TARUN KANTI ROY,KOLKATA vs. ITO, WD-2(4), BURDWAN, BURDWAN

There is a delay of 311 days in filing of the appeal. The assessee submitted a petition for condonation of delay, which is supported by copies of medical certificates issued by the doctors as well as an affidavit. The assessee pleaded that the delay be condoned and the appeal of the assessee be allowed. The learned Departmental Representative opposed the same on the ground that the assessee has not explained each day of the delay as required under law.

After hearing rival contentions, I am of the view that this is a fit case for condonation of delay. The assessee had produced sufficient evidence to demonstrate that he was wholly prevented by sufficient cause for some period from filing the appeal within the period of limitation. Though there are certain gaps in the explanation, I am of the considered opinion that in the larger interest of justice the

We now take up the matter on merits. The assessee is an individual and derives income from business. The issue before me is taxability of enhanced compensation granted by the Hon’ble high court from L & LR Department, Govt. Of West Bengal as well as taxability of interest thereon for acquisition of land. The assessee had initially received compensation of an amount of Rs.28,80,307/- towards land acquisition in the year 1988. When the matter was carried in appeal before the Hon’ble high court, the compensation was enhanced and the assessee received Rs.4,16,516/- as the 1/4th co- owner on 21.06.2005 relevant to A.Y.2005-06. He also received interest from the period 21.06.1988 to 20.07.2005 amounting to Rs.10,54,827/-. The ld. CIT(A) confirmed the action of the AO. Aggrieved the assessee is in appeal before me.

Though the assessee has raised six grounds of appeal challenging both the reopening of assessments, as well as assessment of income under the head ‘capital gains’ and under the head ‘other sources ‘ , during the course of appellate proceedings the ld. Counsel for the assessee did not press ground no.1 to 4,5 and 6. He has only pressed ground no.3 which reads as follows :- “3. For that the Ld. Assessing Officer erred in adding Rs.416,516/- u/s 45(5) of the I.T.Act, 1961 with the total income of the assessee.”

In my view the judgement of the Hon’ble Supreme Court in the case of M/s Rama Bai vs CIT, is binding and hence accordingly the interest income earned should

Respectfully following this judgment of the Hon’ble Supreme Court I direct the AO to compute only that interest on accrual basis in the impugned assessment year. If the interest accrued during the impugned assessment year is Rs.62,048/- as claimed by the assessee, the addition should be restricted to this count only. The balance is deleted.

In the result the appeal of the assessee is allowed in part.