COMMISSIONER OF INCOME TAX Vs. ASRAFI DEVI RAJGHARIA

JUDGEMENT

(1.) In this reference under Section 256(1) of the I.T. Act, 1961, the facts are shortly as follows : Smt. Asrafi Devi Rajgharia, the assessee, had been the owner of premises No. 212, Bagmari Road, Calcutta, comprising of land measuring 16 bighas and 17 cottahs which was acquired under the Calcutta Improvement Trust Scheme No. VII (Manicktala). Declaration in respect of the said land under Section 6 of the Land Acquisition Act, 1894, was published on the 12th August, 1954, and general notice under Section 9(1) thereof was published on the 6th January, 1955. An award under Section 11 of the said Act was made on the 22nd September, 1959, whereunder Rs. 3,06,164'50 was determined to be payable as compensation. Possession of the said land was taken from the assessee on the 19th January, 1960, The assessee being dissatisfied with the said award made a reference to the Calcutta Improvement Tribunal where she also claimed compensation for damage suffered due to delay in making the award under Section 48A of the said Act. Following an unreported decision of this court in Appeal from Original Decree No. 173 of 1953 entitled Kedarnalh Jute Manufacturing Co. Ltd. v. State of West Bengal, the Calcutta Improvement Tribunal by its judgment and order dated the 22nd February, 1960, awarded a further compensation to the assessee as follows : <FRM>JUDGEMENT_380_ITR142_1983Html1.htm</FRM>

(2.) In her assessment for the assessment year 1963-64 for which the relevant previous year ended on the 27th October, 1962, the assessee claimed that the said sum of Rs. 31.114.53 was additional compensation for acquisition of her said land. The ITO, following an order of assessment in an earlier year in respect of the said initial compensation awarded to the assesses, held that Rs. 26,983 was taxable as capital gains and that the balance of Rs. 4,132 was taxable as income from other sources and levied tax accordingly.

(3.) In her appeal to the AAC the assesses contended that Rs. 26,983 was not extra price for the said land but compensation for damages suffered by her in consequence of the delay of three years, one month and nine days in making the award for compensation beyond the statutory period of two years, by way of loss of interest on the amount of the award assessable in the assessment years 1957-58 to 1960-61 and not in the year in issue. The AAC held that the right of the assessee to receive the said amount arose out of the said order of the Calcutta Improvement Tribunal and was assessable in the year under appeal as interest income under the head "Other sources" and confirmed the order of the ITO with regard to Rs. 3,508 only.