Dismissed

The Commissioner of Income Tax -Ii Nashik v. Komalsingh Ramu Patil

Bombay HC23 Mar 2015TA/53/2005

Case brief

AI extract

What is this about?

High Court at Aurangabad held that while interest on enhanced land acquisition compensation is taxable, it was not taxable in this case because the Tribunal correctly applied the principle of spreading the income over the payment period (1978-1991), bringing it below taxable limits.

What did the court decide?

Appeals filed by the Revenue Commissioner of Income Tax were dismissed; the Tribunal's order was upheld.

The Commissioner of Income Tax -Ii Nashik Vs Komalsingh Ramu Patil — Income Tax | Bombay HC (2015)

¶1

ta51.05

¶2

¶3

IN THE HIGH COURT OF JUDICATURE AT BOMBAY

¶4

BENCH AT AURANGABAD

¶5

TAX APPEAL NO.51 OF 2005

¶6

The Commissioner of Income Tax-II,
Kendriya Rajashwa Bhavan, Gadkari
Chowk, Old Agra Road, Nashik-422002

¶7

...APPELLANT

¶8

 VERSUS

¶9

Komalsingh s/o Ramu Patil,
R/o & Post at-Khadegaon,
Tq-Pachora, Dist-Jalgaon

¶10

...RESPONDENT

¶11

 WITH

¶12

 TAX APPEAL NO.52 OF 2005

¶13

The Commissioner of Income Tax-II,
Kendriya Rajashwa Bhavan, Gadkari
Chowk, Old Agra Road, Nashik-422002

¶14

...APPELLANT

¶15

 VERSUS

¶16

Komalsingh s/o Ramu Patil,
R/o & Post at-Khadegaon,
Tq-Pachora, Dist-Jalgaon

¶17

...RESPONDENT

¶18

 WITH

¶19

 TAX APPEAL NO.53 OF 2005

¶20

The Commissioner of Income Tax-II,
Kendriya Rajashwa Bhavan, Gadkari
Chowk, Old Agra Road, Nashik-422002

¶21

...APPELLANT

¶22

ta51.05

¶23

¶24

VERSUS

¶25

Komalsingh s/o Ramu Patil,
R/o & Post at-Khadegaon,
Tq-Pachora, Dist-Jalgaon

¶26

...RESPONDENT

¶27

 WITH

¶28

 TAX APPEAL NO.54 OF 2005

¶29

The Commissioner of Income Tax-II,
Kendriya Rajashwa Bhavan, Gadkari
Chowk, Old Agra Road, Nashik-422002

¶30

...APPELLANT

¶31

 VERSUS

¶32

Komalsingh s/o Ramu Patil,
R/o & Post at-Khadegaon,
Tq-Pachora, Dist-Jalgaon

¶33

...RESPONDENT

¶34

...

¶35

 Mr.Alok Sharma, Standing Counsel for Appellant.
 Mr.P.R. Katneshwarkar Advocate for Respondent.

¶36

...

¶37

CORAM: S.V. GANGAPURWALA AND
 A.I.S. CHEEMA, JJ.

¶38

 DATE : 23RD MARCH, 2015

¶39

ORDER :

¶40

1.Mr. Sharma, learned counsel for Appellant

¶41

strenuously contends that interest on enhanced

¶42

amount of compensation is a receipt and is

¶43

ta51.05

¶44

¶45

taxable. The Tribunal committed an error in
disallowing the said contention of the Department.
The learned counsel relies on the Judgment of the
Apex Court in the case of Bikram Singh vs. Land
Acquisition Collector, reported in 1996-EQ(S.C.)-
0-1408 and another Judgment of the Apex Court in
the case of Sham Lal Narula vs. Commissioner of
Income Tax, Punjab, Jammu and Kashmir, Himachal
Pradesh and Patiala, reported in 1964-EQ(S.C.)-0-
125.

¶46

2.Mr. Katneshwarkar, learned counsel for

¶47

Respondent submits that the Tribunal has not held
that the interest amount received on compensation
is not susceptible to income tax, however it has
held that the compensation amount is for the year
1978 to 1991 and after spreading over the said
amount and also considering that it was a case of

¶48

larger HUF, interest on enhanced amount of
compensation does not come within the ambit of
taxable income.

¶49

ta51.05

¶50

¶51

3. We have considered submissions of the

¶52

respective parties. The Apex Court in a case of
Bikram Singh, referred supra, has held that
interest on enhanced amount of compensation is a
revenue receipt and is taxable. However, the Apex
Court has also held that the assessee is entitled
to spread over the income for the period in
respect of payment to be made. Here period is from
1978 to 1991. The Authorities have considered the
said aspect. The Income Tax Officer, on
consideration of the same, has held that after
spreading over the said income of interest on the
amount of compensation pursuant to the land
acquired under the provisions of Land Acquisition
Act would not come within the purview of taxable
income. Though he has held that such an interest
is taxable, however, considering factual aspect of
the matter, said amount would not come within the
ambit of tax and had negatived the claim of the
present Appellant.

¶53

ta51.05

¶54

¶55

4.The Commissioner of Income Tax had

¶56

allowed the Appeal filed by the Department and
thereafter the Tribunal has allowed the Appeal
filed by the assessee. The interest amount
received on account of enhanced compensation
pursuant to the acquisition of land under the
provisions of the Land Acquisition Act is taxable.
However, the assessee is entitled to spread over
the said income for the period in respect of
payment to be made. In the present case after
spreading over the interest amount the same comes

¶57

below taxable limit as held by Tribunal.
Considering the said aspect, no error has been
committed by the Tribunal while passing the
impugned order.

¶58

5. In light of above, all the Appeals are

¶59

dismissed. However, there is no order as to costs.

¶60

[A.I.S.CHEEMA,J.] [S.V.GANGAPURWALA,J.]
asb/MAR15

The Commissioner of Income Tax -Ii Nashik v. Komalsingh Ramu Patil

Case brief

What is this about?

What did the court decide?

The Commissioner of Income Tax -Ii Nashik v. Komalsingh Ramu Patil

Case brief

What is this about?

What did the court decide?

What the court decided

A compact analysis

Issues for consideration

Cases cited

Parties & counsel

Coram

Case details

Similar cases

Mankarnabai Gajrajui Somvanshi Vs the State of Mah and Ors.

Sanjay Harishankar Parasher Vs the State of Mah. an Ors.

Rajaram Shankar Dolas Vs the Executvie Engineer, PWD Division, Ahmednagar

Inderlal Tulsomal Kamora Gpa Vijay Narayandas Rizwani Vs the State of Maharashtra and Ors.

Shahaji Sambhaji Patil Umrikar Vs the State of Maharashtra and Ors.

Inderlal Tulsomal Kamora Vs the State of Maharashtra and Ors.