C I T vs. SUKH RAM DAGAR

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ITA/177/2008HC Punjab & HaryanaPHHC01080143200812 May 2008Author: MR. JUSTICE RAJIVE BHALLA,MR JUSTICE RAKESH KUMAR GARG2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court dismissed the appeal filed by the Revenue. The Court noted that after hearing arguments for some time, the counsel for the appellant (Revenue) was unable to distinguish the view taken by the High Court in a previous judgment, ITA No.490 of 2007 titled The Commissioner of Income Tax, Faridabad v. Shri Hardwari Lal, decided on March 26, 2007. The counsel fairly conceded that the question of law framed in the present appeal was squarely covered against the Revenue by the aforesaid judgment. Therefore, in view of this concession, the appeal was dismissed. The specific issue of whether interest on enhanced compensation is taxable on accrual basis irrespective of pending appeals was thus decided against the Revenue based on precedent.

What were the facts?

The Revenue, Commissioner of Income Tax-Faridabad, filed an appeal under Section 260A of the Income-tax Act, 1961, against an order dated January 31, 2007, passed by the Income-Tax Appellate Tribunal (ITAT), Delhi Bench 'H'. The appeal pertains to assessment year 1999-2000 and concerns the ITAT's decision in ITA No.2565/Del/2003. The Revenue sought to challenge the ITAT's holding that the assessment of interest could not be made until the matter was finally settled by the High Court. The appeal was filed with a delay of 65 days, for which a condonation application was also filed.

What were the issues?

1. Whether, on the facts and circumstances of the case, the Hon'ble ITAT is right in holding that assessment of interest cannot be made until the matter is finally settled by the High Court, in contradiction with the judgment of the Hon'ble jurisdictional High Court of Punjab & Haryana following the judgment of the Apex Court in the case of CIT v. Rama Bai, 181 ITR 400, whereby interest on enhanced compensation is to be taxed on accrual basis irrespective of the pendency of appeal in higher courts in respect of enhanced compensation. Contentions: Assessee: No arguments recorded for the assessee. Revenue: The Revenue argued that the ITAT's decision was contrary to the jurisdictional High Court's judgment, which followed the Apex Court's ruling in CIT v. Rama Bai, holding that interest on enhanced compensation is taxable on accrual basis even during the pendency of appeals.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CM No.2669-CII of 2008 and Date of decision: 12.5.2008 The Commissioner of Income Tax-Faridabad ......Appellant Versus Sh. Sukh Ram Dagar ......Respondent

CORAM:- HON'BLE MR.JUSTICE RAJIVE BHALLA HON'BLE MR.JUSTICE RAKESH KUMAR GARG * * * Present: Mr. Yogesh Putney, Advocate for the appellant-revenue. * * * Rajive Bhalla, J .(Oral) CM No.2669-CII of 2008 Prayer in this application is for condonation of delay of 65 days in re-filling the appeal.

For the reasons mentioned in the application, delay of 65 days in re-filing the appeal is condoned. CM stands disposed of.

The revenue has filed the present appeal under Section 260A of the Income-tax Act, 1961 (hereinafter referred to as the “Act”) against the order dated 31.1.2007 passed by the Income-Tax Appellate Tribunal, Delhi Bench 'H', in ITA No.2565/Del/2003 for the assessment year 1999- 2000 raising the following substantial question of law:- “Whether on the facts and circumstances of the case, the Hon'ble ITAT is right in holding that assessment of interest cannot be made until the matter is finally settled

CM No.2669-CII of 2008 and -2- by the High Court, in contradiction with the judgement of Hon'ble jurisdictional High Court of Punjab & Haryana following the judgement of Apex Court in the case of CIT v. Rama Bai, 181 ITR 400, whereby interest on enhanced compensation is to be taxed on accrual basis irrespective of the pendency of appeal in higher courts in respect of enhanced compensation. [ITA No.176 of 2005 and ITA No.177 of 2005 in the cases of CIT, Faridabad v. Naresh Kumar and CIT, Faridabad v. Dilbagh Singh, respectively].”

After addressing arguments for some time, counsel for the appellant is unable to distinguish the view taken by this Court in ITA No.490 of 2007 titled as The Commissioner of Income Tax, Faridabad v. Shri Hardwari Lal, decided on 26.3.2007 and fairly concedes that the question of law framed herein is squarely covered against the revenue by this opinion recorded in the aforesaid judgement.

In view of what has been stated hereinbefore, the appeal is dismissed.

(RAJIVE BHALLA) JUDGE May 12, 2008

(RAKESH KUMAR GARG) ps

JUDGE

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