Tulsi Ram Tyagi, Ghaziabad V. ACIT, Ghaziabad

ITA 4601/DEL/2010

• Counselvise Citation: 460120114 RSA 2010
• Duration Of Justice: 3 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: H
• Next Hearing Date: 10-03-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 18-10-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Assessee Lawyers: SALIL AGRAWAL
• Keywords: Capital asset; Opportunity of being heard; Capital receipt
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI DELHI DELHI BENCH BENCH BENCH BENCH H HH H : NEW DELHI : NEW DELHI : NEW DELHI : NEW DELHI BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G. BEFORE SHRI G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND VICE PRESIDENT AND SHRI SHRI SHRI SHRI CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG, ,, , JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ITA NO ITA NO ITA NO ITA NO. .. .4601/DEL/2010 4601/DEL/2010 4601/DEL/2010 4601/DEL/2010 ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR ASSESSMENT YEAR : : : : 2006 2006 2006 2006- -- -07 0707 07 SHRI TULSI RAM TYAGI, SHRI TULSI RAM TYAGI, SHRI TULSI RAM TYAGI, SHRI TULSI RAM TYAGI, C/O M/S V. KUMAR & CO., C/O M/S V. KUMAR & CO., C/O M/S V. KUMAR & CO., C/O M/S V. KUMAR & CO., CHARTE CHARTE CHARTE CHARTERED ACCOUNTANTS, RED ACCOUNTANTS, RED ACCOUNTANTS, RED ACCOUNTANTS, 1, NAVYUG MARKET, 1, NAVYUG MARKET, 1, NAVYUG MARKET, 1, NAVYUG MARKET, GHAZIABAD GHAZIABAD GHAZIABAD GHAZIABAD 201 001. 201 001. 201 001. 201 001. PAN : PAN : PAN : PAN : ACJPR7879P. ACJPR7879P. ACJPR7879P. ACJPR7879P. VS. VS. VS. VS. ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF ASSISTANT COMMISSIONER OF INCOME TAX, INCOME TAX, INCOME TAX, INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -2, C.G.O. COMPLEX 2, C.G.O. COMPLEX 2, C.G.O. COMPLEX 2, C.G.O. COMPLEX- -- -2, 2,2, 2, KAMLA NEHRU NAGAR, KAMLA NEHRU NAGAR, KAMLA NEHRU NAGAR, KAMLA NEHRU NAGAR, GHAZIABAD. GHAZIABAD. GHAZIABAD. GHAZIABAD. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI SALIL AGRAWAL, ADVOCATE AND SHRI SHAILESH GUPTA, CA. RESPONDENT BY : SHRI SAMEER SHARMA, SR.DR. ORDER ORDER ORDER ORDER PER G. PER G. PER G. PER G.D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, D.AGRAWAL, VP VPVP VP : : : : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A), GHAZIABAD DATED 5 TH AUGUST, 2010 FOR THE AY 2006-07. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. THAT THE AUTHORITIES BELOW WERE NOT JUSTIFIED IN TAXING THE INTEREST ON ENHANCED COMPENSATION AMOUNTING TO RS.71,25,706/- WHICH IS STILL UNDER DISPUTE BEFORE THE HONBLE HIGH COURT AT ALLAHABAD, AND NOT ACCRUED TO THE ASSESSEE AND HENCE NOT TAXABLE IN THE YEAR UNDER ASSESSMENT. 2. THAT INTEREST INCOME RS.35,94,331/- OF THE LATE SH . SHER SINGH, FATHER OF THE ASSESSEE COULD NOT BE CLUBBED IN HIS INCOME AND SHOULD BE ASSESSED SEPARATELY AS LEGAL HEIR OF THE LATE SH. SHER SINGH. ITA-4601/DEL/2010 2 3. THAT THE LEARNED ASSESSING AUTHORITY WAS NOT JUSTIFIE D IN ASSESSING THE ENTIRE INTEREST INCOME IN ONE YEAR. TH E INTEREST IS ACCRUED FROM YEAR TO YEAR FROM 1989 TO 20 05, SO IT SHOULD BE SPREAD OVER THE YEARS. 4. THAT THE APPELLANT CRAVES THE LEAVE TO ADD AND/OR TO AMEND ANY GROUNDS OF APPEAL AT THE TIME OF HEARING. 3. AT THE TIME OF HEARING BEFORE US, IT IS SUBMITTED B Y THE LEARNED COUNSEL THAT THE ASSESSING OFFICER MADE THE ADDITION OF ` 35,31,375/- AS INTEREST INCOME ON ENHANCED COMPENSATION. HE ALSO MA DE THE ADDITION OF ` 35,94,331/- BEING THE INTEREST INCOME OF THE ASSESSEES FATHER LATE SHRI SHER SINGH IN RESPECT OF ENHANCED C OMPENSATION. HE STATED THAT THESE COMPENSATIONS HAVE ARISEN DUE TO ACQUI SITION OF THE LAND IN THE YEAR 1987. THAT THE LAND ACQUIRED BY T HE GOVERNMENT WAS THE AGRICULTURAL LAND AND, THEREFORE, NOT A CAPITAL ASSET WITHIN THE MEANING OF INCOME-TAX ACT. THAT IN THE YEAR IN WHI CH LAND WAS ORIGINALLY ACQUIRED, THE REVENUE HAS ALREADY ACCEPTE D THE ASSESSEES CONTENTION THAT THE AGRICULTURAL LAND ACQUIRED BY T HE GOVERNMENT WAS NOT THE CAPITAL ASSET. THEREFORE, IN RESPECT OF ENHA NCED COMPENSATION, A DIFFERENT VIEW CANNOT BE TAKEN. HE, THEREFORE, SU BMITTED THAT THE ENTIRE ADDITION MADE BY THE ASSESSING OFFICER ON ACCOUN T OF INTEREST ON ENHANCED COMPENSATION OF THE ASSESSEE AS WELL AS HIS FATHE R IS A CAPITAL RECEIPT NOT CHARGEABLE TO TAX. HE ALTERNAT IVELY SUBMITTED THAT THE INCOME OF THE ASSESSEES LATE FATHER CANNOT BE CLUBB ED WITH THE INCOME OF THE ASSESSEE AND IS TO BE ASSESSED SEPARATELY AS A L EGAL HEIR. 4. LEARNED DR, ON THE OTHER HAND, STATED THAT NO SUCH CLAIM WAS MADE BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. HE ALSO STATED THAT NO EVIDENCE IS BROUGHT ON RECORD BY THE ASSESSEE TO ESTABLISH THAT THE LAND ACQUIRED BY THE UP GOVERNMENT WAS NOT A CAP ITAL ASSET. HE, ITA-4601/DEL/2010 3 THEREFORE, SUBMITTED THAT THE ORDER OF LEARNED CIT(A ) SHOULD BE SUSTAINED. 5. IN THE REJOINDER, IT IS POINTED OUT BY THE LEARNE D COUNSEL THAT DURING THE YEAR UNDER CONSIDERATION, WHAT IS TAXED BY THE ASSESSING OFFICER IS THE INTEREST ON ENHANCED COMPENSATION. THA T HONBLE APEX COURT IN THE CASE OF CIT VS. GHANSHYAM (HUF) [2009] 315 ITR 1 (SC) HELD THAT THE INTEREST IS A PART OF ENHANCED VALUE OF THE LAND. THAT THE ARGUMENT OF THE ASSESSEE NOW BEING RAISED IS IN THE LIGHT OF THE DECISION OF HONBLE APEX COURT WHICH WAS NOT AVAILABL E AT THE TIME WHEN THE ASSESSING OFFICER PASSED THE ORDER. 6. WE HAVE CAREFULLY CONSIDERED THE ARGUMENTS OF BOTH THE SIDES AND PERUSED THE MATERIAL PLACED BEFORE US. IN OUR OP INION, THE MATTER NEEDS REEXAMINATION AT THE END OF THE ASSESSING OFFICER IN THE LIGHT OF THE DECISION OF HONBLE APEX COURT IN THE CASE OF GHA NSHYAM (HUF) (SUPRA) WHEREIN, WITH REGARD TO INTEREST, THEIR LORDSH IPS HELD AS UNDER:- INTEREST IS DIFFERENT FROM COMPENSATION. INTEREST PAI D ON THE EXCESS AMOUNT UNDER SECTION 28 OF THE LAND ACQUISITION ACT, 1894, DEPENDS UPON A CLAIM MADE BY T HE PERSON WHOSE LAND IS ACQUIRED, WHEREAS INTEREST UNDER SECTION 34 IS FOR DELAY IN MAKING PAYMENT; IT POSTULA TES AWARD OF INTEREST AT 9 PER CENT PER ANNUM FROM THE D ATE OF TAKING POSSESSION ONLY UNTIL IT IS PAID OR DEPOSITED. IN TEREST UNDER SECTION 28 WOULD INCLUDE WITHIN ITS AMBIT BOTH THE MARKET VALUATION AND THE SOLATIUM AND IS PART OF THE AMOUNT OF COMPENSATION WHEREAS INTEREST UNDER SECTION 34 IS ONLY FOR DELAY IN MAKING PAYMENT AFTER THE COMPENSATION AMOUNT IS DETERMINED. INTEREST UNDER SECTION 28 IS A PART OF THE ENHANCED VALUE OF THE LAN D, WHICH IS NOT THE CASE IN THE MATTER OF PAYMENT OF INT EREST UNDER SECTION 34. 7. THE ASSESSING OFFICER WILL ALSO EXAMINE THE ASSESSEES CONTENTION THAT THE LAND WHICH WAS COMPULSORILY ACQUI RED BY THE UP ITA-4601/DEL/2010 4 GOVERNMENT WAS NOT A CAPITAL ASSET WITHIN THE MEANING OF THE INCOME- TAX ACT. THE ASSESSING OFFICER WILL ASCERTAIN ALL THE FACTS, WILL ALSO ALLOW ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THEREAFTER, WILL READJUDICATE THE ISSUE IN ACCORDANCE WITH LAW IN THE LIGHT OF THE DECISION OF HONBLE APEX COURT IN THE CASE OF GHANSHY AM (HUF) (SUPRA). 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DEEMED TO BE ALLOWED FOR STATISTICAL PURPOSES. DECISION PRONOUNCED IN THE OPEN COURT ON 14 TH MARCH, 2014. SD/- SD/- ( (( (CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG CHANDRA MOHAN GARG) )) ) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) (G.D.AGRAWAL) JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT VICE PRESIDENT DATED : 14.03.2014 VK. COPY FORWARDED TO: - 1. APPELLANT : SHRI TULSI RAM TYAGI, SHRI TULSI RAM TYAGI, SHRI TULSI RAM TYAGI, SHRI TULSI RAM TYAGI, C/O M/S V. KUMAR & CO., C/O M/S V. KUMAR & CO., C/O M/S V. KUMAR & CO., C/O M/S V. KUMAR & CO., CHARTERED ACCOUNTANTS, CHARTERED ACCOUNTANTS, CHARTERED ACCOUNTANTS, CHARTERED ACCOUNTANTS, 1, NAVYUG MARKET, GHAZIABAD 1, NAVYUG MARKET, GHAZIABAD 1, NAVYUG MARKET, GHAZIABAD 1, NAVYUG MARKET, GHAZIABAD 201 001. 201 001. 201 001. 201 001. 2. RESPONDENT : ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE CIRCLE CIRCLE CIRCLE- -- -2, C.G.O. COMPLEX 2, C.G.O. COMPLEX 2, C.G.O. COMPLEX 2, C.G.O. COMPLEX- -- -2, 2,2, 2, KAMLA NEHRU NAGAR, GHA KAMLA NEHRU NAGAR, GHA KAMLA NEHRU NAGAR, GHA KAMLA NEHRU NAGAR, GHAZIABAD. ZIABAD. ZIABAD. ZIABAD. 3. CIT 4. CIT(A) 5. DR, ITAT ASSISTANT REGISTRAR