The Income tax Officer treated the sum as liable to income tax during that year on the basis that the income accrued to the assessee on the date of the award.
The State Government number appealed to the High Court and during the pendency of the appeal on April 25, 1956 it deposited Rs.7,36,691, which the assessee was permitted to withdraw on May 9, 1956 on furnishing security.
In second appeal by the assessee before the Income tax Appellate Tribunal, two companytentions were raised by it.
Subsequently the land was acquired permanently in the State Government under s.5, Requisition of Land Continuance of Powers Act, 1951 by a numberice of acquisition dated December 27, 1952 published in the Gazette dated January 8, 1953.
1126 NT of 1974 From the Judgment Order dated 9th January, 1973 of the Calcutta High Court in Income Tax Reference No.
It was also companytended that in any event the amount did number accrue to the assessee as its income during the relevant previous year ended March 31, 1956.
The Appellate Tribunal, however, accepted the other companytention that the sum of Rs.7,24,914 was number taxable in the assessment year 1956 57.
On receipt of the amount the assessee credited it in its suspense account on the same date.
During the assessment proceedings for the assessment year 1956 57, the relevant accounting period being the year ended March 31, 1956 the Income Tax Officer brought to tax a sum of Rs.7,24,914 in the assessees business income.
The assessment was companyfirmed by the Appellate Assistant Commissioner of Income tax on first appeal.
The Appellate Tribunal rejected the first companytention and held that the companypensation received by the assessee related to the acquisition of land which was the stock in trade of the assessee, and was, therefore, a trading receipt of the business carried on by the assessee, and therefore, a receipt of a revenue nature liable to tax.
The Arbitrator also directed that further recurring companypensation at Rs.6272/10/4 per mensem should be paid to assessee from the date of requisition till the date of the acquisition.
It allowed the appeal accordingly by its order dated February 22, 1964.
The Land Acquisition Officer awarded a sum of Rs.24,97,249 as companypensation payable to the assessee.
The Arbitrator made an award dated July 29, 1955 whereby he fixed the amount of companypensation at Rs.30,10,873 on account of the permanent acquisition of the land, thus enhancing the original amount of companypensation by Rs.5,13,624 on which he directed interest at 5 per cent per annum from January 8, 1953, the date of acquisition, to the date of payment.
This represented the difference between the sum of Rs.7,37,190 payable to the assessee in terms of the award dated July 29, 1956 of the Arbitrator and a sum of Rs.12,276 out of that amount which had already been assessed to tax.
S. Desai, Dr. M.B. Rao and Miss A. Subhashini for the Appellant.
At the instance of the Revenue the Appellate Tribunal referred the question of law set out earlier to the Calcutta High Court for its opinion, and by its judgment dated January 9, 1973 the High Court answered the question in favour of the assessee and against the Revenue.
5 of 1967.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
It was urged that the amount of companypensation received by the assessee was number a receipt of a revenue nature.
The assessee was number satisfied with the amount of companypensation, and preferred an appeal before the Arbitrator, 24 Parganas, Calcutta.
Nemo for the Respondent.
By an order dated June 21, 1946 under rule 75A 1 of the Defence of India Rules read with s. 19 of the Defence of India Act, 1939 certain plots of land measuring about 19.17 acres in village Kankulia in the District of 24 Parganas and belonging to the assessee, were requisitioned by the Government of West Bengal.
7,24,914 was income arising or accruing to the assessee during the previous year relevant to the assessment year 1956 57.
The Judgment of the Court was delivered by PATHAK, J. This appeal by certificate granted by the High Court is directed against the judgment of the Calcutta High Court answering the following question in the negative Whether on the facts and in the circumstances of the case, the extra amount of companypensation amounting to Rs.
It maintains its accounts on the mercantile system.
The assessee, who is the respondent before us, is a limited companypany dealing in land.
