CIT v. Ghanshyam (Huf)
INCOME TAX ACT, 1961
Capital gains - Year of Taxability -Assessee received enhanced compensation and interest thereon
Assessee received enhanced compensation and interest thereon on his lands being acquired by Haryana Urban Development Authority. It did not offer amount of enhanced compensation and interest received thereon for taxation in return in view that amount of enhanced compensation received had not accrued to him during year of receipt. AO did not accept assessee contentions in regards to terms of section 45(5) enacted with effect from 1-4-1988, and accordingly, brought to tax enhanced compensation and interest thereon in year of receipt. Held: In cases where appeal was pending, Court/Tribunal/Authority, before which appeal was pending, permits claimant to withdraw, against security or otherwise, enhanced compensation, it was liable to be taxed under section 45(5) in year of receipt. Additional amount under section 23(1A) and interest on excess compensation under section 28 of Land Acquisition Act form part of enhanced compensation under section 45(5)(b) and, therefore it was liable to tax under section 45(5) in year of receipt.
Income-tax Act, 1961,Section 45, read with section 155, Circular No. 621, dated 19-12-1991
A.Y. : 1999-2000
Decision: In favour of revenue
Case Law Analysis:CIT v. Hindustan Housing & Land Development Trust Ltd. [1986] 161 ITR 524/27 Taxman 450A (SC)