COMMISSIONER OF WEALTH TAX Vs. T GIRIJA AMMAL

JUDGEMENT

(1.) THESE tax appeals were preferred by the Revenue both in respect of income Tax as well as Wealth Tax, against the common order passed by the income Tax Appellate Tribunal dated 16. 10. 2003, raising the following common substantial questions of law.

(2.) THE facts leading to the above questions of law are as under: i) The assessment years involved are 1981-82 to 1990-91. The assessee filed Return of income for the assessment year 1981-82 onwards, and assessment was completed under Section 143 (1) (a) of the Act. During the course of income tax and wealth tax proceedings for the assessment year 1985-86, the Income Tax Officer found that the Subcollector, Thirupattur, apart from awarding the compensation and additional compensation, had also awarded interest on additional compensation to the assessee for the compulsory acquisition of the assessee's land at Ambur for TNHB and National Highways by the Government of Tamil Nadu, by order dated 03. 07. 1987 as amended, on 30. 11. 1987. Possession was taken over by the Government on 21. 10. 1980. The sub Court awarded interest on additional compensation from the date of taking over possession by the Government, i. e. 21. 10. 1980 to 31. 03. 1990. The entire dispute raised in these appeals are centered around the above aspect of receiving compensation, additional compensation and interest thereon. In respect of wealth tax assessment, it is related to the receipt of compensation and additional compensation. The dispute is whether the assessee had owned the amount of compensation and whether received it or not on the valuation date of the respective assessment years. Since the assessee had not disclosed any interest income on the additional compensation for the period 01. 04. 1984 to 31. 03. 1985, in the return filed by her for the assessment year 1985-86, the income Tax Officer had reason to believe that the interest income chargeable to tax for the assessment year 1985-86 had escaped assessment. ii) The appellant owned 5. 01 acres of land at Thirupattur which was acquired by the Land Acquisition Officer, Thirupattur under the Land acquisition Act, by notification issued under Section 4 of the Land acquisition Act, on 11. 05. 1977. The Housing Board took possession of the land on 21. 10. 1980. The Land Acquisition Officer had awarded a compensation of rs. 45,038/- on 20. 07. 1982. The capital gains on this compensation to the tune of Rs. 37,190/- was offered for taxation by the assessee for the assessment year 1983-84. Subsequent to the award of the Land Acquisition Officer, the appellant put forth a claim under Section 18 of the Land Acquisition Act claiming a higher compensation. In pursuance of this claim, the Sub Judge awarded enhanced compensation of Rs. 40,76,708/- which was computed in the following manner:- <FRM>JUDGEMENT_37_TLMAD0_2006Html1.htm</FRM> iii) While computing the income of the assessee for various assessment years, the Assessing Officer made addition to the Return of income under the heading "other Sources", bringing to tax the interest on additional compensation, on the ground that the same had accrued in the various years and held that it is taxable on accrual basis. Aggrieved by the order, the assessee filed an appeal to the C. I. T. (A), and C. I. T. (A) accepted the contention of the assessee and allowed the appeals. Aggrieved by the order of the C. I. T. (A), the Revenue filed appeals before the Income Tax Appellate tribunal. The Tribunal also confirmed the order of the C. I. T. (A) and dis missed the Revenue's appeal.

(3.) THE learned counsel for the appellant contended that the assessing Officer had rightly brought to tax, the interest element in each of the respective assessment years. Further it was submitted that the method adopted by the Assesssing Officer by bringing to tax the entire compensation including interest, was proper. He also further stated that in Section 45 (5) (c) and also in Section 155 (16), there is a provision for revision of assessment suo motu, in the event of the award passed earlier getting reduced in subsequent judgment, which would clearly show that the intention of the legislature was to have the compensation assessed as and when received, no matter it is challenged in appeal in higher forum or not.