Tarun Kanti Roy, Kolkata V. ITO, Wd-2(4), Burdwan, Burdwan

ITA 1778/KOL/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1819 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 1 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 01-08-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: PINAKI MUKHERJEE
• Assessee Lawyers: ANIKESH BANERJEE; MRS SASWATI MITRA DUTTA
• Keywords: Reopening of assessment; Period of limitation
• Section: 45(5)

Judgement Text

ITA NO.1778/KOL/2017 TARUN KANTI ROY A.Y.2006-07 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH SMC K OLKATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM] ITA NO.1778/KOL/2017 ASSESSMENT YEAR : 2006-07 TARUN KANTI ROY -VERSUS- I.T.O., WARD-2 (4 ) BURDWAN BURDWAN (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI ANIKESH BANERJEE, & MRS . SASWATI MITRA DUTTA,ADVOCATE FOR THE RESPONDENT: SHRI PINAKI MUKHERJEE, ADDL.CI T DATE OF HEARING : 02.08.2018. DATE OF PRONOUNCEMENT : 05.09.2018. ORDER PER J.SUDHAKAR REDDY, AM: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX-(A)-BURDWAN DATED 29.06. 2016 PASSED U/S 250 OF THE INCOME TAX ACT, 1961 (THE ACT ) RELATING TO A.Y. 2006-07. 2. THERE IS A DELAY OF 311 DAYS IN FILING OF THE A PPEAL. THE ASSESSEE SUBMITTED A PETITION FOR CONDONATION OF DELAY, WHICH IS SUPPORT ED BY COPIES OF MEDICAL CERTIFICATES ISSUED BY THE DOCTORS AS WELL AS AN AFFIDAVIT. THE ASSESSEE PLEADED THAT THE DELAY BE CONDONED AND THE APPEAL OF THE ASSESSEE BE ALLOWED. THE LEARNED DEPARTMENTAL REPRESENTATIVE OPPOSED THE SAME ON THE GROUND THAT THE ASSESSEE HAS NOT EXPLAINED EACH DAY OF THE DELAY AS REQUIRED UNDER LAW. 3. AFTER HEARING RIVAL CONTENTIONS, I AM OF THE VIE W THAT THIS IS A FIT CASE FOR CONDONATION OF DELAY. THE ASSESSEE HAD PRODUCED SUF FICIENT EVIDENCE TO DEMONSTRATE THAT HE WAS WHOLLY PREVENTED BY SUFFICIENT CAUSE FO R SOME PERIOD FROM FILING THE APPEAL WITHIN THE PERIOD OF LIMITATION. THOUGH THE RE ARE CERTAIN GAPS IN THE EXPLANATION, I AM OF THE CONSIDERED OPINION THAT I N THE LARGER INTEREST OF JUSTICE THE ITA NO.1778/KOL/2017 TARUN KANTI ROY A.Y.2006-07 2 DELAY SHOULD BE CONDONED AND THE APPEAL OF THE ASSE SEE BE ADMITTED ON PAYMENT OF COST OF RS.10,000/-. THE ASSESSEE IS DIRECTED TO P AY COST OF RS.10,000/-. 4. WE NOW TAKE UP THE MATTER ON MERITS. THE ASSESSE E IS AN INDIVIDUAL AND DERIVES INCOME FROM BUSINESS. THE ISSUE BEFORE ME IS TAXABI LITY OF ENHANCED COMPENSATION GRANTED BY THE HONBLE HIGH COURT FROM L & LR DEPAR TMENT, GOVT. OF WEST BENGAL AS WELL AS TAXABILITY OF INTEREST THEREON FOR ACQUISIT ION OF LAND. THE ASSESSEE HAD INITIALLY RECEIVED COMPENSATION OF AN AMOUNT OF RS.28,80,307/ - TOWARDS LAND ACQUISITION IN THE YEAR 1988. WHEN THE MATTER WAS CARRIED IN APPEAL BE FORE THE HONBLE HIGH COURT, THE COMPENSATION WAS ENHANCED AND THE ASSESSEE RECEIVED RS.4,16,516/- AS THE 1/4 TH CO- OWNER ON 21.06.2005 RELEVANT TO A.Y.2005-06. HE AL SO RECEIVED INTEREST FROM THE PERIOD 21.06.1988 TO 20.07.2005 AMOUNTING TO RS.10, 54,827/-. THE LD. CIT(A) CONFIRMED THE ACTION OF THE AO. AGGRIEVED THE ASSES SEE IS IN APPEAL BEFORE ME. 5. THOUGH THE ASSESSEE HAS RAISED SIX GROUNDS OF AP PEAL CHALLENGING BOTH THE REOPENING OF ASSESSMENTS, AS WELL AS ASSESSMENT OF INCOME UNDER THE HEAD CAPITAL GAINS AND UNDER THE HEAD OTHER SOURCES , DURING THE COURSE OF APPELLATE PROCEEDINGS THE LD. COUNSEL FOR THE ASSESSEE DID NOT PRESS GROU ND NO.1 TO 4,5 AND 6. HE HAS ONLY PRESSED GROUND NO.3 WHICH READS AS FOLLOWS :- 3. FOR THAT THE LD. ASSESSING OFFICER ERRED IN ADD ING RS.416,516/- U/S 45(5) OF THE I.T.ACT, 1961 WITH THE TOTAL INCOME OF THE ASSE SSEE. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ENTIRE INTEREST OF RS.10,54,827/- CANNOT BE BROUGHT TO TAX IN THIS YEAR AMOUNTING TO RS.62,048/- ACCRUED DURING THE YEAR. HE RELIED ON THE DECISION OF THE HONBLE SUP REME COURT IN THE CASE OF RAMA BAI VS CIT [1991] 54 TAXMAN 496 (SC) AND REQUESTED INTE REST WHICH IS ACCRUED DURING THE CURRENT FINANCIAL YEAR ONLY HAS TO BE BROUGHT TO TA X ON AN ACCRUAL BASIS. THE LD. DEPARTMENTAL REPRESENTATIVE RELIES ON SECTION 145A OF THE ACT. 6. IN MY VIEW THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF M/S RAMA BAI VS CIT, IS BINDING AND HENCE ACCORDINGLY T HE INTEREST INCOME EARNED SHOULD ITA NO.1778/KOL/2017 TARUN KANTI ROY A.Y.2006-07 3 BE SPREAD OVER THE PERIOD OF YEARS, FOR WHICH IT HA S BEEN GRANTED. THE HONBLE SUPREME COURT IN THE CASE OF RAMA BAI VS CIT [1991 ] 54 TAXMAN 496 (SC) HELD AS FOLLOWS : IN VIEW OF THE DECISIONS IN CIT V. T.N.K.GOVINDARAJ ULU CHETTY [1987] 165 ITR 231 (SC), T.N.K. GOVINDARJULU CHETTY V. CIT [1973] 87 ITR 22 (MAD.) AND MRS. KHORSHED SHAPOOR CHENAI V. ACED [1980] 122 ITR 21 ( SC) IT S CLEAR THAT THE INTEREST ON ENHANCED COMPENSATION UNDER THE LAND AC QUISITION ACT COULD NOT BE TAKEN TO HAVE ACCRUED ON THE DATE OF THE ORDER OF T HE COURT GRANTING ENHANCED COMPENSATION BUT HAD TO BE TAKEN AS HAVING ACCRUED YEAR AFTER YEAR FROM THE DATE OF DELIVERY OF POSSESSION OF THE LANDS TILL TH E DATE OF SUCH ORDER. 7. RESPECTFULLY FOLLOWING THIS JUDGMENT OF THE HON BLE SUPREME COURT I DIRECT THE AO TO COMPUTE ONLY THAT INTEREST ON ACCRUAL BAS IS IN THE IMPUGNED ASSESSMENT YEAR. IF THE INTEREST ACCRUED DURING THE IMPUGNED A SSESSMENT YEAR IS RS.62,048/- AS CLAIMED BY THE ASSESSEE, THE ADDITION SHOULD BE RES TRICTED TO THIS COUNT ONLY. THE BALANCE IS DELETED. 8. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED IN PART. O RDER PRONOUNCED IN THE COURT ON 05.09.2018. SD/- [ J.SUDHAKAR REDDY ] ACCOUNTANT MEMBER DATED : 05.09.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.SHRI TARUN KANTI ROY, RAMLAL BOSE LANE, RADHANAGA R, BURDWAN-713101. 2. I.T.O., WARD-2(4), BURDWAN. 3. C.I.T.(A)- BURDWAN 4. C.I.T-BURDWAN. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES ITA NO.1778/KOL/2017 TARUN KANTI ROY A.Y.2006-07 4