Commissioner Of Income Tax, Panchkula v. Shri Jasjit Singh

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 418 of 2007 Date of Decision: 9.12.2010 Commissioner of Income Tax, Panchkula Versus Shri Jasjit Singh ....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. None for the respondent. AJAY KUMAR MITTAL, J. 1.This Court vide order dated December 17, 2007 hadadmitted the appeal for determination of the following substantialquestion of law:- “Whether on the facts and circumstances of the case,the Tribunal was right in holding that the income byway of interest on enhanced compensation has notbeen determined so far when the assessee hasactually received the amount a long back?” 2.We have heard learned counsel for the appellant. 3.The point that arises in this appeal is whether the intereston enhanced compensation is taxable in the hands of the assessee inthe year of receipt. ITA No. 418 of 2007-2- 4.The similar issue came up for consideration before thisCourt in ITA No. 209 of 2004 (The Commissioner of Income Tax,Faridabad v. Bir Singh (HUF) Ballabgarh) decided on 27.10.2010,wherein it was concluded as under:- “(a)that 'income from Business or profession' and'income from other sources' are ascertain on thebasis of system of accountancy followed by theassessee;'income from other sources' are ascertain on thebasis of system of accountancy followed by theassessee; (b)where assessee is not maintaining books of accountsby adopting any specific method, it shall be treated tobe cash system of accountancy;by adopting any specific method, it shall be treated tobe cash system of accountancy; (c)the interest under Section 34 to be awarded by theCollector partakes the characters of compensationand is taxable in the year of receipt in view of Section45(5)(b) of the Act; and Collector partakes the characters of compensationand is taxable in the year of receipt in view of Section45(5)(b) of the Act; and (d)under cash system of accountancy, the element ofinterest awarded by the Court received on enhancedamount of compensation under Section 28 of the1894 Act falls for taxation under Section 56 as'income from other sources' in the year of receipt.”interest awarded by the Court received on enhancedamount of compensation under Section 28 of the1894 Act falls for taxation under Section 56 as'income from other sources' in the year of receipt.” 5.In view of the above, the appeal is allowed and the questionof law is answered in favour of the revenue and against the assessee. (AJAY KUMAR MITTAL) JUDGE December 9, 2010gbs (ADARSH KUMAR GOEL)JUDGE