COMMISSIONER OF INCOME TAX ANDHRA PRADESH Vs. V JANARDHAN REDDY

JUDGEMENT

(1.) The question, at the instance of the Revenue, to be answered in this reference is, whether, on the facts and in the circumstances of the case, the interest awarded by the Land Acquisition Officer under s. 34 of the Land Acquisition Act is liable to be assessed for the assessment year 1970-71. This reference concerns 11 respondents, and since identical questions arise, the Commissioner of Income-tax required the Appellate Tribunal to draw up a statement of the case, which will be common to all.

(2.) All the assesses are members of an HUF, which owns certain agricultural lands, which were acquired by the Govt. of Andhra Pradesh by a notification under s. (44) of the Land Acquisition Act, published in the Gazette on 1/12/1966. The possession of the lands was taken in parts on the following dates, i.e., 4/01/1967, January 13, 19 6/08/1968, and Au 31/08/1968. The Land Acquisition Officer passed an award on 29/09/1969, and the compensation was awarded along with interest at the rate of 4 per cent. from the date of possession. The ITO was of the view that the compensation and the interest awarded by the Land Acquisition Officer, having accrued only in the year in which the award was made, i.e., 29/09/1969, the entire interest was assessable in the assessment year 1970-71, whereas the assessees case was that the interest due on compensation awarded accrued from year to year from the date on which possession of the land was taken over by the Government and was taxable in the relevant assessment years. The assessees were successful on appeal before the AAC. The further appeals filed by the Department resulted in dismissal. Hence, this reference.

(3.) The Appellate Tribunal, relying on the decision of the Orissa High Court in Joyanarayan Panigrahi [1974] 93 ITR 102, which dealt with the interest payable under s. 34 of the Land Acquisition Act, held :