IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN TUESDAY, THE 10TH JUNE, 2008 / 20TH JYAISHTA, 1930 ITR.No. 6 of 2002 (AGAINST THE ORDER IN RA.201/COCH/1996 IN ITA.562/COCH/1994 of I.T.A.TRIBUNAL,COCHIN BENCH, COCHIN) .................... APPLICANT: -------------- THE COMMISSIONER OF INCOME TAX, COCHIN. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL,GOI(TAXES) SRI.GEORGE K. GEORGE, SC FOR IT RESPONDENT: ----------------- M.A.BABU, MANADATH HOUSE, ALUVA. BY ADV. SRI.K.GOPALAKRISHNA KURUP FOR R THIS TAX REFERENCE HAVING BEEN FINALLY HEARD ON 10/06/2008, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR & V.K.MOHANAN, JJ. --------------------------------------------- I.T.R.Nos.6 to 8 of 2002 --------------------------------------------- Dated this the 10th day of June, 2008 J U D G M E N T Ramachandran Nair,J: We have heard the Senior Counsel appearing for the applicant-Revenue Sri.P.K.R.Menon and counsel appearing for the respondent. 2. The common question raised for consideration is whether interest income received along with compensation for acquisition of land is to be assessed as income “from other sources” or income from capital gains. The interest received by the assessee is from the date of dispossession till the date of award. The assessee's case is that the interest is in the nature of compensation and hence not assessable as revenue receipt under income “from other sources”. 3. We find that the Tribunal has decided the case in favour of the assessee following the decision of this Court reported in C.I.T. v. Periyar and Pareekanni Rubbers Ltd. ((1973) 87 ITR 666). Even though learned I.T.R.Nos.6 to 8 of 2002 :-2-: counsel for revenue cited two decisions of the Supreme Court reported in Dr.Shamlal Narula v. Commissioner of Income Tax, Punjab, Jammu and Kashmir, Himachal Pradesh and Patiala (1964) 53 I.T.R. 151 and T.N.K.Govindaraju Chetty v. Commissioner of Income-Tax, Madras (1967) 66 I.T.R. 465, we find that the decision rendered by a Division Bench of this Court and relied on by the Tribunal is on the same facts. 4. We therefore follow the decision of the Division Bench of this Court referred above and dispose of the reference by answering the question referred in favour of the assessee and against the Revenue. C.N.RAMACHANDRAN NAIR, Judge V.K.MOHANAN, Judge MBS/ I.T.R.Nos.6 to 8 of 2002 :-3-: C.N.RAMACHANDRAN NAIR & V.K.MOHANAN, JJ. -------------------------------------------- I.T.R.Nos.6 to 8 OF 2002 -------------------------------------------- J U D G M E N T DATED:10-6-2008 I.T.R.Nos.6 to 8 of 2002 :-4-: