COMMISSIONER OF INCOME TAX Vs. BIR SINGH (HUF)

JUDGEMENT

(1.) This appeal under Section 260A of the Income-tax Act, 1961 (for short "the Act") has been filed by the Revenue against the order dated 19.1.2004, passed by the Income Tax Appellate Tribunal, Bench 'SMC-1', Delhi (in short "the Tribunal") in Income-tax Appeal No. 452/Del/2001, relating to assessment year 1997-98, claiming the following substantial questions of law for determination by this Court:

(2.) Briefly stated the facts of the case necessary for adjudication as narrated in the appeal are that the respondentassessee received some amount of enhanced compensation in respect of the land acquired under the Land Acquisition Act, 1894 (for short "the 1894 Act"). It was claimed that the said amount and the interest accrued thereon were not taxable as the amount so received was not final and was still in dispute, and the same had been ordered to be paid on furnishing a security. The plea of the assessee was not accepted by the assessing officer on the ground that the amount by which the quantum of compensation was enhanced or would be enhanced in future by the court shall be deemed to be the income, chargeable under the head 'capital gains' of the previous year in which such amount was received.

(3.) The assessee filed appeal before the Commissioner of Income Tax (Appeals), [hereinafter referred to as "CIT(A)"]. The CIT (A) directed that the income from capital gains and the interest received by the assessee be charged in the year of receipt and the percentage of capital gains arising out of payment, covered by the security should not be treated as income for the year but the remaining amount which was not covered by the security should be treated as income for the year and charged to tax under the head 'capital gains'. The CIT(A) further directed that deductions under Sections 54B and 54F of the Act be allowed from the date of actual receipt of the enhanced amount of compensation. The Revenue filed appeal against the order of the CIT(A) before the Tribunal which was dismissed by order dated 19.1.2004.