COMMISSIONER OF INCOME TAX Vs. DEHRADUN TEA COMPANY
HIGH COURT OF UTTARAKHAND
COMMISSIONER OF INCOME TAX
Dehradun Tea Company
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(1.)THIS appeal has been preferred by the Department against the judgment and order dated December 26, 2002, passed by the Income Tax Appellate Tribunal, Delhi Bench "F" Delhi, for the assessment years 1984 -85, 1985 -86, 1986 -87 to 1991 -92. The following questions have been framed in the memo of appeal for our determination by learned Counsel for the Department:
Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was legally correct in holding that interest accrued and paid to the assessee on additional compensation is not taxable on accrual basis by overlooking the decision of the Supreme Court in the case of Rama Bai v. : 181ITR400(SC) ?
(2.)THE brief facts of the case giving rise to the present appeal are that the notice under Section 148 dated February 27, 1995, was issued to the assessee which was served on February 29, 1995, after seeking necessary approval from the Commissioner of Income Tax, Meerut. In response to the said notice the assessee filed a return on January 31, 1997, at nil income. The assessee was holding plots of land at Dehradun. The plots were acquired by the Collector and compensation was paid to the assessee. The Assessing Officer made reassessment. The assessee filed appeals before the Commissioner of Income Tax (Appeals) for the assessment years 1986 -87, 1987 -88, 1988 -89, 1989 -90 and 1990 -91. The Commissioner of Income Tax consolidated the five appeals. The Commissioner of Income Tax partly allowed the appeals and held that the accrued interest so brought to tax at Rs. 30,48,004 in each year under consideration is not justified and the inclusion of this amount in the assessment years was deleted.
The Assistant Commissioner of Income Tax, Special Range, Dehradun, filed appeals for the assessment years 1986 -87 to 1990 -91 and 1984 -85, 1985 -86 and 1991 -92 before the Income Tax Appellate Tribunal, Delhi Bench "V" Delhi. The ground taken before the Income Tax Appellate Tribunal was that for the assessment years 1984 -85, 1985 -86, 1986 -87 and 1987 -88 the action of the Commissioner of Income Tax (Appeals) holding that income on account of interest on compensation did not accrue to the assessee was not justified. For the assessment years 1988 -89, 1989 -90, 1990 -91 and 1991 -92 the ground taken was that action of the Commissioner (Appeals) in holding that income on account of interest on compensation did not accrue to the assessee with effect from the assessment year 1988 -89 onwards as a result of an amendment in Section 45(5) of the Income Tax Act. The Income Tax Appellate Tribunal held that the grant of additional compensation and interest thereon has not become final and is sub judice in the High Court and the controversy in the case of Rama Bai v. : 181ITR400(SC) was different and it accordingly confirmed the order of the Commissioner of Income Tax for all the 8 years. The appeals were dismissed.
(3.)NOW against the impugned judgment and order dated December 26, 2002, the Department has come up in the appeal before this Court.
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