M.M.KUMAR, J. - (1.) THE following question of law has been referred for opinion of this Court by Income -tax Appellate Tribunal, Chandigarh asst. yr. 1986 -87 : "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the amount of amount having been utilized/invested in discretion of the assessee, was not includible in the total income of the assessee -
(2.) BRIEFLY the facts, as mentioned in the statement of the case, are that the agricultural and belonging to the assessee was acquired by the Punjab State Electricity Board in 1962. During the assessment year in question, the assessee received enhanced compensation and interest to the tune of Rs. 11,87,485 and Rs. 17,06,686 respectively. The AO held that the entire amount of interest received at Rs. 17,06,686 was assessable in the assessee's hands for the asst. yr. order of assessment on this count, the assessee preferred an appeal before the Commissioner of Income -tax (Appeals) [for short, 'the CIT(A)']. The primary contention raised by the assessee in appeal before CIT(A) was that the amount of interest received by the assessee was not at all taxable in his hand during the year in question in terms of judgment of Hon'ble the Supreme Court in CIT vs. Hindustan Housing & Land Development Trust Ltd. (1986) 58 CTR (SC) 179 : (1986) 161 ITR 524 (SC). In the alternative, it was submitted that in any case, the entire amount of interest of Rs. 17,06,686 was not assessable during the year in question as the interest had accrued year after year and the interest relatable to the assessment year in question could at best be assessed during that year. The CIT(A) did not accept the primary contention raised by learned counsel for the assessee but while accepting the alternative plea, directed the AO to bring under assessment only that amount of interest which accrued to the assessee during the assessment year in question. For that purpose, the CIT(A) relied upon decision of Hon'ble the Supreme Court in Smt. Rama Bai vs. CIT (1990) 84 CTR (SC) 164 : (1990) 181 ITR 400 (SC). The Revenue was not aggrieved against the order passed by the CIT(A) directing the assessment of only interest pertaining to the assessment year in question. However, the assessee, being still aggrieved, preferred an appeal before the Tribunal. The Tribunal relying upon decision of Hon'ble the Supreme Court in Hindustan Housing & Land Development Trust Ltd.'s case (supra) accepted the appeal of the assessee and directed that as the matter regarding compensation had not attained finality but was still fluid, no amount of interest should be held to be taxable.
(3.) WE have heard learned counsel for the Revenue. However, no one has chosen to put in appearance on behalf of the assessee. The primary contention raised by learned counsel for the Revenue is that the principles of law laid down in Hindustan Housing & Land Development Trust Ltd.'s case (supra) are not applicable in the facts and circumstances of the present case as the right to receive compensation by the assessee is not in dispute and it is only the quantification thereof, on account of which the appeals were pending at the relevant time. Merely because the quantum issue had not attained finality, the amount which had actually been received and was available at the discretion of the assessee could not be held to be non -taxable as the same would be totally against the spirit of the taxing statute. He referred to and relied upon a judgment of the Andhra Pradesh High Court in CIT vs. Smt. M. Sarojini Devi (2001) 250 ITR 759 (AP). However, we do not find any merit in the contention raised by learned counsel for the Revenue as against a solitary judgment of Andhra Pradesh High Court in Smt. M. Sarojini Devi's case (supra); there are many judgments of different High Courts taking a view in favour of the assessee on the issue, namely, CIT vs. Laxman Das & Anr. (2000) 246 ITR 622 (All); Director of IT (Exemption) vs. Goyal Charitable Trust (1995) 125 CTR (Del) 426 : (1995) 215 ITR 672 (Del); Chief CIT & Anr. vs. Smt. Shantavva (2004) 188 CTR (Kar) 162 : (2004) 267 ITR 67 (Kar) and CIT vs. Abdul Mannan Shah Mohammed (2001) 248 ITR 614 (Bom). A Special Leave Petition in a similar case was dismissed by Hon'ble the Supreme Court reported in CIT vs. Janabai Vithobai Dudhe (2004) 268 ITR (St) 215. In Abdul Mannan Shah's case (supra), it was held as under : "Secondly, whether the said amount could be taxed when it was specifically deposited (disputed) by the Government in appeal to the High Court. In the case of CIT vs. Hindustan Housing and Land Development Trust Ltd. (1986) 58 CTR (SC) 179 : (1986) 161 ITR 524 (SC), the Supreme Court has held that when the Government has appealed against the award and the additional amount of compensation was deposited in the Court, it was not taxable at that stage as the additional compensation would not accrue as income when it was specifically disputed by the Government in appeal. In view of the said judgment of the Supreme Court, there is no merit in this appeal. No substantial question of law arises. The judgment of the Supreme Court, on facts, squarely applies to the facts of the present case. Hence, the appeal is dismissed." The view expressed by Bombay High Court in Abdul Mannan Shah's case (supra) was followed in a subsequent order As reported in (2004) 268 ITR (St) 215 the special leave to appeal against the subsequent order passed by Bombay High;