Decided on February 26,1982



K.A. Thanikachalam, Judicial Member - (1.) THIS appeal is directed against the order of the AAC dated 3-10-1980 passed in appeal No. VSP. 13 of 1980-81. The assessment year involved in this appeal is 1967-68.
(2.) According to the facts of this case, the Land Acquisition Officer acquired the half share of land belonging to the assessee in TS No. 367/A1 admeasuring Ac. 4-17075 sq. ft. and passed an award No. 6/66 dated 8-8-1966. Not satisfied with that, the assessee requested for a reference under Section 18 and he was granted additional compensation of Rs. 50,240 in O.P. No. 64/67 in Sub-Court, Vizag. The ITO reopened the assessment under Section 147(a) of the Income tax Act, 1961 ("the Act"), and assessed the additional compensation in that year, , since according to the ITO the date of award was within the accounting period relevant to the assessment year 1967-68. Before the ITO the assessee contended that the land acquired by the Municipality was agricultural land and in support of his claim he filed a letter dated 6-2-1977 obtained from the Village Munsiff, stating that the lands in Survey No. 367/A were classified as agricultural lands. The assessee also filed a copy of the order passed by the District Munsiff in order to support his claim that the lands in question were of agricultural nature. Since the assessee did not produce the adangal as claimed by the (TO, he came to the conclusion that the assessee's contention that the lands were of agricultural nature cannot be accepted.
(3.) THE assessee further contended that the provisions of Section 147 are not applicable in his case since he had no taxable income to file a return under Section 139(2) for the assessment year 1967-68 as per the original award. Basing upon the Sub-Judge's order granting additional compensation and also since the ITO was of the view that the said order relates back to the year in which the land was acquired by the Municipality, the ITO negatived the contention put forward by the assessee. On appeal, by following the decision of the Supreme Court in the case of ITO v. Lakhmani Mewal Das [1976] 103 ITR 437 and another decision of the Supreme Court in the case of Modi Spg. & Wvg. Mills Co. Ltd. v. ITO [1970] 75 ITR 367, the AAC came to the conclusion that since there is no default on the part of the assessee under Section 139(1) of the Act, Section 147(a) is not applicable to the facts of the present case. Even on merits, the AAC came to the conclusion that the lands in question were of agriculture in nature and, accordingly, he directed the ITO to delete the entire income assessed on the basis of additional compensation received by the assessee.;

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