The ACIT, Circle-1(1), Visakhapatnam V. Smt Rani Kamala Devi, Visakhapatnam

ITA 290/VIZ/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7008 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-03-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2005-2006
• Appeal Filed On: 28-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S S GOPINATH
• Assessee Lawyers: C V S MURTHY
• Section: 148

Judgement Text

PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.290/VIZAG/2009 ASSESSMENT YEAR: 2005-06 ACIT, CIRCLE-1 (1), VISAKHAPATNAM VS. RANI KAMALA DEVI, VISAKHAPATNAM (APPELLANT) (RESPONDENT) PAN NO: AEQPK 8349 L APPELLANT BY: SHRI G.S.S. GOPINATH, (DR) RESPONDENT BY: SHRI C.V.S. MURTHY, CA ORDER PER SHRI B R BASKARAN, ACCOUNTANT MEMBER : THE APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 12-03- 2009 PASSED BY THE LD CIT (A) VISAKHAPATNAM AND IT RELATES TO THE ASSESSMENT YEAR 2005-06. 2. THE ONLY ISSUE URGED IN THE APPEAL IS WHETHER TH E LD CIT (A) IS JUSTIFIED IN HOLDING THAT THE AO IS NOT CORRECT IN ASSESSING THE INTEREST INCOME OF RS.27.95 LAKH FOR THE ASSESSMENT YEAR 200 5-06. 3. THE FACTS RELATING TO THE ISSUES ARE STATED IN B RIEF. THE ASSESSEE FILED HER RETURN OF INCOME ADMITTING AN INCOME OF RS.7.11 LAKHS. SUBSEQUENTLY IT CAME TO THE NOTICE OF THE ASSESSING OFFICER THAT TH E ASSESSEE HAS RECEIVED INTEREST ON ADDITIONAL COMPENSATION DURING THE YEAR UNDER CONSIDERATION, BY VIRTUE OF THE ORDER OF THE HONBLE HIGH COURT OF ANDHRA PRADESH AND THE SAME WAS NOT OFFERED TO TAX. ACCORDINGLY, THE ASSE SSMENT WAS REOPENED BY ISSUING A NOTICE U/S 148 OF THE ACT. THE INTEREST O N COMPENSATION AMOUNT PAGE 2 OF 3 RECEIVED BY THE ASSESSEE RELATED TO THE PERIOD FROM 12-11-1969 TO 12-4- 1985. THE ASSESSEE RELIED ON THE DECISION OF THE H ONBLE SUPREME COURT IN THE CASE OF SMT. RAMABAI VS. CIT REPORTED IN 181 IT R 400 TO CONTEND THAT THE SAID INTEREST INCOME HAS TO BE ASSESSEE ON ACCR UAL BASIS AND NOT ON RECEIPT BASIS. THE AO DID NOT AGREE WITH THE CONTE NTION OF THE ASSESSEE AND ACCORDINGLY ADDED INTEREST AMOUNT OF RS.27.95 L AKHS TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE SUCCEEDED IN H ER APPEAL FILED BEFORE THE LD CIT (A). HENCE THE REVENUE IS IN APPEAL BEF ORE US. 4. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE RECORD. THE AO DID NOT ACCEPT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF SMT. RAMABAI VS. CIT CITED SUPRA ON THE GROUND THAT THE FACTS OF BOTH THE CASES ARE DISTINGUISHABLE. HOWEVER, WE NOTICE THAT THE LD CIT (A) HAS COMPARED THE FACTS OF BOTH THE CASES AND HAS GIVEN A FINDING THAT THE FACTS IN BOTH THE CASES ARE EXACTLY SIMILAR. THE SAID F INDING OF LD CIT(A) HAS NOT BEEN CHALLENGED BEFORE US. 5. THE LD CIT(A) HAS EXTRACTED THE FOLLOWING OB SERVATIONS OF HONBLE SUPREME COURT IN THE CASE OF SMT. RAMABAI, CITED SU PRA. THE INTEREST CANNOT BE TAKEN TO HAVE ACCRUED ON T HE DATE OF THE ORDER OF THE COURT GRANTING ENHANCED COMPENSATION, IT HAS TO BE TAKEN AS HAVING ACCRUED YEAR AFTER YEAR FROM THE DATE OF DEL IVERY OF POSSESSION OF LAND TILL THE DATE OF SUCH ORDER. LD CIT(A) HAS ALSO EXTRACTED THE FOLLOWING OBSERVAT IONS OF HONBLE PUNJAB & HARYANA HIGH COURT REPORTED IN 221 CTR 576. INTEREST ON ENHANCED COMPENSATION FOR COMPULSORY A CQUISITION OF LAND DOES NOT ACCRUE TILL THE ISSUE OF ENHANCED COMPENSATION IS FINALLY DECIDED AND THEREAFTER ON ATTAINING THE FINALITY OF DETERMINATION OF ENHANCED COMPENSATION BY THE COURT , INTEREST ACCRUES TO THE ASSESSEE AND HAS TO BE SPREAD OVER O N ANNUAL BASIS RIGHT FROM THE DATE OF DELIVERY OF POSSESSION TILL THE DATE OF ORDER OF THE COURT ON TIME BASIS. PAGE 3 OF 3 6. THE LD CIT(A) HAS ALSO OBSERVED THAT THE POS ITION OF LAW THAT THE DECISIONS RENDERED BY HONBLE SUPREME COURT BECOME LAW OF LAND. SINCE THE LD CIT (A) HAS FOLLOWED THE DECISION OF HONBLE SUPREME COURT IN DECIDING THE ISSUE, WE FIND NO REASON TO INTERFERE WITH HIS DECISION ON THIS ISSUE. 7. IN THE RESULT THE APPEAL FILED BY THE REVENUE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON 24-03-2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE: 24 TH MARCH, 2010. COPY TO 1 THE ACIT, CIRCLE-1(1), VISAKHAPATNAM 2 SMT. RANI KAMALA DEVI, DASPALLA COMPLEX, SURYABAG H, VISAKHAPATNAM 3 THE CIT-I VISAKHAPATNAM 4 THE CIT(A), VISAKHAPATNAM 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM