COMMISSIONER OF INCOME TAX Vs. BHANWARLAL CHOUDHARY

JUDGEMENT

(1.) THIS application under Section 256(2) of the Income-tax Act, 1961, has been made by the Department seeking a direction against the Income-tax Appellate Tribunal to refer the following questions of law for the opinion of this court :

(2.) THE necessary facts leading to the instant application are that the Land Acquisition Officer, Jodhpur, made an award with respect to the land of the assessee-respondent acquired under the notification dated October 10, 1974. On appeal, the amount of compensation was enhanced. THE respondent-asses-see received the enhanced compensation on October 27, 1986. An assessment was made on the amount of compensation as well as enhanced compensation in the assessment year of 1975-76. THE proceedings were reopened under Section 147, Clause (a), for the year 1987-88 on the ground that the amount of compensation has been received in the year 1986. THE assessee took the plea that income by way of capital gain was assessable in the relevant assessment year only and the amount of interest was to be assessable in respect of the year of which the interest related. This plea was rejected by the Assessing Officer. THE Commissioner of Income-tax (Appeals) set aside the order of the assessment. THE Commissioner of Income-tax held that as the amount of enhanced compensation was received by the assessee in the year 1986, therefore, the capital gain could not be assessed for the assessment year 1987-88 as per Section 45(5) as the same was introduced in the year 1988. On second appeal by the Department, the Income-tax Appellate Tribunal agreed with the view of the Commissioner of Income-tax.