Satish Kumar Mittal, J. - (1.) THESE appeals have been filed by the assessees against the order passed by the Income Tax Appellate Tribunal, Delhi Bench "E", Delhi (hereinafter referred to as the Tribunal) whereby it has been held that the entire amount of additional compensation as received by the assessees on the basis of the award given by the District Judge will be liable to be considered for the purpose of computation of capital gain under Section 45 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'), in the year of its receipt, irrespective of the fact that 50 per cent amount of the additional enhanced compensation was received on furnishing security in terms of the interim order passed by the appellate authority till the final decision of the appeal filed by the State, challenging the award of enhancing the additional compensation.
(2.) THE appellants have questioned the aforesaid decision of the Tribunal on the ground that it has failed to consider the basic fact that the amount of additional compensation received by the assessee under the interim order of the appellate court on furnishing security cannot be considered to have been received by the assessee in the year of receipt, which has not become final and against which the appeal is pending. The expression "received" as existing in Section 45(5)(b) of the Act would mean received in pursuance of the accrual of right to receive as a result of or in consequence of a decision given by a Court, Tribunal or authority settling the lis between the claimant and the State finally. The word "received" cannot be given a meaning of physical receipt of additional compensation without any right or title conferred upon the claimant by the adjudicatory process of the Court, Tribunal or authority. According to the appellants, the additional compensation is considered to be received within the meaning of Section 45(5)(b) of the Act, not when the additional compensation was actually received under the interim order of the court subject to furnishing security and subject to the final decision of the appellate authority, but it will be considered to be received on the date the dispute is finally decided by the appellate Court. Therefore, the additional compensation awarded in such situation cannot be assessed in the year in which it was actually received. Therefore, the appellants have made the prayer that the Tribunal has erred in law while holding that the provisions of Section 45(5)(b) of the Act were attracted to the case of the appellants herein, and have raised the following substantial questions of law which are arising from the order of the Tribunal for consideration/adjudication by this Court: (i) Whether on a proper and correct interpretation of the provisions of Section 45(5)(b) of the Income Tax Act, 1961, the Tribunal was right in law in holding that the amount of additional compensation received by the assessees, appellants herein, in pursuance of the interim orders subject to furnishing of security would be deemed to be the income for the purpose of computation of capital gains in the year of receipt of such amounts ? (ii) Whether the Tribunal was correct in holding that the amount received by the assessees fell within the ambit of Section 45(5)(b) of the Income Tax Act, 1961 as the decision rendered by the Hon'ble Supreme Court in the case of CIT v. : [1986]161ITR524(SC) no longer holds the field ? The IT Appeal Nos. 4 to 7 of 2005 were admitted on 10 -8 -2006, to be heard with IT Appeal No. 322 of 2004, in which the following question of law was framed: Whether the Hon'ble Tribunal was justified in applying the ratio laid down in the case of CIT v. Hindustan Housing & Land Development Trust Ltd. in the present case even after insertion of Section 45(5) in the Income Tax Act specifically for charging of enhanced compensation in the year of receipt. It is pertinent to mention here that the revenue filed appeals against several decisions of the Tribunal, wherein while applying the ratio laid down in the case of CIT v. : [1986]161ITR524(SC) and various other decisions of the different High Courts, including the Karnataka High Court in the case of Chief CIT v. : [2004]267ITR67(KAR) , it was held that Section 45(5)(b) would be attracted only when the assessee receives the enhanced compensation in pursuance of final award/order of a Court, Tribunal or other authority increasing the compensation and not on the actual receipt of the said amount under the interim order passed by the appellate Court. All those appeals filed by the revenue i.e. IT Appeal No. 322 of 2004 and other connected appeals were dismissed by this Court in IT Appeal No. 695 of 2005 (CIT v. Prem Singh, decided on 16 -5 -2007), while observing as under: At the outset, learned Counsel for the assessee contended that the question of law raised in the present appeals is squarely covered by the decision of this Court in IT Ref. No. 26 of 1997, CIT v. Karanbir Singh, Rajinder Kuti, decided on 17 -1 -2007 [reported at : (2008) 214 CTR (P&H) 585.], as these appeals also involved the same question of law as has been decided in the aforesaid case (supra). However, Mr. Putney, learned Counsel appearing for the revenue has contended that amendment in Section 45(5) of the Income Tax Act, 1961 ('the Act') has not been noticed in the said judgment. We are afraid that the contention of learned Counsel for the revenue is not correct as the Division Bench has specifically noticed the judgment of Karnataka High Court in the case of Chief CIT v. : [2004]267ITR67(KAR) , wherein the amendment inserted to Section 45(5) of the Act had been specifically dealt with and the similar question, as has been raised in these appeals, was decided against the revenue and in favour of the assessee. We have also perused the judgment rendered in Bikram Singh and Ors. v. : [1997]224ITR551(SC) . After going through the abovereferred two decisions, we are of the considered view that question raised in the present appeals is squarely covered by the aforesaid decisions. 3. It is also pertinent to mention here that in all the aforesaid appeals, filed by the revenue, the additional enhanced amount of compensation actually received was pertaining to the assessment years 1994 -95 to 1998 -99. While dismissing the appeals of the revenue , another Division Bench decision of this Court in IT Ref. No. 26 of 1997 (CIT v. Karanbir Singh, Rajinder Kuti) decided on 17 -1 -2007 (reported at : (2008) 214 CTR (P&H) 585 .J, was followed.
(3.) SHRI Sanjay Bansal, learned senior counsel for the appellant assessee submitted that the substantial questions of law involved in these appeals are squarely covered by the abovesaid two decisions rendered by this Court in IT Ref. No. 26 of 1997 (CIT v. Karanbir Singh, Rajinder Kuti, decided on 17 -1 -2007) and IT Appeal No. 695 of 2005 (CIT v. Prem Singh, decided on 16 -5 -2007), in which judgments of the Supreme Court in Bikram Singh and Ors. v. : [1997]224ITR551(SC) and of the Karnataka High Court in the case of Chief CIT v. Smt. Shantavva (supra) were followed. Those cases have been decided in favour of the assessee and against the revenue. Therefore, the Tribunal was not justified in law in taking a view contrary to the view taken by the Karnataka High Court and this Court. Learned Counsel further submitted that the aforesaid view taken by two Division Benches of this Court, following the view taken by the Karnataka High Court has been taken by various other High Courts in the following cases: (i) CIT v. Jeevan & Sons : (2000) 161 CTR (Raj) 242; (ii) Darapaneni Chenna Krishnayya (HUF) v. : [2007]291ITR98(AP) ; (iii) CIT v. ; (iv) CIT v. : [2001]248ITR614(Bom) ; (v) CIT v. : [2004]265ITR101(Ker) ; (vi) CIT v. : [2000]246ITR622(All) ; (vii) Anil Kumar Forma (HUF) v. : [2007]289ITR245(Mad) . On the other hand, Mr. Yogesh Putney, advocate, learned Counsel for the revenue submitted that neither in the case of Karnataka High Court in Chief CIT v. Smt. Shantavva (supra) nor in the Division Bench decisions of this Court in IT Appeal No. 695 of 2005 (CIT v. Prem Singh, decided on 16 -5 -2007) and IT Ref. No. 26 of 1997, CIT v. Karanbir Singh, Rajinder Kutu decided on 17 -1 -2007, or any other judgment cited by learned Counsel for the appellants, the effect of provision of Clause (c) of Section 45(5) of the Act and Sub -section (16) of Section 155 of the Act, which were inserted by the Finance Act, 2003 with effect from 1 -4 -2004, was considered. However, both these provisions have been taken into consideration by the learned Tribunal, while passing the impugned order.;