Nepal Saini v. Income Tax Officer,Ward-1(3), Faridabad

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH --- -Income Tax Appeal No. 572 of 2008Date of decision: 27.10.2010 Nepal Saini --- Appellant Versus Income Tax Officer,Ward-1(3), Faridabad --- Respondent ’CORAM:HON BLE MR JUSTICE ADARSH KUMAR GOEL. ’HON BLE MR JUSTICE AJAY KUMAR MITTAL. --- Present:Mr Lokesh Sinhal Advocate. , for the appellant. Mr Yogesh Putney Govt Standing Counsel. , . for the respondent. --- AJAY KUMAR MITTAL J, . , . This appeal under Section - 260 A of the Income tax Act, 1961 (for short “the Act ”’ ) has been filed by the assessee against the order dated against the order dated 5.4.2007, passed by the Income TaxAppellateTribunal, DelhiBench“I”, NewDelhiinshort “theTribunal”) inITANo. 3980/Del/2005, in respect of theassessmentyear 2000-01, raisingthefollowing substantialquestions of law for determination by this Court: 1- Whether the enhanced compensation received bythe assessee is taxable in its year of receipt eventhough the matter with regard to the amount ofcompensation has not been finally adjudicated? ? 2- Whether the assessee was liable to file the returnwith regard to receipt of enhanced compensationin its year of receipt even though the appeal filedby the assess for further enhancement and onefiledbyHUDA State/forreductionof theenhancementarependingbeforethisHon ble’Court? ? Briefly stated the facts of the case are that -appellant assessee received a sum of Rs. 18,64,974/- on accountof enhanced compensation in respect of his acquired land along, with Rs.10,08,619/- as interest from Haryana Urban Development, Authority in the assessment year, 2000-01. It was stated that an , appeal is pending in this Court for further enhancement of theamount of compensation. The assessee filed return of income inresponse to various notices issued to him The assessing officer. ,vide order dated 14.3.2005, passed under Sections 144/147 of theAct computed the income of the assessee at a total sum of Rs.28,73,593/-, besides initiating proceedings under Section 271(1)( ) cfor concealment of income and Section 271(1)( ) bof the Act for-non compliance of notices issued under Sections 142(1) and 143(2) of the Act. The assessing officer further ordered for chargingof interest under Sections 234 A and 234 B of the Act from theassessee. . Theassesseepreferredappealbeforethe-Commissioner of Income tax (Appeals) {in short “CIT A ”( ) }. TheCIT A( ) vide order dated 9.5.2005 held that the assessing officerhad erred in bringing to tax the enhanced compensation andinterest received thereon for taxation and deleted the addition somade. The Revenue filed appeal before the Tribunal. TheTribunal partly allowed the appeal vide order dated 5.4.2007. -While the order of the CIT A( ), -in so far as it related to taxability ofthe amount of interest is concerned, was upheld, but regardinginclusion of the amount of enhanced compensation, the Tribunalheld that the amount received by the assessee on that countwould be liable to be included in the income chargeable to tax inthe current assessment year The order of the CIT A. ( ) to this effectwas set aside and that of the assessing officer restored. We have heard learned counsel for the parties andhave considered the submissions made by them. . Learned counsel for the respondent-Revenue submittedthat the enhanced compensation that was received by the assesseewas taxable in the year of receipt. In support of his submission,learned counsel placed reliance on a judgment of the Supreme Courtin Commissioner of Income-tax v. Ghanshyam (HUF) [2009] 315ITR 1 (SC). TheSupreme Court in Ghanshyam (HUF)’s case(supra) had held that irrespective of the fact, whether litigation withregard to award of compensation had attained finality or not, underSection 45(5(b) of the Act, which was inserted retrospectively w.e.f.1.4.1988, taxability of income shall be in the year of receipt. In theinstant case, as noticed above, the Tribunal has rightly held that theamountreceivedbytheassesseeonaccountofenhanced . Learned counsel for the respondent-Revenue submittedthat the enhanced compensation that was received by the assesseewas taxable in the year of receipt. In support of his submission,learned counsel placed reliance on a judgment of the Supreme Courtin Commissioner of Income-tax v. Ghanshyam (HUF) [2009] 315ITR 1 (SC). TheSupreme Court in Ghanshyam (HUF)’s case(supra) had held that irrespective of the fact, whether litigation withregard to award of compensation had attained finality or not, underSection 45(5(b) of the Act, which was inserted retrospectively w.e.f.1.4.1988, taxability of income shall be in the year of receipt. In theinstant case, as noticed above, the Tribunal has rightly held that theamountreceivedbytheassesseeonaccountofenhanced compensationwouldbeliabletobeincludedinthe income chargeable to tax in the current assessment year . In view of the above, the appeal is dismissed. AJAY KUMAR MITTAL)JUDGE ( October 27, 2010*rkmalik* (ADARSH KUMAR GOEL)JUDGE