COMMISSIONER OF INCOME TAX Vs. RANI TARA DEVI

JUDGEMENT

(1.) This order shall dispose of afore-mentioned Income Tax Appeals filed by the Revenue under Section 260A of the Income Tax Act, 1961 in respect of Assessment Year 2004-05 arising out of an order passed by the Income Tax Appellate Tribunal, Chandigarh Bench (A), Chandigarh (for short 'the Tribunal') on 28.08.2008. After hearing learned counsel for the parties, the following substantial question of law arises for consideration:

(2.) The said question of law arises out of the fact that the land of the assessee, the subject matter of present assessment, was intended to be acquired by way of a notification dated 04.05.1995 issued under Section 4 of the Land Acquisition Act, 1894. The said notification was in respect of land measuring 184 acres in Village Jhuriwala and around 30.47 acres in Village Bana Madanpur. The land of the assessee in these two Villages namely Bana Madanpur and Jhuriwala measures 36 Kanal 6 Marla and 149 Kanal 2 Marlas respectively. The assessee received compensation on account of acquisition of land. The Assessing Officer assessed interest on the said compensation as taxable in the year under consideration. Such order was set aside by the Commissioner of Income Tax (Appeals) by holding that since the litigation in respect of compensation is pending finalization, therefore, the amount of interest is not taxable in the hands of the assessee. The said order of the Commissioner of Income Tax (Appeals) was upheld by the Tribunal. Still aggrieved, the Revenue is in appeals under Section 260A of the Act.

(3.) During the Assessment Year 2003-04, the Revenue had raised the following substantial questions of law in Income Tax Appeal No.955 of 2008: