COMMISSIONER OF INCOME TAX Vs. RAHMAN O T

JUDGEMENT

(1.) THE following two questions have been referred to this Court under sub -s. (1) of S. 256 of the IT Act, 1961 :

(2.) THE assessee, O. T. Rahman, owned 54 bighas 3 khathas and 17 lechas of land and that land was acquired under the Land Acquisition Act I of 1894, After the market value of the land was determined by the Land Acquisition Officer, a reference was made to the civil Court and later, an appeal to the High Court was made at the instance of the landholder, the assessee. Compensation was ultimately fixed by the High Court on April 29, 1974. The question raised is with reference to the interest ordered to be paid to the landholder.

(3.) THE landholder, the assessee, does not maintain accounts. The ITO held that the interest of Rs. 73,909 accrued to the assessee in the asst. year 1975 -76 regardless of the circumstance or fact when the assessee received the amount of Rs. 25,609. The assessment made earlier, he stated, is to be treated as a "protective measure". The AAC, Shillong, ordered the assessee be taxed on accrual basis and the ITO was directed to tax the assessee accordingly. The Tribunal, in their order, followed the decision of the Allahabad High Court in Addl. CIT vs. Virendra Singh 1978 CTR (All) 162 : (1979) 118 ITR 923 (All), and confirmed the order of the AAC. It is at the instance of the Revenue that the two questions are referred to this Court for opinion.