- (1.) This is an appeal by the assessee against the order of the learned Commissioner, dated 22-3-1999, passed under section 263 of the Income Tax Act, 1961, for assessment year 1993-94.
(2.) This appeal was barred by limitation by about 20 months. This Bench of the Tribunal vide order dated 14-7-2003 condoned the delay, by following the decisions of the Hon'ble Supreme Court in the cases reported in Collector, Land Acquisition v. Mst. Katiji & Ors. and Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh & Ors. . The registry was directed to fix the appeal in due course of time and now the case has been fixed to be decided on merits.
(3.) The facts of the case in brief are that the assessee filed his return on 29-10-1996 declaring an income of Rs. 23,820. The case was reopened by issuing notice under section 148 dated 31-8-1994. The summon was also issued under section 131 and in compliance of that the assessee appeared in person. The assessing officer made the enquiry from him. The assessee received a sum of Rs. 3.91 lakhs for leaving his rights on the land which he was using for agricultural purposes. The land was purchased by S/Sh. Chetan Parkash, Suresh Chopra, Bali Mohan Singh from S/Sh. Champa Lal, Gobind Dass, Rattan Lal and Chagan Lal. The assessee submitted to the assessing officer that an agreement was made on 12-10-1990 for leaving the possession of the land and the assessee was given a sum of Rs. 3.91 lakhs, out of which his share was 50 per cent. The assessee stated that the compensation was exempt under section 55(2) because this amount was received for leaving the rights in agricultural land. It was also stated that the amount received in lieu of land development could not be considered as income. The assessing officer recorded the statement of the assessee and asked certain searching questions in respect of the compensation of Rs. 3.91 lakhs. The land in question was in possession of the assessee for the last 30 years, The assessing officer after considering the submissions of the assessee and the material on record observed that the assessee was asked about the expenses of Rs. 50,000, which was spent by him for construction of one room and a well and enquired as to whether the evidence had been furnished as regards to the expenses amounting to Rs. 50,000 for levelling of the land and construction of room, etc. on the agricultural land. It was stated before the assessing officer that the assessee was a tenant of the land belonging to S/Sh. Champa Lal, Gobind Dass, Rattan Lal and Chagan Lal and the amount which had been received related to the tenancy rights. As such, the same was not taxable under section 55(2)(a). The reliande was placed on the decisions of the Hon'ble Supreme Court reported in Bawa Shiv Charan Singh v. CIT and CIT v. Panbari Tea Co. Ltd. . The assessing officer after making thorough enquiry came to the conclusion that the amount received by the assessee was capital receipt on which the assessee had not shown the interest income. The assessing officer worked out the interest by applying the rate of 12 per cent and made the addition of Rs. 36,200 to the income declared by the assessee at Rs. 23,700. As such, the income was assessed at Rs. 59,900.;