly till 15.4.1993 as the crop was standing thereon which finding is notshown by the learned counsel for the revenue to be erroneous. Entry inroznamcha recording the date of taking of possession has not beenshown. The finding of the Tribunal cannot, thus, be held to beerroneous. Even otherwise, no question of law has been raisedregarding the correctness of the finding of date of possession. 9.As regards payment of enhanced compensation, the sameis not relevant. If on the date of acquisition the land was not covered bythe definition of 'capital asset' under Section 2 (14)(iii)(b) of the Act, thecompensation payable to the assessee on such land was not exigible totax. 10.In view of the above, the questions of law raised before thisCourt do not arise. Accordingly, the appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE July 5, 2010gbs (AJAY KUMAR MITTAL)JUDGE ITA No. 85 of 2010 -6- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Commissioner of Income-tax, Hisar Versus Mohan Lal, Nand Lal etc. ITA No. 659 of 2009 Date of Decision: 5.7.2010 ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Yogesh Putney, Advocate for Mr. Sanjeev Kaushik, Advocate for the appellant. Mr. Ravi Shankar, Advocate for the respondent. ADARSH KUMAR GOEL, J. For orders, see ITA No. 85 of 2010 (Commissioner ofIncome-tax, Panchkula v. Prem Singh). (ADARSH KUMAR GOEL) JUDGE (AJAY KUMAR MITTAL) JUDGE ITA No. 85 of 2010 (ADARSH KUMAR GOEL) JUDGE July 5, 2010gbs (AJAY KUMAR MITTAL)JUDGE ITA No. 85 of 2010 -6- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Commissioner of Income-tax, Hisar Versus Mohan Lal, Nand Lal etc. ITA No. 659 of 2009 Date of Decision: 5.7.2010 ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Yogesh Putney, Advocate for Mr. Sanjeev Kaushik, Advocate for the appellant. Mr. Ravi Shankar, Advocate for the respondent. ADARSH KUMAR GOEL, J. For orders, see ITA No. 85 of 2010 (Commissioner ofIncome-tax, Panchkula v. Prem Singh). (ADARSH KUMAR GOEL) JUDGE (AJAY KUMAR MITTAL) JUDGE ITA No. 85 of 2010 -7- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Commissioner of Income-tax, Panchkula Versus Prem Singh ITA No. 163 of 2010 Date of Decision: 5.7.2010 ....Appellant. ...Respondent. CORAM:-HON'BLE MR. JUSTICE ADARSH KUMAR GOEL.HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Yogesh Putney, Advocate for the appellant.Mr. Akshay Bhan, Advocate for the respondent. ADARSH KUMAR GOEL, J. For orders, see ITA No. 85 of 2010 (Commissioner ofIncome-tax, Panchkula v. Prem Singh). (ADARSH KUMAR GOEL) JUDGE July 5, 2010gbs (AJAY KUMAR MITTAL) JUDGE