G NEGESWARA RAO Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) The petitioner is not present, nor is he represented by any counsel. Heard learned standing counsel for the Income-tax Department appearing for the respondent.

(2.) The assessee is an individual deriving agricultural income as a protected tenant. The State Government acquired the lands which were in his possession as a protected tenant and an award was passed on 26/03/1973. On a reference made to the City Civil Court, Hyderabad, the compensation was enhanced and interest was directed to be paid from the date of acquisition till the payment of compensation. On further appeal by the State Government, this court reduced the quantum of compensation, but confirmed the direction relating to payment of interest. The Income-tax Officer made the assessment on the entire interest relying on the decision of this court in CIT v. Smt. Sankari Manickyamma [1976] 105 ITR 172. On appeal, the Commissioner of Income-tax (Appeals) confirmed the decision of the assessing authority. Aggrieved by that order, the assessee preferred a further appeal before the Income-tax Appellate Tribunal. The Tribunal confirmed the order of the Commissioner of Income-tax. At the instance of the assessee, the following question was referred for decision of this court, under section 256(1) of the Income-tax Act, 1961 :

(3.) Against the decision of this court in CIT v. Smt. Sankari Manickyamma [1976] 105 ITR 172, the assessee had filed an appeal before the Supreme Court. In that appeal, the decision of this court was reversed (See Sankari Manickyamma v. CIT [1990] 181 ITR 400 (SC)) holding that the interest on enhanced compensation awarded by the court on a reference under section 18 of the Land Acquisition Act or on further appeal in respect of the land acquired has to be taken to have accrued not on the date of the order of the court granting enhanced compensation but as having accrued year after year from the date of delivery of possession of the land till the date of such order, and such interest cannot be assessed to income-tax in one lump sum in the year in which the order is passed.