GOBARDHANDAS JAGANNATH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) IN this case the assessee is an HUF which carries on business in cloth and oil milling at Gaya and also owns house properties. The assessee also owned certain land at Gaya which was requisitioned by the Government of India for its use and occupation. The assessment in this case relates to the year 1947 -48 and in the corresponding accounting year the assessee received a sum of Rs. 272 from the Central Public Works Department as compensation for the use and occupation of the land. The assessee did not include this amount in the return for the asst. year 1947 -48. The ITO required the assessee to produce correspondence relating to the payment of the amount. The assessee did not produce the correspondence nor did he furnish any material to show what was the nature of the payment and what was the period to which it related. The ITO thereupon decided that the sum of Rs. 8,272 was rent received by the assessee in a lump sum and was liable to be taxed. An appeal was taken by the assessee to the AAC against the decision of the ITO. It was argued before the AAC that the amount was agricultural income and was not liable to be taxed. This argument was rejected by the AAC and the appeal was dismissed. The assessee preferred further appeal to the Tribunal and his contention was that the amount of Rs. 8,272 was a capital receipt and was not liable to be taxed. This argument was rejected by the Tribunal on the finding that the amount of Rs. 8,272 represented payment of rent in a lump sum.

(2.) IN these circumstances the Tribunal has submitted the following question of law for the opinion of the High Court : "Whether in the facts and circumstances of the case the sum of Rs. 8,272 received by the assessee family from the Aviation Division of the Central Public Works Department, was income from other sources liable to inclusion in its total income or was a capital receipt liable to be excluded from the assessment?"

(3.) A similar view has been taken by a Bench of this Court in H. P. Bannerji's case (1951) 19 ITR 596. The material facts of that case are closely similar to the facts of the present case and it was held by the Division Bench in that case that the amount of compensation received by the assessee from the military authorities was really a profit derived from the land and was therefore taxable.