CIT, FARIDABAD V. LAXMAN SINGH . FARIDABAD

ITA/327/2009

AI Insights

The case involves an appeal by the Commissioner of Income Tax, Faridabad against Sh. Laxman Singh concerning the taxability of enhanced compensation and interest thereon for the assessment year 2000-01. The Tribunal had previously ruled in favor of the assessee, agreeing with the CIT(A)'s decision which was based on a prior judgment of the High Court. However, the Revenue challenged this decision citing a Supreme Court judgment that amended the understanding of Section 45(5) of the Income-tax Act, 1961, effective from April 1, 1998, which deemed enhanced compensation as income in the year it was received. The High Court, upon reviewing the submissions and the relevant legal provisions, set aside the Tribunal's and CIT(A)'s orders and remanded the case for further consideration of unresolved issues.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 689548 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 26-04-2010
• Assessment Year: misc
• Other Referred Cases: CIT v. Ghanshyam (HUF) (2009) 315 ITR 1 (S.C.)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: AVNEESH JHINGAN
• Assessee Lawyers: URVASHI DHUGGA
• Keywords: Deemed income; Interest on enhanced compensation; Taxability of enhanced compensation; Income by way of enhanced compensation
• Section: 45(5); 260-A

Judgement Text

"ITA No.327 of 2009 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.327 of 2009 Date of decision:26.04.2010 The Commissioner of Income Tax, Faridabad ...Appellant Versus Sh.Laxman Singh ...Respondent CORAM: HON'BLE MR.JUSTICE M.M.KUMAR HON'BLE MR.JUSTICE JITENDRA CHAUHAN Present: Ms.Urvashi Dhugga, Advocate for the petitioner. Mr.Avneesh Jhingan, Advocate, for the assessee-respondent. 1. To be referred to the reporters or not? 2. Whether the judgment should be reported in the Digest? M.M.KUMAR, J. The instant appeal filed by the Revenue under Section 260-A of the Income-tax Act, 1961(for brevity `the Act') is directed against order dated 12.9.2008 passed by the Income Tax Appellate Tribunal, Delhi Bench (for brevity `the Tribunal') in ITA No. 1513/Del/2008 for the assessment year 2000-01. The only issue raised before the Tribunal was with regard to taxability of enhanced compensation and interest thereon. The Tribunal while agreeing with the order passed by the CIT(A) on 6.2.2008 has placed reliance on a judgment of this Court rendered in LPA No.1852 of 2001. ITA No.327 of 2009 2 The tribunal took a view that income by way of enhanced compensation could not have accrued to the assessee and the CIT (A) was justified in reducing the amount while computing the total income. Learned counsel for the revenue has placed reliance on a judgment rendered in CIT v. Ghanshyam (HUF) (2009) 315 ITR 1 (S.C.) and argued that after amendment of Section 45 (5) of the Act w.e.f.1.4.1998, the amount of enhanced compensation is deemed to be income of the previous year, in which it is received. She claims that the substantial question of law is covered in favour of the revenue and against the assessee. Learned counsel for the assessee-respondent, has not been able to dispute the aforesaid view. However, he has argued by drawing our attention to page 24 of the paper book that a number of other arguments were raised before the CIT(A), which had not been dealt with at that stage for the reason that on the issue of taxability, the matter stood decided in favour of the assessee-respondent. After hearing the learned counsel for the parties and perusal of the paper book, we are of the view that the order passed by the Tribunal is not sustainable in light of the judgment of Hon'ble the Supreme Court in Ghanshyam's case (supra). Accordingly, the orders of the Tribunal as well as that of the CIT(A) have to be set aside. As a sequel to the above discussion, the impugned order of the Tribunal is set aside. However, in view of the submissions made by the learned counsel for the assessee-respondent that some other issues which have not been decided by the Tribunal of the CIT(A) are required to be decided. Therefore, we remit the matter back to the Tribunal for deciding any issue which has not been decided earlier. For the aforesaid purpose, the ITA No.327 of 2009 3 parties through their counsel are directed to appear before the CIT(A) on 27.5.2010. The CIT (A) shall decide all the remaining issues as per law. (M.M.KUMAR) JUDGE 26.04.2010 (JITENDRA CHAUHAN) mk JUDGE "