ITO, CHENNAI V. Shri T.T.Marthandan, CHENNAI

ITA 2549/CHNY/1996

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58072 (ITAT-CHENNAI)
• Duration Of Justice: 15 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2012
• Appeal Filed By: Department
• Bench Allotted: C
• Assessment Year: 1986-1987
• Appeal Filed On: 02-12-1996
• Court: TRIBUNAL
• Department Lawyers: YOGESH KAMATJCIT
• Assessee Lawyers: S SRIDHAR
• Keywords: Question of law
• Section: 45(5); 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BENCH C CHENN AI BEFORE SHRI ABARAHAM P.GEORGE ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER .. ITA NO.2549/MDS./96 ASSESSMEN T YEAR:1986-87 ITA NO.2550/MDS./96 ASSESSMEN T YEAR:1988-89 ITA NO.2551/MDS./96 ASSESSMEN T YEAR:1989-90 ITA NO.2552/MDS./96 ASSESSMEN T YEAR:1990-91 ITA NO.2553/MDS./96 ASSESSMEN T YEAR:1991-92 ITA NO.2554/MDS./96 ASSESSMEN T YEAR:1992-93 ITA NO.2314/MDS./97 ASSESSMEN T YEAR:1987-88 THE ITO,WARD-IV(6), CHENNAI. VS. MR.T.MARTHANDAM, 132,AVADHANAM PAPPIER ROAD, CHOOLAI, CHENNAI 600012. G.I.NO.7386 N (APPELLANT) (RESPONDENT) DEPARTMENT BY : SHRI YOGESH KAMAT,JCIT DR ASSESSEE BY : SHRI S.SRIDHAR, ADVOCATE DATE OF HEARING : 21.03.12 DATE OF PRONOUNCEMENT : 21. 03.12 O R D E R PER ABARAHAM P GEORGE, ACCOUNTANT MEMBER : THESE ARE ALL MATTERS REMITTED BY THE HONBLE JURISDICTIONAL HIGH COURT FOR CONSIDERATION OF THIS TRIBUNAL ITA. 2549 TO 2554 /MDS/96 ITA. 2314 /MDS/97 I 2 AFRESH. ALL THESE APPEALS WERE OF THE REVENUE FOR THE IMPUGNED ASSESSMENT YEARS. THE APPEALS WERE DISPOS ED OF BY THIS TRIBUNAL VIDE ORDER DATED 20.12.2002,INITIA LLY. THE REVENUE MOVED FURTHER APPEAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT AND THEIR LORDSHIP VIDE J UDGEMENT DATED 15.03.2011 IN NUMBERED AS TC (A). NOS. 1 TO 7 OF 2005 HELD AS UNDER AT PARA 20: 20. IN THE CIRCUMSTANCES, THE APPEAL AS REGARDS L EVY OF PENALTY IS ANSWERED AGAINST THE REVENUE. THE APPE AL ON THE ASPECT OF ASSESSABILITY OF THE ENHANCED COMPENSATION UNDER SECTION 45(5) OF THE ACT IS ANSWERED IN FAVOUR OF THE REVENUE, WHICH SHALL BE ASSESSED IN THE YEAR OF RECEIPT. TO THE ABOVE STAT ED EXTENT, THE ORDER OF THE TRIBUNAL IS SET ASIDE. HO WEVER, IN ORDER TO ASCERTAIN THE INTEREST PORTION ALONE, T HE MATTER IS REMANDED BACK TO THE TRIBUNAL TO WORK OUT ASSESSABILITY OF THE INTEREST DEPENDING ON THE FACT AS TO THE INTEREST GRANTED UNDER SECTION 28 TO 34 OF THE LAND ACQUISITION ACT, AS THE CASE MAY BE. IT IS VERY CLEAR FROM THE ABOVE DIRECTION OF THE HO NBLE JURISDICTIONAL HIGH COURT THAT THE ISSUE REMITTED B ACK TO THIS ITA. 2549 TO 2554 /MDS/96 ITA. 2314 /MDS/97 I 3 TRIBUNAL IS FOR WORKING OUT THE INTEREST RECEIVED B Y THE ASSESSEE BY BIFURCATING SUCH INTEREST BETWEEN INTER EST UNDER SECTION 28 AND INTEREST UNDER SECTION 34 OF THE LAN D ACQUISITION ACT. 2. THE APPEALS OF THE REVENUE WERE RELATED TO COMPENSATION AND ADDITIONAL COMPENSATION ALONG WITH SOLATIUM AND THE INTEREST THEREON RECEIVED BY THE A SSESSEE ON A COMPULSORY ACQUISITION OF LAND. HONBLE JURISDIC TIONAL HIGH COURT ON THE QUESTION OF LAW RAISED BEFORE IT ANSWE RED AS UNDER AT PARA 16 TO 18 OF THE JUDGEMENT REFERRED S UPRA:- 16. IN THE BACKGROUND OF THE ABOVE SAID DECISION, THE QUESTION HEREIN RAISED BY THE REVENUE HAS TO BE ANSWERED HOLDING THAT THE YEAR OF RECEIPT OF ADDITI ONAL COMPENSATION WILL BE THE YEAR OF ASSESSMENT AND THA T THE ADDITIONAL COMPENSATION WOULD INCLUDE ENHANCED COMPENSATION WHICH ARE GRANTED UNDER SECTION 23(1A) AND SOLATIUM UNDER SECTION 23(2) OF 1894 ACT AND TH E INTEREST MADE UNDER SECTION 28 ON THE ADDITIONAL COMPENSATION AS WELL AS ADDITIONAL SOLATIUM GRANTED . HOWEVER, INTEREST PAYABLE UNDER SECTION34 SHALL NOT FORM PART OF THE ADDITIONAL COMPENSATION FOR THE ITA. 2549 TO 2554 /MDS/96 ITA. 2314 /MDS/97 I 4 PURPOSE OF ASSESSMENT UNDER SECTION 45(5) OF THE 1961 ACT. 17. THUS ON THE INTEREST RECEIVED BY THE ASSESSEE, THE ORDERS OF THE ASSESSMENT AS WELL AS THAT OF THE APPELLATE FORUMS DO NOT REVEAL AS TO WHETHER THE INTEREST. CONSIDERED THEREIN WAS GRANTED UNDER SECTION 28 OF THE LAND ACQUISITION ACT OR UNDER SECTION 34 OF THE LAND ACQUISITION ACT. AS ALREADY POINTED OUT, GOING BY THE DECISION OF THE APEX COUR T, THE INTEREST AWARDED UNDER SECTION 28 FORM PART OF THE ENHANCED COMPENSATION TO BE TAXED IN THE YEAR OF RECEIPT AND THE INTEREST AWARDED UNDER SECTION 34 DOES NOT FORM PART OF ADDITIONAL COMPENSATION FOR T HE PURPOSE OF ASSESSMENT UNDER SECTION 45(5) OF THE AC T. 18. HAVING REGARD TO THE ABOVE SAID FACTS, WE UPHO LD THE ORDER OF THE TRIBUNAL AS REGARDS THE QUESTION O F ASSESSABILITY OF THE ADDITIONAL COMPENSATION IS CONCERNED. ON THE ASPECT OF INTEREST, WE ARE CONSTRAINED TO HOLD THAT IN THE ABSENCE OF ANY MATE RIAL TO POINT OUT AS TO WHETHER THE INTEREST AWARDED IS UNDER SECTION 28 OR UNDER SECTION 34, THE PROPER COURSE HEREIN WOULD BE TO REMAND THE ASPECT OF THE INTERES T TO ITA. 2549 TO 2554 /MDS/96 ITA. 2314 /MDS/97 I 5 THE TRIBUNAL TO CALL FOR THE DETAILS AS TO WHETHER THE INTEREST PAID TO THE ASSESSEE WAS ONE FALLING UNDER SECTION 28 OR UNDER SECTION 34 OF THE ACT. IF THE INTEREST FALL UNDER BOTH THE SECTIONS, NECESSARY DIRECTIONS MAY BE ISSUED BY THE TRIBUNAL TO SEGREGA TE THE SAME FOR THE PURPOSE OF APPLYING THE DECISION O F THE APEX COURT CITED SUPRA FOR ASSESSING INTEREST U NDER SECTION 45(5) OF THE ACT. 3. WHAT WE HAVE TO DECIDE NOW BASED ON THE ABOV E DIRECTION OF THEIR LORDSHIP IS THE QUANTUM OF INTER EST FALLING WITHIN THE AMBIT OF SECTION 28 AND WITHIN THE AMBIT OF SECTION 34 OF THE LAND ACQUISITION ACT, FOR APPROPRIATE TRE ATMENT OF SUCH INCOME IN THE ASSESSMENTS. 4. COUNSEL FOR BOTH THE PARTIES WERE HEARD. IN OR DER TO ABIDE BY THE DIRECTIONS OF THE HONBLE JURISDICTION AL HIGH COURT, WE HAVE CAREFULLY GONE THROUGH ASSESSMENT ORDERS AN D THE ORDERS OF APPELLATE AUTHORITIES FOR ALL THE ASSESSM ENT YEARS INVOLVED. WE FIND THAT THE ASSESSMENT ORDERS GIVE DETAILS OF THE INTEREST RECEIVED BY THE ASSESSEE, ALONG WITH ITS INCOME FROM HOUSE PROPERTY, IN AN ANNEXURE AND THESE DETAI LS APPEAR TO BE AS UNDER:- ANNEXURE-II 93-94 92-93 91-92 90-91 89-90 88-89 87-88 86-87 HOUSE PROPERTY INCOME 29,550 29,550 29,550 29,550 29,550 29,550 29,550 29,550 ON COMPENSATION INTEREST INCOMELAOP33/86 127343 440243 9% INTEREST FROM 13.12.85 TO 17.12.86 ON 59,92,531 FOR 3 MONTHS 155130.43 14 DAYS & FROM 1.4.86 TO 17.12.86 FOR 8 MONTHS 17 DAYS 884201.57 15% INT. ON 1,51,29,796 FROM 17,09,875 22,69,469 22,69,469 646643 13.12.86 TO 31.12.89 2 YEARS 275 DYS 1 YR 1 YR 1 84 DYS 379 DAYS LACP 209/87 41,497.-- 20004.98 9% INT. ON 683364.50 FROM 8 MTHS 3 DYS 3 MT HS 23 DYS 4.12.86 TO 31.12.87 1 YEAR 15% INT. ON 17,12,565.75 1,93,147.17 2,57,034.8 6 83,605.42 FROM 4.12.87 TO 31.12.89 9 MTHS 1 YEAR 3 MT HS 28 DYS 2 YRS. 28 DAYS 15% INT. ON 11,23,676 FROM 1.1.99 TO 30.9.92 83,621.50 1,68,551.40 1,68,551.40 42,137.85 2 YRS 3 MTHS 28 DAYS 5 MONTHS 1 Y EAR 1 YEAR 3 MTHS ADDL.COMPENSATION 29 DAYS 1,54,335 1,45,9-,414 16,5-, 062 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - 7 NOTHING IS AVAILABLE FROM THE ASSESSMENT ORDER OR O THER RECORDS IN THE FILE AS TO THE NATURE OF INTEREST RE CEIVED BY THE ASSESSEE WHETHER SUCH INTEREST WAS ONE U/S.28 OF TH E LAND ACQUISITION ACT OR U/S.34 OF THE LAND ACQUISITION A CT. SINCE THE APPELLATE RECORDS AND THE PAPERS FILED BEFORE THIS TRIBUNAL DO NOT SHOW THE BIFURCATION OF INTEREST, WE ARE OF THE OPINION THAT SEGREGATION OF INTEREST HAS TO BE PROPERLY MADE AT THE END OF THE ASSESSING OFFICER. IN OUR OPINION, THE MATTER REQUIRES A FRESH LOOK BY THE ASSESSING OFFICER FOR PROPER BIFU RCATION OF INTEREST AFTER OBTAINING DETAILS FROM THE ASSESSEE, IF FOUND NECESSARY. WE THEREFORE, SET ASIDE THE ORDERS OF T HE AUTHORITIES BELOW INSOFAR AS THE TREATMENT OF INTER EST RECEIVED BY THE ASSESSEE ON COMPENSATION IS CONCERNED FOR PR OPER BIFURCATION AND ASSESSMENT IN ACCORDANCE WITH LAW L AID DOWN BY HONBLE APEX COURT IN THE CASE OF COMMISSIONER O F INCOME TAX VS. GHANSHYAM (HUF) IN [2009] 315 ITR 1 (SC) AND THAT OF HONBLE JURISDICTIONAL HIGH COURT IN TC (A). NOS . 1 TO 7 OF 2005 DATED 15.03.11 MENTIONED (SUPRA), THE ASSESSIN G OFFICER SHALL PROCEED IN ACCORDANCE WITH LAW. ITA. 2549 TO 2554 /MDS/96 ITA. 2314 /MDS/97 I 8 4. IN THE RESULT, APPEALS OF THE REVENUE INSOFAR AS THE ISSUE RELATING TO INTEREST ON COMPENSATION IS CONCE RNED IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 21 ST MARCH, 2012. SD/- SD/- ( VIKAS AWASTHY ) (ABRAHAM P. GEORGE ) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 21 ST MARCH, 2012. K S SUNDARAM COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE ITA. 2549 TO 2554 /MDS/96 ITA. 2314 /MDS/97 I 9 NOTHING IS AVAILABLE FROM THE ASSESSMENT ORDERS AS TO THE NATURE OF INTEREST RECEIVED BY THE ASSESSEE WHETHER SUCH INTEREST IS ONE U/S.28 OF THE LAND ACQUISITION ACT OR U/S.34 OF THE LAND ACQUISITION ACT. SINCE THE APPELLATE RECO RDS AND THE PAPERS FILED BEFORE THIS TRIBUNAL DO NOT SHOW THE B IFURCATION OF INTEREST, WE ARE OF THE OPINION THAT SEGREGATION OF INTEREST HAS TO BE PROPERLY MADE AT THE END OF THE ASSESSING OFF ICER. IN OUR OPINION, THEREFORE, THE MATTER REQUIRES THE FRESH L OOK BY THE ASSESSING OFFICER FOR PROPER BIFURCATION OF INTERES T AFTER OBTAINING NECESSARY DETAILS FROM THE ASSESSEE. WE THEREFORE, SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW INSOF AR AS THE TERMS OF INTEREST RECEIVED BY THE ASSESSEE ON COMPE NSATION IS CONCERNED FOR PROPER BIFURCATION AND ASSESSMENT IN ACCORDANCE WITH LAW LAID DOWN BY HONBLE APEX COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GHANSHYAM ( HUF) IN [2009] 315 ITR 1 (SC) AND THE DIRECTIONS OF HON BLE JURISDICTIONAL HIGH COURT IN TC (A). NOS. 1 TO 7 OF 2005 DATED 15.03.11, THE ASSESSING OFFICER SHALL PROCEED IN AC CORDANCE WITH LAW.