SATISH KUMAR MITTAL, J. - (1.) PASSED by the Income -tax Appellate Tribunal, New Delhi (hereinafter referred to as 'the Appellate Tribunal'). 2007 passed by the Tribunal, by raising the following substantial question of law : "Whether, in the facts and circumstances of the case, the learned Tribunal is right in law in holding that he enhanced compensation received by the assessees during the pendency of dispute of compensation before the Hon'ble Courts is deemed to be income for the purpose of computation of capital gain in the year of receipt in terms of the provisions of s. 45(5) of the IT Act - 3. While deciding ITA No. 2568/Del/2003 of assessee Hari Kishan (HUF) and ITA No. 2569/Del/2003 of assessee Smt. Chandrawati, both for the asst. yr. 1998 -99, it has been held by the Tribunal vide aforesaid order that the amount of enhanced compensation as received by the assessee during the pendency of the dispute before the Court will be liable to be considered for the purpose of capital gains under s. 45 of the IT Act, 1961 (hereinafter referred to as 'the Act') in the year of its receipt, irrespective of the fact that the dispute has not attained finality.
(2.) In this case, the aforesaid assessees received the interim compensation during the pendency of the appeal on account of acquisition of their land during the asst. yr. 1998 -99 amounting to Rs. 19,23,468 and 12,89,026, respectively. The AO taxed the capital gain on the enhanced compensation holding that the same was taxable in the year of receipt under s. 45(5) of the Act. In appeal, CIT(A) confirmed the decision of the AO. Against that order, the assessees filed appeals before the Tribunal. The Tribunal by following the decision of the Special Bench in case Dy. CIT vs. Padam Prakash (HUF) (2006) 104 TTJ 989 (Del)(SB) has held that the enhanced compensation is taxable in the year of receipt, irrespective of the fact whether any dispute was pending or not. The Tribunal has distinguished the judgment of the Hon'ble Supreme Court in case of CIT vs. Hindustan Housing & Land Development Trust Ltd. (1986) 58 CTR (SC) 179 : (1986) 161 ITR 524 (SC) while observing that in that case there was no occasion to take note of the provisions Act.
(3.) The controversy in these appeals is exactly the same as involved in Chandi Ram vs. CIT (2008) 217 CTR (P&H) 113 : under : "13. In the present cases, the dispute relates to the asst. yrs. 1994 -95 to 1998 -99 and during that period, only s. 45(5) (b) of the Act was applicable, which has already been interpreted by this Court and various other Courts, wherein it has been clearly held that s. 45(5)(b) will be attracted only when the assessee receives the enhanced compensation in pursuance of a final award/order of a Court, Tribunal or other authority increasing the compensation. If any amount is received after stay of the award, in pursuance of any interim order, as a payment subject to the final result, it will not be an amount received as enhanced compensation as contemplated under s. 45(5)(b), but only an interim payment received subject to final decision. Since this Court has already taken the view, therefore, in our opinion, the Tribunal was not justified in taking contrary view to the view taken by this Court in CIT vs. Karanbir Singh, Rajinder Kuti, Patiala, dt. Karnataka High Court in the case of Chief CIT vs. Smt. Shantavva (2004) 188 CTR (Kar) 162 : (2004) 267 ITR 67 (Kar) (supra)." (p. 328);