COMMISSIONER OF INCOME TAX Vs. SANKARI MANICKYAMMA SMT

JUDGEMENT

(1.) AT the instance of the Commissioner of Income-tax, the Income-tax Appellate Tribunal referred under Section 256(1) of the Income-tax Act, 1961 (referred to hereinafter merely as "the Act"), the following question for our decision :

(2.) THE assessment year, in the instant case, is 1964-65 for which the department adopted the relevant accounting year as the year ending with March 31, 1964.

(3.) ON appeal, the Appellate Assistant Commissioner confirmed the decision of the Income-tax Officer, observing that the award of interest, under Section 28 of the Land Acquisition Act, 1894, is discretionary and that the interest has to be calculated on the extra amount of compensation awarded by the court, and that the said amount of compensation was not determined till the court delivered the judgment, and the interest received by the appellant accrued to him only on the date of the judgment. According to the Appellate Assistant Commissioner, even if this interest is to he calculated with reference to the period of 26 years, that cannot be said to have accrued to the assessee before the date of the judgment of the court. In further appeal before the Tribunal, the Tribunal upheld the claim of the assessee and allowed the appeal holding that since the land was acquired in the year 1933, and the assessee's right to receive the correct value of her land accrued to her immediately when the land was acquired, the amount which was legally taxable as income from interest for the relevant year was Rs. 31,659 divided by 26, i.e., Rs. 1,260.