SRI.PADMANARAYANA ASAWA vs. THE DEPUTY COMMISSIONER

IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH DATED THIS THE 15TH DAY OF APRIL, 2019 PRESENT THE HON’BLE MR. JUSTICE G.NARENDAR AND THE HON’BLE MR. JUSTICE BELLUNKE A.S.

I.T.A.NO.100043/2016 BETWEEN : SRI PADMANARAYANA ASAWA SON & LEGAL HEIR OF LATE RAMVALLABH ASAWA AGED 52 YEARS, R/AT. NO.22, NEHRU COLONY, 4TH CROSS, BALLARI-583103. PAN NO.AKIPA2549J

... APPELLANT

(BY SRI M.V.SESHACHALA, SENIOR COUNSEL FOR SRI GANGADHAR J.M., ADVOCATE) AND :

PRAYING TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN ITA NO.1047/BANG/2012 & C.O.NO.202/BANG/2015 DATED 17.01.2014 & 18.11.2015 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER. THIS APPEAL COMING ON FOR FURTHER HEARING THIS DAY, G.NARENDAR J., DELIVERED THE FOLLOWING: J U D G M E N T Heard the learned senior counsel Sri Seshachala along with Sri G.M.Gangadhar learned counsel for the appellant and Sri Y.V.Raviraj, Senior standing counsel for the Revenue in detail. 2. The substantial question of law that arises for consideration is: “Whether the appeal requires to be remanded in the light of the fact that assessments have been made without reference to Section 10(37) and 145A of the Income Tax Act?” 3. The learned counsel for the Revenue would vehemently submit that the arguments now being advanced, by placing a reliance on Sections

145A and 10(37) of the Income Tax Act is not the case that was canvassed before the authorities below and that the new case now being canvassed by the appellant requires to be examined by the Assessing Officer, which is not in dispute that is for the Assessment Year 2006-07. The income by way of interest and the compensation amount were declared on accrual basis. That the law with regard to the method of computation of the income came to be settled by the Hon’ble Apex Court in the case of Commissioner of Income Tax Vs. Ghanshyam [(2009) 315 ITR 1 (SC)], wherein the Hon’ble Apex Court was pleased to lay down the law that the computation of income sought to be made on receipt basis. 4. It is not in dispute that under the amended provision of sub-section 37 of section 10 of the Income Tax Act the income in the case of an assessee, being an individual or a Hindu undivided family, any income chargeable under the head “Capital Gains” arising from the transfer of

agricultural land and such transfer is by way of compulsory acquisition under any law, or a transfer the consideration for which is determined or approved by the Central Government or the Reserve Bank of India and where such income has arisen from the compensation or consideration for such transfer received by such assessee on or after received, such income would not form part of the total income. 5. Learned counsel for the revenue would vehemently contend that the point now raised by the learned Senior Counsel is not a case that has been canvassed before the Assessing Officer and hence the same requires to be appreciated by the Original Authority. 6. During the course of arguments, the learned Senior counsel placed reliance on the provisions of Section 10(37) of the Income Tax Act which undoubtedly came to be inserted vide amendment dated 01.04.2005 and the provision of

Section 145A came to be substituted with effect from 01.04.2010. 7. In that view of the matter, the substantial question of law is answered in the affirmative. 8. Accordingly, the appeal is allowed in part. The order under challenge is set aside. The appeal is remitted back to the competent authority for re-assessment in accordance with law and more particularly with reference to Sections 10(37) and 145A of the Income Tax Act. In that view of the matter, there shall be no order as to costs.

Sd/- JUDGE

Sd/- JUDGE EM/Kmv