Director Of Income Tax ... vs Goyal Charitable Trust
1995 Latest Caselaw 235 Del

JUDGMENT

M.K. Sharma,J.

(1) This reference application under Section 256(2) of the Income Tax Act has been filed by the Revenue praying for a direction requiring the Tribunal to draw up a statement of the case and refer the following question said to be a question of law arising out of the combined order of the Tribunal in I.T.A. No. 1874 and 2898/1987 relevant to the assessment years 1983-84 and 1984-85:- "Whether on the facts and in the circumstances of the case, the Hon'ble It at was 'justified in dismissing the departmental appeal and holding that the interest accrued on compensation could be assessable only after-the enhanced compensation had been finally determined with the interest earned by the assessee during the year under consideration had nothing to do with the compensation/ enhanced compensation?"

(2) Briefly staled, the facts of the case are that the assessee is a Trust which came into existence under a Deed of Trust dated 1.9.1973. Shri Om Prakash Goel and Shri Hari Shankar Goel who were brothers owned certain lands which were acquired by the Government of Madhya Pradesh under the Land Acquisition Act and compensation was awarded by the Land Acquisition Collector. The compensation awarded by the Land Acquisition Collector was considered to be inadequate by the owners of the land and accordingly a reference being sought for was made to the First Additional Judge, Gwalior for the enhancement of the compensation. The Additional Judge enhanced the compensation against which an appeal was filed by the Stale Government before the High Court of Madhya Pradesh. In the said appeal, it appears that there was a difference of opinion between the two learned Judges hearing the appeal regarding the Fixation of the quantum of compensation and the matter was referred to a third Judge for final decision.

(3) The assessee Trust was made a party to the proceedings before the 'High Court in the appeal and the trust was allowed to withdraw the enhanced compensation deposited in the court by furnishing a bank guarantee for the amount of compensation and future interest. In the previous year relevant to the assessment year 1983-84, the assessee trust received an amount of Rs.6,53,614.00 by way of interest on the compensation and the said amount was' shown by the assessee as a liability in the balance sheet. Similarly for the assessment year 1984-85 a sum of Rs. 38,913.00 was withdrawn by way oi interest and this amount was also show as liability. Although none of the aforesaid amounts was shown as income in the respective assessment years by the assessee the Income Tax Officer while passing the orders of assessment held that the interest income of the assessee was income of the assessee trust and brought the same to lax in the respective assessment years. The assessee being aggrieved thereby filed an appeal before the Commissioner of Income Tax (Appeals), who after considering the submissions made by the respective parties held that the interest on the compensation amount could not be brought to tax and accordingly deleted the addition made by the Income Tax Officer. Appeal having been Filed there from by the Revenue the Income Tax Appellate Tribunal upheld the decision and the view taken by the Cit (Appeals). Thereafter an application under Section 256(1) of the Income Tax Act having been filed by the Revenue for requiring the Tribunal to draw up a statement of case and refer the aforesaid question to this court for its opinion, the Tribunal dismissed the said application holding that no referable question of law arose out of the order of the Tribunal.

(4) We have heard the learned counsel for the Revenue as also for the assessee. Our attention has been drawn to a decision of the Apex Court in the case of Commissioner of Income Tax, West Bengal Ii Vs. Hindustan Housing Land Development Trust Limited; reported in 161 Itr 524 and a decision of this court in Harish Chandra and Others Vs. Commissioner of Income Tax; reported in 154 Itr 457. On perusal of the orders passed by the learned Tribunal we find that the learned Tribunal came to the conclusion that no referable question of law arose out of the order of the learned Tribunal in view of the fact that the answer to the aforesaid question has already been finally concluded by the decision of the Apex Court- (Supra.) which only was applied by the Tribunal in deciding the appeal.

(5) The learned counsel for the Revenue submitted before us that what has been held in the aforesaid two decisions of the Apex Court and this Court is with regard to compensation for acquisition and not the interest. According to him as there is no conclusive decision of any court with regard to the question of interest earned by the assessee during the year under consideration the question of law does arise out of the question sought to be referred.

(6) We have given our anxious consideration to the submissions made by the counsel for the parties. On consideration of the record we Find that the assessee trust was allowed to withdraw the enhanced compensation deposited in court by furnishing a - bank guarantee for the amount of compensation as also for the future interest which is the subject matter in the present case. In view of the aforesaid fact, we arc of the opinion that the right to receive the future interest as also the enhanced compensation by the assessee is still unsettled inasmuch as the assessee has been directed to withdraw the future interest also Along with the enhanced compensation on furnishing security for restitution. Accordingly, the withdrawal of the interest portion by the assessee is contingent inasmuch as there is a possibility of the said amount to be returned by the assessee in the event of the acceptance of the appeal of the Government.

(7) It is thus apparent that the principles laid down by the Apex Court and by this Court (supra.) are also applicable to the facts and circumstances of the present case. In view of the same the answer to the proposed question appears to be academic and self-evident and no useful purpose would be served, in our opinion, in calling for a reference on the aforesaid question. Accordingly, this petition has no merit and is dismissed. No costs.