Kamlesh Kalyanchand Lalwani, HUF, Nashik V. Income-tax Officer,

ITA 1892/PUN/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 9312 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-02-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2001-2002
• Appeal Filed On: 20-10-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: DR VIVEK AGGARWAL
• Keywords: Deemed to accrue or arise in india; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 45(5); 234B; 147; 148; 28

Judgement Text

SMC IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, PUNE . , BEFORE SHRI D. KARUNAKARA RAO, AM . / ITA NO.1891/PUN/2014 / ASSESSMENT YEAR : 2001-02 KALYANCHAND MANAKCHAND LALWANI (HUF), MAHAVIR PATH, A/P. MANMAD, DIST. NASHIK 423 104 MAHARASHTRA PAN : AAAHL6657A . /APPELLANT VS. INCOME-TAX OFFICER, WARD-3(3), MALEGAON . / RESPONDENT . / ITA NO.1892/PUN/2014 / ASSESSMENT YEAR : 2001-02 KAMLESH KALYANCHAND LALWANI (HUF), MAHAVIR PATH, A/P. MANMAD, DIST. NASHIK 423 104 MAHARASHTRA PAN : AADHK3386G . /APPELLANT VS. INCOME-TAX OFFICER, WARD-3(3), MALEGAON . / RESPONDENT . / ITA NO.1893/PUN/2014 / ASSESSMENT YEAR : 2001-02 MANGLESH KALYANCHAND LALWANI (HUF), MAHAVIR PATH, A/P. MANMAD, DIST. NASHIK 423 104 MAHARASHTRA PAN : AAAHL7117F . /APPELLANT VS. INCOME-TAX OFFICER, WARD-3(3), MALEGAON . / RESPONDENT / APPELLANT(S) BY : MS. DEEPA KHARE / RESPONDENT BY : DR. VIVEK AGGARWAL, CIT-DR / DATE OF HEARING : 12.02.2018 / DATE OF PRONOUNCEMENT:23.02.2018 2 / ORDER PER D. KARUNAKARA RAO, AM : THERE ARE 3 APPEALS FILED BY DIFFERENT ASSESSEES UN DER CONSIDERATION AGAINST THE SEPARATE ORDERS OF CIT(A)-I, NASHIK COMMONLY DA TED 18-08-2014 FOR THE COMMON A.Y. 2001-02. ALL THESE APPEALS ARE FILED WITH IDE NTICAL GROUNDS AS WELL AS AN ADDITIONAL GROUND. 2. LD. COUNSEL FOR THE ASSESSEE BROUGHT MY ATTENTIO N TO THE ADDITIONAL GROUND AND SUBMITTED THAT THE LEGAL ISSUE RAISED IN IT REL ATES TO THE APPLICABILITY OF PROVISIONS OF THE PROVISO TO SECTION 147 OF THE ACT. AS PER T HE LD. COUNSEL FOR THE ASSESSEE, THERE IS NO FAILURE ON PART OF THE ASSESSEE IN MATT ERS OF TRUE AND FULL DISCLOSURE OF FACT. THEREFORE, THE REASONS RECORDED BY THE AO TH AT REVOLVES AROUND THE APPLICABILITY OF SUPREME COURT JUDGMENT IN THE CASE OF CIT VS. GHANSHYAM (HUF) 315 ITR 1 (SC), ARE UNSUSTAINABLE AND THEREFORE, TH E REASSESSMENT PROCEEDINGS ARE BAD IN LAW. ITA NO.1891/PUN/2014 SHRI KALYANCHAND MANAKCHAND LALWANI (HUF) (A.Y. 2001-02) 3. GIVING BRIEF FACTS OF THE CASE, WHICH ARE CULLED FROM THE APPEAL FILED BY SHRI KALYANCHAND MANAKCHAND LALWANI (HUF) FOR THE A.Y. 2 001-02, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE FILED THE RETU RN OF INCOME AND OFFERED THE LONG TERM CAPITAL GAINS AND INTEREST INCOME FOR TAXATION . ASSESSEE EARNED LONG TERM CAPITAL GAINS RELATING TO THE INCOME OF ENHANCED CO MPENSATION OF LAND. ASSESSEE OWNS A LAND AND THE GOVERNMENT ACQUIRED THE SAME @ RS.15/- PER SQ. MTR. ASSESSEE DISPUTED THE COMPENSATION AND FILED A CASE BEFORE THE DISTRICT COURT. VIDE THE ORDER DATED 30-06-1999, THE COMPENSATION WAS IN CREASED TO RS.340/- PER UNIT. AO REOPENED THE ASSESSMENT BY ISSUE OF NOTICE U/S.1 48 OF THE ACT ON 22-03-2005 AND AO PASSED REASSESSMENT ORDER DATED 2 8-11-2005. IN THE APPEAL BY THE GOVERNMENT BEFORE THE HIGH COURT, THE HONBLE H IGH COURT PASSED AN ORDER 3 DETERMINING THE RATE AT RS.53/- PER SQ.MTR. AO CON SIDERED THE SAME IN THE REASSESSMENT. HOWEVER, THE MATTER TRAVELLED TO THE SUPREME COURT ON THE ISSUE OF CORRECTNESS OF THE ENHANCED COMPENSATION. EVENTUAL LY, THE SUPREME COURT VIDE ITS JUDGMENT DATED 25-03-2010 ENHANCED THE COMPENSATION AWARDED BY THE HIGH COURT WHICH WAS DETERMINED THE COMPENSATION AT RS.53 PER SQ. MTR. SUPREME COURT ENHANCED THE SAME TO RS.66.25 PER SQ.MTR. ON FINDI NG THE ENHANCED COMPENSATION, AO PROPOSED TO TREAT THE SAID ENHANCED COMPENSATION AS INCOME OF THE ASSESSEE FOR THE A.Y. 2001-02. ON THIS ISSUE, AO OPINED THE SAID CONSIDERATION WAS NOT OFFERED BY THE ASSESSEE EVEN IN THE YEAR A.Y. 2010-11 AND THER EFORE THE AO RE-ASSESSED THE INCOME OF THE ASSESSEE FOR THE YEAR 2001-02 INVOKIN G THE PROVISIONS OF THE PROVISO TO SECTION 147 OF THE ACT. THE REASONS RECORDED BY TH E AO REFER TO HIS RELIANCE ON THE JUDGMENT OF SUPREME COURT IN THE CASE OF CIT VS. GH ANSHYAM (HUF) (SUPRA). EVENTUALLY, THE AO PROCEEDED TO MAKE THE REASSESSME NT TAXING THE ENHANCED INCOME AND INTEREST IN THE A.Y. 2001-02, THE YEAR OF ACQU ISITION OF LAND BY THE GOVERNMENT. 4. DURING THE SECOND ROUND OF THE REASSESSMENT PROC EEDINGS, ASSESSEE TOOK OBJECTION TO THE VALIDITY OF THE RE-OPENING U/S.14 7 OF THE ACT. FURTHER, ASSESSEE ALSO QUESTIONED THE PROPOSED TAXABILITY OF THE ENHANCED COMPENSATION IN THE YEAR OF RECEIPT, I.E. A.Y. 2010-11 NOT IN THE YEAR OF SALE - 2001-02. TO THAT EXTENT, CONSIDERING THE FACT THAT SUPREME COURT JUDGMENT EN HANCING THE COMPENSATION FROM RS.53 PER SQ.MTR TO RS.66.25 PER SQ.MTR IS CRYSTALL ISED ONLY ON 25-03-2010 AND, THEREFORE THE SUM IS TAXABLE IN THE A.Y. 2010-11 ON RECEIPT BASIS, WAS ARGUED. FURTHER, ASSESSEE SUBMITTED THAT HE DID NOT HAVE TH E BENEFIT OF THE REVISED FIGURES RS.66.25 PER SQ.MTR ORDERED BY THE SUPREME COURT AT THE TIME WHEN THE ASSESSMENTS/REASSESSMENTS WERE FINALISED IN THE PAS T UNDER VARIOUS PROVISIONS OF THE ACT. ACCORDING TO THE ASSESSEE, WHEN THE ASSESSEE DISCLOSED THE FACTS FULLY AND TRULY IN THE RETURN OF INCOME THAT ARE NECESSARY FOR COMP LETION OF THE ASSESSMENT, THE AO CANNOT INVOKE THE PROVISIONS OF PROVISO TO SECTION 147 OF THE ACT BASED ON THE SUBSEQUENT DEVELOPMENTS ON THAT ISSUE. FURTHER, AS SESSEE REASONED THAT THE 4 SUPREME COURT JUDGMENT IN THE CASE OF CIT VS. GHANS HYAM (HUF) (SUPRA) IS NOT APPLICABLE IN VIEW OF THE FACT THAT BIFURCATION OF INTEREST UNDER VARIOUS SECTIONS OF THE LAND ACQUISITION ACT, 1894 WERE ALSO NOT AVAILA BLE. ASSESSEE ALSO RELIED ON THE PROVISIONS OF SECTION 45(5) AND THE PROVISIONS OF S ECTION 155(16) OF THE ACT, WHICH ADVOCATES FOR TAXATION OF SUCH COMPENSATION IN THE A.Y. 2010-11 ON RECEIPT BASIS ONLY. HOWEVER, AO DISMISSED THE SAID ARGUMENTS AND HELD THAT THE MATTER OF TAXATION OF COMPENSATION, ENHANCED COMPENSATION AND INTEREST IS TAXABLE IN THE A.Y. 2001-02. INTERESTINGLY, AO CITES THAT SUCH RECEIPT S ARE TAXABLE ON THE RECEIPT BASIS AND THE INTEREST IS PART OF THE COMPENSATION (PARA 5.4 OF THE ASSESSMENT ORDER) AND HOWEVER TAXED THE SAME IN THE A.Y. 2001-02 ON THE B ASIS OF DATE OF ACQUISITION OF THE LAND BY THE GOVERNMENT. 5. DURING THE FIRST APPELLATE PROCEEDINGS, THE ASSE SSEE MADE ELABORATE SUBMISSIONS VIDE HIS LETTER DATED 20-02-2013. IT I S THE SUBMISSION OF ASSESSEE THAT THE ORIGINAL COMPENSATION RECEIVED BY THE ASSESSEE FOR ACQUISITION OF THE LAND WAS ALREADY OFFERED TO TAX IN THE YEAR UNDER CONSIDERAT ION ON THE BASIS OF THE BINDING HIGH COURT JUDGMENT. THE INTEREST PORTION OF THE S AME WAS ALSO OFFERED AND TAXED. WHEN IT COMES TO THE ENHANCED COMPENSATION, ASSESSE E RAISED VARIOUS OBJECTIONS AND ARGUED THAT THE COMPLETED ASSESSMENT FOR A.Y. 2 001-02 CANNOT BE REOPENED FOR TAXING THE ENHANCED COMPENSATION IN VIEW OF THE PRA CTICAL DIFFICULTIES THAT MAY ARISE, WHICH ARE MENTIONED BY THE SUPREME COURT AGAINST RE OPENING OF THE COMPLETED ASSESSMENTS CONSIDERING THE TAXATIONAL DIFFICULTIES INVOLVED THEREIN. FURTHER, ASSESSEE SUBMITTED THAT THE PROPOSAL TO REOPEN THE ASSESSMENT CONSTITUTES A CHANGE OF OPINION IN THE MATTER. FURTHER, ASSESSEE SUBMI TTED THAT THERE IS NO FAILURE ON THE PART OF THE ASSESSEE WHEN IT COMES TO FULL AND TRUE DISCLOSURE OF THE FACTS NECESSARY FOR COMPLETION OF THE ASSESSMENT. FURTHER, IT IS S UBMITTED THAT THE SUPREME COURT JUDGMENT IN THE CASE OF CIT VS. GHANSHYAM (HUF) (SU PRA) IS INAPPLICABLE IN VIEW OF THE FACT OF NON-AVAILABILITY OF BIFURCATION OF INTE REST AND ENHANCED COMPENSATION OUT OF THE SAID ENHANCED COMPENSATION. AS PER THE ASSE SSEE, WHEN THE INTEREST PORTION 5 IS NOT DETERMINED BY THE SUPREME COURT, THE AO CANN OT ASSUME JURISDICTION FOR TAXING THE SAME IN A.Y. 2001-02 ON THE BASIS OF REC EIPT BY REOPENING THE COMPLETED REASSESSMENT. FURTHER, IT IS SUBMITTED THAT THE SA ID SUPREME COURT JUDGMENT IN THE CASE OF CIT VS. GHANSHYAM (HUF) (SUPRA) IS DATED 1 6-07-2009 AND THE FINAL ORDER OF ASSESSMENT WAS PASSED ON 29-12-2008 U/S.143(3) R.W. S. 254 OF THE ACT. THEREFORE, AS PER THE ASSESSEE, ON THE GROUND OF DEBATABILITY ALSO, THE PROVISIONS OF SECTION 148 OF THE ACT SHOULD NOT BE INVOKED. ON THIS LEGAL IS SUE, THE CIT(A) REFERRED TO THE SAID SUPREME COURT JUDGMENT (SUPRA) ON ONE SIDE AND THE AMENDED PROVISIONS OF SECTION 45 OF THE ACT WHICH PROVIDES FOR TAXATION OF THE EN HANCED COMPENSATION IN THE YEAR IN WHICH THE FINAL JUDGMENT OF THE SUPREME COURT IS PASSED, ON THE OTHER. FINALLY, CIT(A) OBSERVED THAT THE AMENDED PROVISION APPLY TO THE A.Y. 2015-16 AND SUBSEQUENT YEARS. EVENTUALLY, THE CIT(A) DISMISSED THE SUBMISSION OF THE ASSESSEE AND HELD THE TAXABILITY OF THE ENHANCED COMPENSATIO N IN THE A.Y. 2001-02. CONTENTS OF PARA NO.6 OF THE CIT(A) ARE RELEVANT IN THIS REG ARD. 6. AGGRIEVED WITH THE SAME, THE ASSESSEE IS IN APPE AL BEFORE THE TRIBUNAL WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW THE LEARNED CIT (A) -I IS NOT JUSTIFIED IN NOT DISPOSING OF THE GROUNDS OF APPEAL. THE SAME MAY PLEASE BE CONSIDERED IN ITS PROPER PERSPECTIVE ALONG WITH THE NUMBER OF DECISIONS QUOTED IN SUPPORT OF GROUNDS OF APPEAL AND THE APPELLANT'S CO NTENTION MAY BE ACCEPTED AND THE ORDER OF THE LEARNED ASSESSING OFFICER MAY PLEASE B E CANCELLED. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED THE CIT (A)-I IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER'S ACTION OF REOPENING THE ASSESSMENT WHEN NO ESCAPEMENT OF INCOME IS OCCURRED / FOUND. THE ASSESSMENT MAY PLEASE BE CANCELLED. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT (A)- I IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF LEAR NED ASSESSING OFFICER OF REOPENING THE ASSESSMENT ON THE BASIS OF CHANGE OF OPINION. THE ASSESSMENT MAY BE CANCELLED. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT (A)-I IS NOT JUSTIFIED IN CONFIRMING THE ASSESS MENT ORDER DATED 23.12.2011 IN VIOLATION OF THE PRINCIPLE LAID DOWN IN THE DECISION OF THE BOMBAY HIGH COUNT IN THE CASE ASIAN PAINTS LTD. VS. DCIT (2008) 296 ITR 90 (BOM.) THE ORDER MAY BE CANCELLED. 6 5. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED ASSESSING OFFICER AND THE LD. CIT(A) IS NOT JUSTIFI ED IN IGNORING THE PROVISIONS OF SECTION 45(5)(B) PROVIDING THE SETTLE D LAW THAT THE ENHANCED COMPENSATION IS TAXABLE IN THE YEAR OF RECEIPT AND NOT IN THE YEAR OR TRANSFER. THE ADDITION MAY PLEASE BE CANCELLED. 6. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED CIT (A)-I IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN TAXING THE ENHANCED COMPENSATION IN THE YEAR UNDER CONSIDERATION WHEN THE ENHANCED COMPENSATION WAS CR YSTALLIZED IN F.Y. 2009-10 I.E. A.Y. 2010-1 1. THE ORDER MAY BE CANCELL ED. 7. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT (A)-I IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF TAXING THE ENHANCED COMPENSATION IN THE YEAR UNDER CONSIDERATION I.E. A .Y.2001-02 WHEN AS PER SECTION 45(5)(B) IT IS TAXABLE IN THE YEAR OF R ECEIPT OF ENHANCED COMPENSATION. THE ENHANCED COMPENSATION IS RECEIVED IN A.Y. 2010-11. THE ASSESSMENT MAY PLEASE BE CANCELLED. 8. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT (A)-I IS NOT JUSTIFIED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN TAXING THE ENTIRE INTEREST COMPONENT IN THE YEAR UNDER CONSIDERATION I.E. A.Y.2001-02 WHEN ENHANCED COMPON ENT OF INTEREST IS TAXABLE IN THE YEAR OF RECEIPT I.E. A. Y. 2010-11. THE ORDER MAY PLEASE BE CANCELLED. 9. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED ASSESSING OFFICER IS NOT JUSTIFIED IN REJECTING THE APPLICABILITY OF AMENDED PROVISIONS OF PROVISO TO SECTION 45(5)(B) WHEN THE SAME ARE OF DECLARATORY AND CURATIVE NATURE. THE BENEFIT OF SUCH PROVISIONS SHOULD HAVE BEEN EXTENDED TO THE APPELLANT AND THE ADDITIONS MADE MA Y PLEASE BE CANCELLED. WITHOUT PREJUDICE TO THE ABOVE: 10. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE A ND IN LAW THE LEARNED CIT (A)-I IS NOT JUSTIFIED CONFIRMING THE ACTION OF THE LEARNED ASSESSING OFFICER IN NOT ALLOWING THE DEDUCTION OF INTEREST O F RS.1,69,097 WHICH IS ALREADY TAXED IN EARLIER YEARS. THERE IS DOUBLE TAX ATION. THE DEDUCTION MAY BE ALLOWED. 11. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW THE LEARNED IS NOT JUSTIFIED IN CONFIRMING THE LEVY OF THE INTERES T UNDER SECTION 234A, 234B AS THE APPELLANT COULD NOT FORESEE THE FINAL A MOUNT OF COMPENSATION. THE SAME MAY PLEASE BE CANCELLED. 7. BEFORE ME, ASSESSEE RAISED AN ADDITIONAL GROUND AND THE SAME READS AS UNDER: WHETHER ON FACTS AND CIRCUMSTANCES OF THE CASE, T HE REASSESSMENT PROCEEDINGS U/S 147 INITIATED BY ISSUE OF NOTICE/S SERVED ON 08/03/ 2011 AFTER EXPIRY OF FOUR YEARS IN ABSENCE OF REASON TO BELIEVE THAT THERE WAS FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT WITHIN THE MEANING OF FIRST PROVISO TO SECTION 147. 8. BEFORE ME, LD. COUNSEL FOR THE ASSESSEE BROUGHT MY ATTENTION TO THE ADDITIONAL GROUND AND MENTIONED THAT THE SAME IS RE QUIRED TO BE ADMITTED AND 7 ADJUDICATED IN FAVOUR OF THE ASSESSEE. LD. COUNSEL SUBMITTED THAT THERE IS NO FAILURE OF DISCLOSURE ON PART OF THE ASSESSEE AS PE R THE SUPREME COURT JUDGMENT IN THE CASE OF THE ASSESSEE IN A SUBSEQUENT DEVELOP MENT. FURTHER, RELYING ON THE CONSIDERING THE FILING OF SUPREME COURT JUDGMEN T IN THE CASE OF CIT VS. GHANSHYAM (HUF) (SUPRA). LD. COUNSEL SUBMITTED THA T THE RATIO SUPPORTS THE TAXABILITY IN THE YEAR OF RECEIPT. IN THIS REGARD , LD. COUNSEL FOR THE ASSESSEE FILED THE FOLLOWING WRITTEN SUBMISSIONS TO DEMONSTRATE TH E INAPPLICABILITY OF THE PROVISIONS OF SECTION 147 OF THE ACT. FOR THE SAKE OF COMPLETENESS THE SAME ARE EXTRACTED HERE AS UNDER : IN IDENTICAL CONTEXT DELHI HIGH COURT IN CASE OF C ENTRAL INDIA ELECTRIC SUPPLY COMPANY V ITO REPORTED IN 333 ITR 237 (PAGE 31 OF L EGAL COMPILATION) HELD THAT THERE WAS NO LACK OF DISCLOSURE BY THE ASSESSEE. T HAT WAS, OF COURSE, APART FROM THE FACT THAT THE ASSESSEE COULD HARDLY DISCLOSE A S TO WHAT WOULD BE THE COMPENSATION, WHICH HE MIGHT GET ULTIMATELY IF THE PLEA OF ENHANCEMENT WAS SUSTAINED. THE FACT REMAINED THAT COPY OF THE REPOR T OF THE BOARD OF DIRECTORS HAD BEEN FILED IN WHICH THE FACT OF PENDING ARBITRATION PROCEEDINGS FOR ENHANCEMENT OF COMPENSATION HAD BEEN MENTIONED. IT IS NOT THE D UTY OF THE ASSESSEE TO PIN- POINT WHAT INFERENCE HAS TO BE- DRAWN BY THE ASSESSING AUTHORITY AS LONG AS FULL, COMPLETE AND TRUTHFUL DISCLOSURE HAS BEEN MADE OF, PRIMARY FACTS', WHICH, IN FACT, WAS MADE IN THE INSTANT CASE. THUS, THERE WAS NOTHI NG, WHICH WAS NOT SET OUT, WHICH OUGHT TO HAVE BEEN SET OUT AS THE FACTUM OF A PPEAL PENDING WAS DISCLOSED. THERE WAS NO FINALITY EMERGING IN MATTERS OF ENHANC EMENT OF COMPENSATION AS NONE OF THE PARTIES COULD CONTEMPLATE IN ADVANCE AS TO WHAT WOULD BE THE FATE OF THE APPEAL PROCEEDINGS. THE FACTS OF THE INSTANT CA SE SHOWED THAT THE AWARD WAS INTERFERED WITH IN APPEAL AND AGAIN BY THE SUPREME COURT. THE FINAL PICTURE EMERGED ONLY WHEN THE SUPREME COURT PRONOUNCED ITS JUDGMENT. PUNJAB & HARYANA HIGH COURT IN CASE OF MUKHTIAR SINGH SANDHU V ITO REPORTED IN 160 ITR 526 (PAGE 27 OF LEGAL COMPILATION ) HELD THAT CERTAIN LANDS OF ASSESSEE WERE ACQUIRED AND COMPENSATION WAS PAID IN 1974. HIGH COURT ENHANCED COMPENSATION IN NOVEMBER, 1981.INTEREST ON ENHANCED COMPENSATION WAS PAID ON 15-6-1982 - ITO THEREFORE, ISSUED NOTIC ES UNDER SECTION 147/148 THAT AMOUNT OF INTEREST RECEIVED BY ASSESSEE FOR PE RIOD 5-10-1974 TO 6-5-1982 SHOULD BE SPREAD OVER DIFFERENT ASSESSMENT YEARS. T ILL AMOUNT OF INTEREST HAD BECOME DUE OR WAS ACTUALLY PAID TO ASSESSEE ON 15-6 -1982, HE COULD NOT BE HELD GUILTY OF NOT DISCLOSING TRULY AND CORRECTLY MATERI AL FACTS, THEREFORE, IMPUGNED NOTICES WERE NOT VALID IN LAW. SUPREME COURT IN CASE OF ASSOCIATED STONE INDUSTRIE S (KOTAH) LTD V CIT REPORTED IN 224 ITR 560 (PAGE 14 OF LEGAL COMPILATION) HELD THAT THE PRIMARY FACT IN THE INSTANT CASE WAS THE LEASE AGREEMENT ENTERED INTO B Y THE APPELLANT WITH THE KOTAH STATE DATED 2-5-1945. IT WAS PLACED BEFORE TH E ITO AT THE TIME OF ORIGINAL ASSESSMENTS. IT WAS NOT THE DUTY OF THE ASSESSEE TO DRAW THE ATTENTION OF THE ITO TO ANY PARTICULAR CLAUSE OR PORTION OF THE DOCU MENT AND INVITE HIM TO DRAW ANY PARTICULAR INFERENCE THEREFROM, MOREOVER, IN TH E SUIT THE UNION OF INDIA AND THE STATE OF RAJASTHAN WERE PARTIES. THE INTERIM IN JUNCTION PASSED BY THE COURT FROM ASSESSING OR LEVYING ANY INCOME-TAX AGAINST TH E ASSESSEE-COMPANY WAS VARIED ON THE REPRESENTATION MADE BY THE UNION OF I NDIA, BY LATER ORDERS. INDEED, THE UNION OF INDIA AND THE COMMISSIONER HAD FILED W RITTEN STATEMENTS IN THE SUIT. 8 THE ORDER OF INJUNCTION WAS WITHIN THE KNOWLEDGE OF THE ITO, AS COULD BE SEEN FROM THE ORIGINAL ASSESSMENTS. THE ITO WAS AWARE OF THE TRIANGULAR DISPUTE BETWEEN THE ASSESSEE- COMPANY, STATE OF RAJASTHAN A ND UNION OF INDIA PENDING BEFORE THE DISTRICT COURT. WHAT WAS MORE, THE ORDER OF INJUNCTION TO REFRAIN FROM PROCEEDING WITH THE ASSESSMENTS WAS SERVED ON THE I TO WHICH WAS LATER MODIFIED. IN VIEW OF THESE SALIENT FEATURES, THE HI GH COURT TOTALLY ERRED IN HOLDING THAT THERE WAS ANY OMISSION ON THE PART OF THE APPE LLANT-COMPANY TO FULLY ANY TRULY DISCLOSE MATERIAL OR PRIMARY FACTS NECESSARY FOR THE ASSESSMENTS FOR THE YEARS IN QUESTION. THUS, THE REASSESSMENT PROCEEDIN GS FOR THE ASSESSMENT YEARS 1950-51 TO 1956-57 UNDER SECTION 34(1)(A) WERE INVA LID. IT IS THEREFORE RESPECTFULLY SUBMITTED THAT THE THE RE BEING NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY ALL THE MATE RIAL AND PRIMARY FACTS AND THE REASONS RECORDED BEING DO NOT SPEAK OF SUCH FAILURE , THE REASSESSMENTS ARE INVALID IN LAW IN VIEW OF THE SETTLED PRINCIPLE OF LAW AS DECIDED BY VARIOUS COURTS INCLUDING JURISDICTIONAL HIGH COURT. 9. FROM THE ABOVE, THE REOPENING IS HELD INVALID IN MANY OF SUCH CASES WITH SPECIAL REFERENCE TO THE DELHI HIGH COURT JUDGMENT IN THE CASE OF CENTRAL INDIA SUPPLY COMPANY VS. ITO 333 ITR 237 IS VERY CLOSE TO THE FACTS OF THE PRESENT CASE. 10. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIE D HEAVILY ON THE ORDERS OF THE AO AND THE CIT(A) ON MERITS. REGARDING THE ADD ITIONAL GROUND/LEGAL ISSUE, LD. DR RELIED ON THE REASONS RECORDED BY THE AO AND BROUGHT MY ATTENTION TO THE CONTENTS OF PARA NO.6.1 OF THE ORDER OF CIT(A). HE SUBMITTED THAT THE ISSUANCE OF NOTICE U/S.148 FOR THE SECOND TIME FOR GIVING EF FECT TO THE JUDGMENT OF SUPREME COURT DELIVERED ON 25-03-2010 IS SUSTAINABL E AS THE SAME IS INTENDED FOR TAXING THE ENHANCED COMPENSATION IN THE YEAR OF ACQUISITION OF LAND BY THE GOVERNMENT. HOWEVER, THERE IS NO EXPLANATION AS TO HOW THE YEAR OF SAID SUPREME COURT JUDGMENT DATED 25-03-2010 CREATES LIA BILITY OF TAXATION ON THE ENHANCED COMPENSATION IN THE A.Y. 2001-02, THE YEAR OF ACQUISITION OF LAND BY THE GOVERNMENT. 11. I HAVE HEARD BOTH THE SIDES AND PERUSED THE WRI TTEN SUBMISSIONS FILED BY BOTH THE SIDES. I HAVE ALSO GONE THROUGH THE ORDER S OF THE REVENUE AND THE REASONS RECORDED BY THE AO FOR REOPENING OF THE COM PLETED ASSESSMENT U/S.148 OF THE ACT. THE ISSUE WHICH REQUIRES MY ATTENTION IN THIS APPEAL RELATES TO, IF 9 THERE IS FAILURE ON THE PART OF ASSESSEE TO DISCLOS E FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR COMPLETION OF THE REASSESSMENT WITHIN THE MEANING OF THE FIRST PROVISO TO SECTION 147 OF THE ACT. FOR THIS PURPOS E, I EXTRACT THE REASONS RECORDED BY THE AO ON 05-11-2011 AND THE SAME READ AS UNDER : REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASS ESSMENT IN THIS CASE, ASSESSMENT FOR THE A.Y. 2001-02 WAS C OMPLETED U/S.143(3) R.W.S.147 ON 29-12-2008 ON TOTAL INCOME OF RS.4,64, 580/-, WHICH CONSISTED OF LONG TERM CAPITAL GAIN OF RS.3,18,796/- AND INTEREST ON ENHANCED COMPENSATION OF RS.25,637/-. THIS REASSESSMENT WAS COMPLETED ON THE BASIS OF CAL CULATION OF COMPENSATION OF LAND AS DETERMINED BY THE MUMBAI HIGH COURT AT RS.5 3/- PER SQ. MTR. NOW, AS PER THE INFORMATION GATHERED, THE SUPREME C OURT VIDE ORDER DATED 25-03-2010, HAS ENHANCED THE COMPENSATION AWARDED B Y THE HIGH COURT, MUMBAI FROM RS.53/- PER SQ. MTR TO RS.66.25. CONSEQUENTLY , THE ENHANCED COMPENSATION AT THE SAID RATE IS TAXABLE ALONG WITH INTEREST FOR THE YEAR UNDER CONSIDE RATION. MOREOVER, IN VIEW OF THE SUPREME COURT DECISION IN THE CASE OF CIT, FARIDABAD VS. GHANSHYAM (HUF) 315 ITR 1 THE INTEREST ON ENHAN CED COMPENSATION IS PART OF COMPENSATION AND REQUIRED TO BE TAXED IN THE YEAR OF RECEIPT. ACCORDINGLY, AS PER THE FOLLOWING WORKING THE ENHAN CED COMPENSATION AND INTEREST IS TAXABLE FOR A.Y. 2001-02, AS THE ASSESS EE RECEIVED THE SAME IN THE YEAR UNDER CONSIDERATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BALANCE TAXABLE (COMPENSATION) RS.99,575/- INTEREST CALCULATION ON RS.8,36,742/- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . BALANCE TAXABLE RS.10,19,373/- ------------------ TOTAL RS.11,18,948/- ------------------ THE INTEREST IS NOW A PART OF COMPENSATION AND IS TAXABLE IN THE YEAR OF RECEIPT IN VIEW OF THE SUPREME COURT DECISION CITED ABOVE. I HAVE THEREFORE REASON TO BELIEVE THAT THE ENHANCE D COMPENSATION ALONGWITH INTEREST AS WORKED OUT @RS.11,18,948/- AS ABOVE HAS ESCAPED ASSESSMENT FOR A.Y. 2001-02 WITHIN THE MEANING OF SECTION 147 OF THE I. T. ACT, 1961. SINCE THE REASSESSMENT FOR A.Y. 2001-02 IS IN PURSU ANCE OF AN ORDER ON APPEAL BY THE ASSESSEE IN SUPREME COURT, IN ORDER TO TAX THE ABOVE INCOME, PERMISSION FOR ISSUE OF NOTICE U/S.148 R.W.S.150 MAY PLEASE BE GRA NTED. 10 MALEGAON SD/- DATE : 05-01-2011 INCOME-TAX OFFICER, WARD-3(3), MALEGAON FROM THE ABOVE, IT IS CLEAR THAT THE IMMEDIATE REAS ON FOR REOPENING THE COMPLETED ASSESSMENT U/S.147/148 OF THE ACT IS THE JUDGMENT OF HONBLE SUPREME COURT DATED 25-03-2010 WHICH ENHANCED THE COMPENSAT ION ALREADY AWARDED BY THE HIGH COURT, FROM RS.53/- PER SQ. MTR TO RS.66.25 P ER SQ. MTR WHICH INCLUDES INTEREST PORTION AS WELL. FOR TAXING THE SAID ENHANCED COMP ENSATION AND INTEREST IN THE YEAR UNDER CONSIDERATION, THE AO CITED THE JUDGMENT OF S UPREME COURT IN THE CASE OF CIT VS. GHANSHYAM (HUF) 315 ITR 1 WHICH ADVOCATES FOR TAXING THE INTEREST ON ENHANCED COMPENSATION IN THE YEAR OF RECEIPT. 12. CONSIDERING THE ABOVE VIEW OF THE AO ON THE TAX ABILITY OF INTEREST ON COMPENSATION IN THE ASSESSEES OWN CASE FOR THE A.Y . 2001-02, I NEED TO EXAMINE THE RATIO OF THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. GHANSHYAM (HUF) (SUPRA). THE JUDGMENT IN THIS CASE DEALS WITH EXPLAINING THE PROVISIONS OF SECTION 45(5)(B) AND 45(5)(C) AND PRO VISIONS OF SECTION 155(16) WHICH IS BROUGHT INTO STATUTE W.E.F. 01-04-2004. IN PRIN CIPLE, THESE PROVISIONS DO NOT APPLY TO THE YEAR UNDER CONSIDERATION. NEVERTHELESS, THE SE PROVISIONS WERE EXPLAINED BY THE SUPREME COURT IN CONNECTION WITH THE A.Y. 1999- 2000 AND ALSO IN CONNECTION WITH THE ENHANCED COMPENSATION/INTEREST AS RELEVANT FROM THE INCEPTION OF THE SAID PROVISIONS. THE HONBLE SUPREME COURT OBSERVED THA T THE COMPENSATION UNDER THE LAND ACQUISITION ACT, 1894 ARISES AND IS NORMALLY P AYABLE IN MULTIPLE STAGES. THEREFORE, AS AND WHEN ASSESSEE CLAIMANT IS IN RECE IPT OF THE ENHANCED COMPENSATION, IT SHALL BE TREATED AS DEEMED INCOME AND TAXED ON RECEIPT BASIS. HENCE, THE YEAR IN WHICH ENHANCED COMPENSATION IS R ECEIVED IS THE YEAR OF TAXABILITY. HOWEVER, THE ISSUE UNDER DISPUTE RELA TES TO THE ASSESSEES FAILURE IN MATTERS OF DISCLOSURE OF FACTS AND APPLICABILITY OF THE PROVISO TO SECTION 147 OF THE ACT. EVEN BEFORE THE AMENDMENT TO SECTION 45 AND 155(16) OF THE ACT (I.E. PRIOR TO 11 01-04-2004), THE ENHANCED COMPENSATION WAS TAXABLE IN THE YEAR OF RECEIPT ONLY U/S.45(5)(B) OF THE ACT AND THIS APPROACH IS REINF ORCED BY THE AMENDMENT TO CLAUSE (C) OF SECTION 45(5) OF THE ACT. FURTHER, THIS SCH EME OF TAXATION IN THE YEAR OF RECEIPT WAS INSERTED BY WAY OF SECTION 45(5) OF THE ACT RIG HT FROM 1988. THEREFORE, IN PRINCIPLE, THE YEAR OF TAXABILITY ALL THROUGH THE ASSESSMENT YEARS IS ALWAYS ON RECEIPT BASIS. RELEVANT FINDING OF THE APEX COUR T IS EXTRACTED AS UNDER : 35. IT WAS URGED ON BEHALF OF THE ASSESSEE THAT SE CTION 45(5)(B) OF THE 1961 ACT DEALS ONLY WITH REWORKING, ITS OBJECT IS NOT TO CON VERT THE AMOUNT OF ENHANCED COMPENSATION INTO DEEMED INCOME ON RECEIPT. WE FIND NO MERIT IN THIS ARGUMENT. THE SCHEME OF SECTION 45(5) OF THE 1961 ACT WAS INS ERTED WITH EFFECT FROM APRIL 1, 1988, AS AN OVERRIDING PROVISION. AS STATED ABOVE, COMPENSATION UNDER THE L. A. ACT, 1894, ARISES AND IS PAYABLE IN MULTIPLE STAGES WHIC H DOES NOT HAPPEN IN CASES OF TRANSFERS BY SALE, ETC. HENCE, THE LEGISLATURE HAD TO STEP IN AND SAY THAT AS AND WHEN THE ASSESSEE-CLAIMANT IS IN RECEIPT OF ENHANCED COM PENSATION IT SHALL BE TREATED AS ' DEEMED INCOME' AND TAXED ON RECEIPT BASIS. OUR ABO VE UNDERSTANDING IS SUPPORTED BY INSERTION OF CLAUSE (C) IN SECTION 45(5) WITH EF FECT FROM APRIL 1, 2004, AND SECTION 155(16) WHICH REFERS TO A SITUATION OF A SUBSEQUENT REDUCTION BY THE COURT, TRIBUNAL OR OTHER AUTHORITY AND RECOMPUTATION/AMENDMENT OF T HE ASSESSMENT ORDER. SECTION 45(5) READ AS A WHOLE (INCLUDING CLAUSE (C) NOT ONL Y DEALS WITH REWORKING AS URGED ON BEHALF OF THE ASSESSEE BUT ALSO WITH THE CHANGE IN THE FULL VALUE OF THE CONSIDERATION (COMPUTATION) AND SINCE THE ENHANCED COMPENSATION/C ONSIDERATION (INCLUDING INTEREST UNDER SECTION 28 OF THE 1894 ACT) BECOMES PAYABLE/P AID UNDER THE 1894 ACT AT DIFFERENT STAGES, THE RECEIPT OF SUCH ENHANCED COMP ENSATION/CONSIDERATION IS TO BE TAXED IN THE YEAR OF RECEIPT SUBJECT TO ADJUSTMENT, IF ANY, UNDER SECTION 155(16) OF THE 1961 ACT, LATER ON. HENCE, THE YEAR IN WHICH ENHANCED COMPENSATION IS RECEIVED IS THE YEAR OF TAXABILITY. CONSEQUENTLY, EVEN IN CASES WHERE PENDING APPEAL, THE COURT/TRIBUNAL/AUTHORITY BEFORE WHICH A PPEAL IS PENDING, PERMITS THE CLAIMANT TO WITHDRAW AGAINST SECURITY OR OTHERWISE THE ENHANCED COMPENSATION (WHICH IS IN DISPUTE), THE SAME IS LIABLE TO BE TAX ED UNDER SECTION 45(5) OF THE 1961 ACT. THIS IS THE SCHEME OF SECTION 45(5) AND SECTIO N 155(16) OF THE 1961 ACT. WE MAY CLARIFY THAT EVEN BEFORE THE INSERTION OF SECTI ON 45(5)(C) AND SECTION 155(16) WITH EFFECT FROM APRIL 1, 2004, THE RECEIPT OF ENHA NCED COMPENSATION UNDER SECTION 45(5)(B) WAS TAXABLE IN THE YEAR OF RECEIPT WHICH I S ONLY REINFORCED BY INSERTION OF CLAUSE (C) BECAUSE THE RIGHT TO RECEIVE PAYMENT UND ER THE 1894 ACT IS NOT IN DOUBT. IT IS IMPORTANT TO NOTE THAT COMPENSATION, INCLUDING E NHANCED COMPENSATION/CONSIDERATION UNDER THE 1894 ACT IS BA SED ON THE FULL VALUE OF PROPERTY AS ON DATE OF NOTIFICATION UNDER SECTION 4 OF THAT ACT. WHEN THE COURT/TRIBUNAL DIRECTS PAYMENT OF ENHANCED COMPENSATION UNDER SECTION 23(1 A), OR SECTION 23(2) OR UNDER SECTION 28 OF THE 1894 ACT IT IS ON THE BASIS THAT AWARD OF THE COLLECTOR OR THE COURT, UNDER REFERENCE, HAS NOT COMPENSATED THE OWNER FOR THE FULL VALUE OF THE PROPERTY AS ON DATE OF NOTIFICATION. 36. HAVING SETTLED THE CONTROVERSY GOING ON FOR LAS T TWO DECADES, WE ARE OF THE VIEW THAT IN THIS BATCH OF CASES WHICH RELATE BACK TO THE ASSESSMENT YEARS 1991-92 AND 1992-93, POSSIBLY THE PROCEEDINGS UNDER THE LAN D ACQUISITION ACT, 1894, WOULD HAVE ENDED. IN A NUMBER OF CASES WE FIND THAT PROCE EDINGS UNDER THE 1894 ACT HAVE BEEN CONCLUDED AND TAXES HAVE BEEN PAID. THEREFORE, BY THIS JUDGMENT WE HAVE SETTLED THE LAW BUT WE DIRECT THAT SINCE MATTERS ARE DECADE OLD AND SIN CE WE ARE NOT AWARE OF WHAT HAS HAPPENED IN THE LAND A CQUISITION ACT PROCEEDINGS IN PENDING APPEALS, THE RECOMPUTATION O N THE BASIS OF OUR JUDGMENT HEREIN, PARTICULARLY IN THE CONTEXT OF TYPE OF INTEREST UN DER SECTION 28 VIS-A-VIS INTEREST UNDER SECTION 34, ADDITIONAL COM PENSATION UNDER SECTION 23(1A) AND 12 SOLATIUM UNDER SECTION 23(2) OF THE 1894 ACT, WOULD BE EXTREMELY DIFFICULT AFTER ALL THESE YEARS, WILL NOT BE DONE. SUBJECT TO WHAT IS STATED HEREINABOVE, WE ALLOW T HE CIVIL APPEAL OF THE DEPARTMENT WITH NO ORDER AS TO COSTS. 13. FURTHER, I HAVE ALSO CONSIDERED THE WRITTEN SUB MISSIONS FILED BY THE ASSESSEES COUNSEL AND FIND THEY REVOLVE AROUND THE NEED FOR TAXING OF THE SAME IN THE A.Y. 2010-11, WHICH IS THE YEAR OF RECEIPT AND CERTAIN LY NOT A.Y. 2001-02, WHICH IS THE YEAR OF ACQUISITION. APART FROM OTHERS, THE JUDGME NT OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF MUKHTIAR SINGH SANDHU VS. ITO & ANOTHER 160 ITR 0526 IS FOUND RELEVANT FOR THE LEGAL PROPOSITION THAT REOPE NING OF THE COMPLETED ASSESSMENTS BASED ON THE JUDGMENTS DELIVERED SUBSEQUENTLY AFTER COMPLETION OF ASSESSMENTS ARE INVALID AS THE ASSESSEE CANNOT BE HELD GUILTY OF NO T DISCLOSING ALL THE MATERIAL FACTS TRULY AND FULLY NECESSARY FOR MAKING THE ASSESSMENT . THIS IS THE CASE WHERE EARLIER RETURNS WERE ALREADY FILED AND THE JUDGMENT OF COUR T WAS DELIVERED ON 19-11-1981 AND THE AMOUNT WAS ACTUALLY PAID TO ASSESSEE ON 15- 06-1982. THE ASSESSMENT YEARS UNDER REVIEW OF THE HONBLE SUPREME COURT ARE THE O NES PRIOR TO A.YRS. 1975-76 TO 1979-80. RELEVANT LINES FROM PARA 6 OF THE JUDGMEN T ARE EXTRACTED AS FOLLOWS : 6. . . . . . . . . . . . . . . . . SO IT IS PATENT THAT TILL THE AMOUNT OF INTEREST RE FERRED TO ABOVE HAD BECOME DUE TO THE PETITIONER AS PER THE JUDGMENT OF THIS COURT DA TED NOVEMBER 19, 1981, OR WAS ACTUALLY PAID TO HIM ON JUNE 15, 1981, HE COULD NOT POSSIBLY BE HELD GUILTY OF NOT DISCLOSING TRULY AND CORRECTLY THE MATERIAL FACTS F OR THE ASSESSMENT YEARS REFERRED TO ABOVE. THEREFORE, IT IS UNDISPUTED FACT THAT THE ASSESSEE FILED THE RETURN OF INCOME ORIGINALLY ON 17-01-2001 DECLARING TOTAL INCOME OF RS.1,20,140/-. THE SAME WAS PROCESSED ON 09-10-2002. ON FINDING THE ESCAPEMENT OF INCOME QUA THE JUDGMENT OF HIGH COURT RELATING TO ENHANCED COMPENSATION/INT EREST, A NOTICE U/S.148 OF THE ACT WAS ISSUED ON 22-03-2005 AND THE INCOME WAS REASSES SED DETERMINING THE TOTAL INCOME AT RS.28,44,104/-. PRIMARILY, THIS REASSESS MENT WAS MADE FOR TAXING THE ENHANCED COMPENSATION AND GIVING EFFECT TO THE JUDG MENT OF HIGH COURT WHICH FIXED 13 THE ENHANCED COMPENSATION AT RS.53/- PER SQ. MTR. THE CURRENT PROCEEDINGS U/S.147 OF THE ACT FOR SECOND TIME REVOLVES AROUND THE REOP ENING OF THE SAID COMPLETED ASSESSMENT U/S.147/148 OF THE ACT IN ORDER TO TAX T HE ENHANCED COMPENSATION FROM RS.53/- PER SQ. MTR TO RS.66.25 PER SQ. MTR AS PER THE HONBLE SUPREME COURT JUDGMENT DATED 25-03-2010 IN THE ASSESSEES OWN CAS E. THEREFORE, AS PER THE PROVISIONS OF PROVISO TO SECT ION 148 OF THE ACT, THE AO CAN ASSUME JURISDICTION ONLY WHEN THERE IS FAILURE ON PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT FOR THAT ASSESSMENT YEAR. THEREFORE, TO ADJUDICATE THE ADDITIONAL GROUND RAI SED BEFORE ME, IN OUR VIEW, WHAT IS TO BE SEEN IS IF THERE EXISTS THE FAILURE O F THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS RELATING TO THE ENHANCED C OMPENSATION/INTEREST. THERE IS NO DISPUTE ON THE DATE OF THE JUDGMENT OF HONBLE SUPR EME COURT DATED 25-03-2010 AND THE RELEVANT A.Y. 2001-02 IS NOT THE YEAR OF RE CEIPT OF THE COMPENSATION. CONSIDERING THE ABOVE CITED RATIOS LAID DOWN BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. GHANSHYAM (HUF) (SUPRA ) WHICH IS CATEGORICAL IN STATING THE YEAR OF TAXATION IN THIS KIND OF SITUATION IS THE YEAR OF RECEIPT, A.Y. 2010-11 CONSTITUTES THE YEAR OF RECEIPT IN THIS CASE. COMING TO THE VALIDITY OF REOPENING PROCEEDINGS, WE FIND THE JUDGMENT OF PUNJAB & HARYA NA HIGH COURT IN THE CASE OF MUKHTIAR SINGH SANDHU VS. ITO & ANOTHER (SUPRA) DID NOT APPROVE SUCH REOPENING ON THE FACT THE DATE OF FILING OF RETURN PRIOR TO T HE SAID JUDGMENT OF HIGH COURT, THEREFORE, THE FAILURE CANNOT BE ATTRIBUTED TO THE ASSESSEE IN THE MATTERS PERTAINING TO THE DISCLOSURE OF FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR MAKING THE ASSESSMENT. FURTHER, THE JUDGMENT OF DELHI HIGH COURT IN THE C ASE OF CENTRAL INDIA ELECTRIC SUPPLY CO. LTD. VS. ITO 333 ITR 237 IS RELEVANT FOR THE SAME LEGAL PROPOSITION. THIS IS THE CASE WHERE SOME OF THE UNITS ENGAGED IN GENE RATION AND SUPPLY OF ELECTRICITY WERE ACQUIRED BY THE STATE GOVERNMENT IN 1964 GRANT ING COMPENSATION AND THE 14 SAME WAS OFFERED TO TAX FOR THE A.Y. 1965-1966. SU BSEQUENTLY, THE HIGHER COMPENSATION WAS RECEIVED BY VIRTUE OF HONBLE SUPR EME COURT JUDGMENT DATED 24- 07-1985. ON THESE FACTS, THE DELHI HIGH COURT HELD THAT THERE IS NO LACK OF DISCLOSURE BY THE ASSESSEE IN AS MUCH THE ISSUE OF ENHANCED CO MPENSATION WAS SETTLED ONLY WHEN THE SUPREME COURT PRONOUNCED THE JUDGMENT AND ON RECEIPT OF THE ENHANCED COMPENSATION ASSESSEE HAD DISCLOSED THE SAME IN THE RETURN. IN THIS CASE, THE REOPENING OF THE ASSESSMENT FOR A.Y. 1965-66, LIKE IN THE PRESENT CASE, WAS HELD INVALID AND WITHOUT JURISDICTION. 14. CONSIDERING ALL THESE SETTLED LEGAL PROPOSITION S, I AM OF THE VIEW THAT THE ASSESSEE CANNOT BE HELD GUILTY OF FAILURE TO DISCLO SE FULLY AND TRULY ALL THE RELEVANT FACTS RELEVANT TO THE ENHANCED COMPENSATION OR INTE REST ON COMPENSATION IN THE RETURN. THEREFORE, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE HAS TO BE ALLOWED IN FAVOUR OF THE ASSESSEE. THEREFORE, THE ADDITIONAL GROUND RAISED BY THE ASSESSEE IS ALLOWED. 15. REGARDING THE OTHER GROUNDS ON MERITS, CONSIDER ING MY DECISION ON ADDITIONAL GROUND, IN MY VIEW, THE ADJUDICATION OF OTHER GROUN DS RAISED BY THE ASSESSEE ON MERITS BECOMES AN ACADEMIC EXERCISE. THEREFORE, TH E SAME ARE DISMISSED AS ACADEMIC. ACCORDINGLY, THE GROUNDS RAISED BY THE A SSESSEE ARE PARTLY ALLOWED. 16. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO.1892/PUN/2014 SHRI KAMLESH KALYANCHAND LAL WANI (HUF) (A.Y. 2001-02) ITA NO.1893/PUN/2014 SHRI MANGLESH KALYANCHAND LA LWANI (HUF) (A.Y. 2001-02) 17. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUB MITTED THAT THE ISSUES RAISED BY THE ASSESSEES IN THESE 2 APPEALS ARE ALSO IDENTICAL ON MERITS AS WELL AS ON LAW. FURTHER, HE SUBMITTED THAT THE ADDITIONAL GROUND RA ISED BY THE ASSESSEES ARE ALSO IDENTICAL AND IT REVOLVES AROUND THE JURISDICTION I SSUES OF THE AO IN REOPENING OF THE 15 ASSESSMENTS AND APPLICABILITY OF THE PROVISIONS OF PROVISO TO SECTION 147 OF THE ACT. HE ALSO SUBMITTED THAT THE ARGUMENTS AND SUBMISSION S MADE IN CONNECTION WITH THE APPEAL IN ITA NO.1891/PUN/2014 IN THE CASE OF SHRI KALYANCHAND MANAKCHAND LALWANI (HUF) ARE COMMON AND APPLICABLE TO THESE 2 APPEALS TOO. 18. CONSIDERING THE ABOVE SUBMISSIONS, I AM OF THE OPINION THAT THE ADDITIONAL GROUND RAISED BY THESE 2 ASSESSEES HAS TO BE ADMITT ED AND ALLOWED IN THEIR FAVOUR. FURTHER, THE OTHER GROUNDS RAISED BY THE ASSESSEES ON MERITS HAVE TO BE DISMISSED AS ACADEMIC. ACCORDINGLY, THE GROUNDS RAISED BY THE A SSESSEES ON MERITS ARE DISMISSED AS ACADEMIC. 19. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEES ARE PARTLY ALLOWED. 20. TO SUM UP, ALL THE APPEALS OF THE RESPECTIVE AS SESSEES ARE PARTLY ALLOWED. ORDER PRONOUNCED ON THIS 23 RD DAY OF FEBRUARY, 2018. SD/- (D.KARUNAKARA RAO) / ACCOUNTANT MEMBER / PUNE; DATED : 23 RD FEBRUARY, 2018. SATISH / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. ( ) / THE CIT(A) - I, NASHIK 4. / THE CIT - I, NASHIK 5. , , SMC / DR SMC, ITAT, PUNE; 6. / GUARD FILE. / BY ORDER, //TRUE COPY// //TRUE COPY// SENIOR PRI VATE SECRETARY , / ITAT, PUNE