ITA No. 232 of 2005 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 232 of 2005 Date of Decision: 23.11.2010 The Commissioner of Income Tax ....Appellant. Versus Sh. Bharat Lal Dagar (HUF) ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. AJAY KUMAR MITTAL, J. 1. This order shall dispose of ITA Nos. 321 of 2004, 232, 358, 571 of 2005 and 233 to 237, 247, 248, 415, 416, 536, 541, 548 of 2006 as learned counsel for the appellant submitted that similar questions of law are involved therein. For brevity, the facts are being taken from ITA No. 232 of 2005. 2. ITA No.232 of 2005 has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 against the order dated 27.8.2004 passed by the Income Tax Appellate Tribunal, Delhi Bench “F”, New Delhi in ITA No. 475/Del/01 & CO No. 63/Del/104, for the assessment year 1998-99. 3. According to the learned counsel for the revenue, the appeal raises the following substantial question of law:- “Whether the ITAT is right in law in confirming the order passed by the CIT(A) and holding that the ITA No. 232 of 2005 -2- amount of enhanced compensation and the interest received thereon, even though actually received by the assessee should not be brought to tax since the dispute about the quantum is pending before higher court and the amount has been released on furnishing of security?” 4. The facts necessary for adjudicating the present controversy as pleaded in the appeal are that the assessee received enhanced compensation of the land acquired by the Haryana Urban Development Authority and also interest accrued thereon during the assessment year 1998-99 but in the return filed by him, the assessee did not offer the amount of enhanced compensation and interest on the ground that in view of the judgment passed by the Hon'ble Supreme Court in CIT v. Hindustan Housing and Land Development Trust Ltd., 161 ITR 524 (SC), the amount of enhanced compensation and interest received had not accrued to the assessee during the year of receipt as the entire amount was in dispute in appeal filed by the State before the High Court. The Assessing Officer did not accept the plea of the assessee and brought the amount of enhanced compensation and interest received by the assessee during the year to tax. Against the order of the Assessing Officer, the assessee approached the Commissioner of Income Tax (Appeals) [in short “the CIT(A)”]. The CIT (A) held the income of enhanced compensation and interest as “capital gains” to be charged in the year of receipt. The percentage of capital gains arising out of payments received by the assessee against furnishing the security was not to be treated as income for the year, but ITA No. 232 of 2005 -3- the remaining amount, if any, not covered by security, was to be treated as income for the year and charged to tax under the head “Capital Gains”. The CIT(A) further directed to allow deduction under Sections 54B and 54F of the Income Tax Act, 1961 (in short “the Act”) from the date of actual receipt of enhanced compensation. Feeling aggrieved, the revenue filed an appeal before Income Tax Appellate Tribunal, Delhi Bench “F”, New Delhi (hereinafter referred to “the Tribunal”). The assessee filed cross-objections. The Tribunal allowed the cross- objection of the assessee and quashed the order of the CIT(A) to the extent of order relating to taxability of the amount of enhanced compensation and interest thereon which had been withdrawn without furnishing security and dismissed the appeal of the revenue. Hence, the present appeal by the revenue. 5. We have heard learned counsel for the appellant. 6. The point that arises in this appeal is whether the enhanced compensation and interest received thereon is taxable in the hands of the assessee in the year of receipt. 7. The similar issue came up for consideration before this Court in ITA No. 209 of 2004 (The Commissioner of Income Tax, Faridabad v. Bir Singh (HUF) Ballabgarh) decided on 27.10.2010, wherein it was concluded as under:- “(a) that 'income from Business or profession' and 'income from other sources' are ascertain on the basis of system of accountancy followed by the assessee; (b) where assessee is not maintaining books of accounts ITA No. 232 of 2005 -4- by adopting any specific method, it shall be treated to be cash system of accountancy; (c) the interest under Section 34 to be awarded by the Collector partakes the characters of compensation and is taxable in the year of receipt in view of Section 45(5)(b) of the Act; and (d) under cash system of accountancy, the element of interest awarded by the Court received on enhanced amount of compensation under Section 28 of the 1894 Act falls for taxation under Section 56 as 'income from other sources' in the year of receipt.” 8. Further, the Apex Court in Commissioner of Income-tax v. Ghanshyam (HUF), [2009] 315 ITR 1 (SC) had held that the amount of enhanced compensation received by the assessee would be taxable in the year of receipt in view of insertion of Section 45(5)(b) of the Act irrespective of whether any litigation is pending at the behest of the State in any court of law. 9. In view of the above, the appeals are allowed and the issues arising therein are answered accordingly. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -5- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 321 of 2004 Date of Decision: 23.11.2010 The Commissioner of Income Tax ....Appellant. Versus Sh. Sultan Singh ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -6- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 358 of 2005 Date of Decision: 23.11.2010 The Commissioner of Income Tax ....Appellant. Versus Sh. Shiv Ram (HUF) ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -7- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 415 of 2006 Date of Decision: 23.11.2010 The Commissioner of Income Tax ....Appellant. Versus Sh. Bhoop Lal ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -8- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 416 of 2006 Date of Decision: 23.11.2010 The Chief Commissioner of Income Tax ....Appellant. Versus Shri Shyam Lal ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -9- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 541 of 2006 Date of Decision: 23.11.2010 The Commissioner of Income Tax ....Appellant. Versus Sh. Daya Ram (HUF) ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -10- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 548 of 2006 Date of Decision: 23.11.2010 The Commissioner of Income Tax ....Appellant. Versus Sh. Jeevan Singh ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -11- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 234 of 2006 Date of Decision: 23.11.2010 The Commissioner of Income Tax, Karnal ....Appellant. Versus Sh. Bhim Singh Lathar ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Yogesh Putney, Advocate for the appellant. Mr. Pankaj Jain, Advocate for the respondent. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -12- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 235 of 2006 Date of Decision: 23.11.2010 The Commissioner of Income Tax, Karnal ....Appellant. Versus Sh. Bhim Singh Lathar ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Yogesh Putney, Advocate for the appellant. Mr. Pankaj Jain, Advocate for the respondent. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -13- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 236 of 2006 Date of Decision: 23.11.2010 The Commissioner of Income Tax, Karnal ....Appellant. Versus Sh. Bhim Singh Lathar ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Yogesh Putney, Advocate for the appellant. Mr. Pankaj Jain, Advocate for the respondent. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -14- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 237 of 2006 Date of Decision: 23.11.2010 The Commissioner of Income Tax, Karnal ....Appellant. Versus Sh. Bhim Singh Lathar ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Yogesh Putney, Advocate for the appellant. Mr. Pankaj Jain, Advocate for the respondent. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -15- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 536 of 2006 Date of Decision: 23.11.2010 The Commissioner of Income Tax, Faridabad ....Appellant. Versus Sh. Chet Ram, HUF ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Yogesh Putney, Advocate for the appellant. Mr. Pankaj Jain, Advocate for the respondent. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -16- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 233 of 2006 Date of Decision: 23.11.2010 The Commissioner of Income Tax, Karnal ....Appellant. Versus Sh. Bhim Singh Lathar ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Mr. Yogesh Putney, Advocate for the appellant. Mr. Pankaj Jain, Advocate for the respondent. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -17- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 571 of 2005 Date of Decision: 23.11.2010 The Commissioner of Income Tax, Faridabad ....Appellant. Versus Sh. Dhanpat Rai ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvash Dhugga, Advocate for the appellant. Mr. Akshay Bhan, Advocate for the respondent. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -18- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 247 of 2006 Date of Decision: 23.11.2010 Commissioner of Income Tax, Faridabad ....Appellant. Versus Smt. Veermati ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Uvashi Dhugga, Advocate for the appellant. Mr. Avneesh Jhingan, Advocate for the respondent. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE ITA No. 232 of 2005 -19- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 248 of 2006 Date of Decision: 23.11.2010 Commissioner of Income Tax, Faridabad ....Appellant. Versus Sh. Lalit Kumar ...Respondent. CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL. HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. PRESENT: Ms. Urvashi Dhugga, Advocate for the appellant. None for the respondent. AJAY KUMAR MITTAL, J. The appeal is allowed. For reasons, see the order of even date recorded in ITA No. 232 of 2005 [The Commissioner of Income Tax v. Sh. Bharat Lal Dagar (HUF)]. (AJAY KUMAR MITTAL) JUDGE November 23, 2010 (ADARSH KUMAR GOEL) gbs JUDGE