Dr.M.N.Rajagopal, Salem V. ITO, Salem

ITA 2721/CHNY/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90418 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 28-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 03-11-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S DASGUPTA
• Assessee Lawyers: G BASKAR
• Keywords: Capital receipt
• Section: 28

Judgement Text

, , IN THE INCOME-TAX APPELLATE TRIBUNAL B BENCH, CHE NNAI , . !' !' !' !' , # # # # $% $% $% $% BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER & SHRI V. DURGA RAO, JUDICIAL MEMBER ./ I.T.A.NO.2721/MDS/2014 # ' &' / ASSESSMENT YEAR :2006-07 DR. M.N. RAJAGOPAL, 6, KANAGA RAJAGANAPATHY STREET, SALEM 636 001 [PAN: AAUPR5365B] VS. THE INCOME TAX OFFICER, WARD I(1), 3, GANDHI ROAD, SALEM 636 007. ( '( '( '( '( /APPELLANT ) ( )*'( )*'( )*'( )*'( / RESPONDENT ) '( + , / APPELLANT BY : SHRI G. BASKAR, ADVOCATE )*'( + , / RESPONDENT BY : SHRI S. DASGUPTA, JCIT + - / DATE OF HEARING : 28.04.2015 ./& + - /DATE OF PRONOUNCEMENT : 29.05.2015 0 0 0 0 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), SALEM, DA TED 30.09.2014 RELEVANT TO THE ASSESSMENT YEAR 2006-07. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S A MEDICAL DOCTOR BY PROFESSION AND MET WITH AN ACCIDENT AND HAD INJURY WHICH NEEDED TREATMENT FOR RECOVERY. THE ASSESSEE HAS CLAIMED COMPENSATION FROM INSURANCE COMPANY AND ACCORDINGLY, THE ASSESSEE HAS RECEIVED COMPENSATION OF I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .272 272272 2721 11 1/M/ /M/ /M/ /M/14 1414 14 2 .3,53,435/- AND INTEREST OF .3,73,757/-. IN THE ASSESSMENT ORDER, THE ASSESSING OFFICER HAS TREATED THE ENTIRE INTEREST R ECEIVED BY THE ASSESSEE AS TAXABLE INCOME. THE CLAIM OF THE ASSESSEE BEFORE TH E ASSESSING OFFICER IS THAT THE INTEREST RECEIVED BY THE ASSESSEE IS FROM THE DATE OF APPLICATION TO THE DATE OF AWARD I.E., 17.01.1994 TO 14.09.2005 HA S TO BE TREATED AS CAPITAL RECEIPT FROM THE DATE OF AWARD FOR THE PERIOD OF DE LAY MAY BE CONSIDERED FOR TAXATION. HOWEVER, THE ASSESSING OFFICER HAS REJECT ED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION IN THE CASE OF C IT V. GHANSHYAM (HUF) 315 ITR 1 (SC). 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFOR E THE LD. CIT(A). THE LD. CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFF ICER BY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F BIKRAM SINGH V. LAND ACQUISITION COLLECTOR 224 ITR 551. 4. ON BEING AGGRIEVED, THE ASSESSEE IS IN APPEAL B EFORE THE TRIBUNAL. 5. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE AMOUNT RECEIVED BY THE ASSESSEE FROM THE DATE OF APPLICATI ON TO THE DATE OF AWARD IS NOT A CAPITAL RECEIPT AND IT IS PART AND PARCEL OF THE COMPENSATION. HE RELIED ON THE DECISION OF THE HONBLE HIMACHAL PRADESH HIG H COURT IN THE CASE OF COURT ON ITS OWN MOTION V. H.P. STATE CO-OPERATIVE BANK LTD. & ORS. [2015] 276 CTR (HP) 264. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .272 272272 2721 11 1/M/ /M/ /M/ /M/14 1414 14 3 6. ON THE OTHER HAND, THE LD. DR STRONGLY RELIED O N THE ORDERS OF AUTHORITIES BELOW. 7. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ASSESS EE IS A MEDICAL DOCTOR, RECEIVED COMPENSATION BY AWARD DATED 01.10.2004 OF .3,53,435/- AND ALSO INTEREST FOR THE PERIOD FROM 17.01.1994 TO 14.09.20 05 OF .3,73,757/-. ACCORDING TO THE ASSESSEE, FROM THE DATE OF APPLICA TION TO THE DATE OF AWARD, THE AMOUNT RECEIVED IS NOT CAPITAL IN NATURE AND IT CANNOT BE TAXED AND ONLY FOR THE PERIOD OF DELAY FROM THE DATE OF AWARD TO T HE DATE OF PAYMENT, IT HAS TO BE TAXED. THE LD. COUNSEL FOR THE ASSESSEE HAS N OT ABLE TO SPECIFY THE FACT THAT HOW THE AMOUNT RECEIVED BY THE ASSESSEE FROM T HE DATE OF CLAIM TO THE DATE OF AWARD IS A CAPITAL RECEIPT. IN FACT THE HON BLE SUPREME COURT IN THE CASE OF BIKRAM SINGH V. LAND ACQUISITION COLLECTOR (SUPRA) HAS HELD THAT THE INTEREST IS DIFFERENT AND COMPENSATION IS DIFFERENT AND THE INTEREST RECEIVED BY THE ASSESSEE IS A REVENUE RECEIPT EXIGIBLE TO TA X. 8. SO FAR AS THE JUDGEMENT OF THE HONBLE HIMACHAL PRADESH IN THE CASE OF COURT ON ITS OWN MOTION V. H.P. STATE CO-OPERATI VE BANK LTD. & ORS. (SUPRA) IS CONCERNED, THE HONBLE HIGH COURT HAS OB SERVED THAT THE INTEREST IS DIFFERENT FROM COMPENSATION. HOWEVER, INTEREST P AID UNDER SECTION 28 OF THE 1894 ACT DEPENDS UPON A CLAIM BY THE PERSON WHO SE LAND IS ACQUIRED WHEREAS INTEREST UNDER SECTION 34 IS FOR DELAY IN M AKING PAYMENT. THIS VITAL I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .272 272272 2721 11 1/M/ /M/ /M/ /M/14 1414 14 4 DIFFERENCE NEEDS TO BE KEPT IN MIND IN DECIDING THI S MATTER. INTEREST UNDER SECTION 28 IS PART OF THE AMOUNT OF COMPENSATION WH EREAS INTEREST UNDER SECTION 34 IS ONLY FOR DELAY IN MAKING PAYMENT AFTE R THE COMPENSATION AMOUNT IS DETERMINED. INTEREST UNDER SECTION 28 IS A PART OF ENHANCED VALUE OF THE LAND WHICH IS NOT THE CASE IN THE MATTER OF PAYMENT OF INTEREST UNDER SECTION 34. FROM THE ABOVE JUDGEMENT OF THE HONBL E HIMACHAL PRADESH HIGH COURT, IT IS NOT CLEAR AS TO HOW TO TREAT THE AWARD RECEIVED BY THE ASSESSEE, WHETHER IT IS A CAPITAL RECEIPT OR REVENU E RECEIPT. HOWEVER, THE HONBLE SUPREME COURT IN THE CASE OF BIKRAM SINGH V . LAND ACQUISITION COLLECTOR (SUPRA) HAS ALREADY CONSIDERED THAT THE I NTEREST RECEIPT AS REVENUE RECEIPT. 9. IN THE PRESENT CASE, THE ASSESSEE HAS NOT ABLE TO ESTABLISH THE FACT THAT THE INTEREST RECEIVED BY THE ASSESSEE FROM THE DATE OF CLAIM TO THE DATE OF AWARD IS A PART AND PARCEL OF THE COMPENSATION. THEREFORE, KEEPING IN VIEW OF THE ABOVE DECISION OF THE HONBLE SUPREME C OURT IN THE CASE OF BIKRAM SINGH V. LAND ACQUISITION COLLECTOR (SUPRA), WE ARE INCLINED TO ACCEPT THE SUBMISSIONS OF THE LD. COUNSEL FOR THE ASSESSEE AND HELD THAT THE INTEREST RECEIVED BY THE ASSESSEE FROM THE DATE OF CLAIM TO THE DATE OF AWARD IS DIFFERENT FROM THE COMPENSATION RECEIVED. THEREF ORE, THE INTEREST RECEIVED BY THE ASSESSEE FROM THE DATE OF CLAIM TO THE DATE OF PAYMENT HAS TO BE TAXED. ACCORDINGLY, WE DISMISS THE APPEAL FILED BY THE ASSESSEE. I.T.A. I.T.A. I.T.A. I.T.A. NO NONO NO. .. .272 272272 2721 11 1/M/ /M/ /M/ /M/14 1414 14 5 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 29 TH OF MAY, 2015 AT CHENNAI. SD/- SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER CHENNAI, DATED, THE 29.05.2015 VM/- 0 + )#-12 32&- /COPY TO: 1. '( / APPELLANT, 2. )*'( / RESPONDENT, 3. 4 ( ) /CIT(A), 4. 4 /CIT, 5. 25! )#-# /DR & 6. !6' 7 /GF.