SUHAS CHANDRA SEN,J. - (1.) THE following question of law has been referred by the Tribunal to this Court under s. 256(1) of the IT Act, 1961 ( " the Act" ) : "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the interest of Rs. 21,295 awarded by the High Court in the appeal preferred by the assessee for enhanced compensation on the requisition of his house property by the Government was not interest but an ex gratia payment by way of compensation and in that view in deleting the aforesaid interest income added by the ITO as income from other sources ?"
(2.) THE assessment year involved was 1980-81 for which the relevant previous year was the calendar year 1979. The assessee was the owner of the premises No. 50A, Theatre Road, Calcutta, which was requisitioned by the Government of West Bengal on 23rd March, 1961. The monthly compensation rent was fixed at Rs. 835 by the Land Acquisition Collector. The amount of compensation was raised to Rs. 1,200 per month by the arbitrator appointed at the instance of the assessee under s. 11(1)(b) of the West Bengal Premises Requisition and Control (Temporary Provision) Act, 1947.
(3.) AGAINST this award both the assessee and the Land Acquisition Collector preferred appeals to the Calcutta High Court. The High Court fixed the monthly compensation at Rs. 1,600 and further ordered that interest at the rate of six per cent shall be payable on the enhanced amount of compensation from the date of possession till the date of payment. The interest amount came to Rs. 21,295. The ITO treated the amount of interest as "income from other sources" in the assessment order.;