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[2007] 291 ITR 212 (UTTARAKHAND) HIGH COURT OF UTTARAKHAND Commissioner of Income-tax v. Dehradun Tea Co. P.C. VERMA AND B.C. KANDPAL, JJ. IT APPEAL NO. 118 OF 2003 FEBRUARY 23, 2007 Section 5 of the Income-tax Act, 1961 - Income - Accrual of â–  Where Appellate Tribunal found that grant of additional compensation and interest thereon had not become final and was subjudice in High Court, interest accrued and paid to assessee on additional compensation was not taxable on accrual basis [Assessment years 1984-85 to 1991-92] Where the Appellate Tribunal found that the grant of additional compensation and interest thereon had not become final and was subjudice in the High Court : Held that no substantial question of law arose from the Tribunal's order holding that interest accrued and paid to the assessee on additional compensation, was not taxable on accrual basis. JUDGMENT 1. This appeal has been preferred by the Department against the and order dated December 26, 2002, passed by the Income-tax Appellate Tribunal, Delhi Bench "F" Delhi, for the assessment years 1984-85, 1985-86, 1986-87 to 1991-92. The following questions have been framed in the memo of appeal for our determination by learned counsel for the Department : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was legally correct in holding that interest accrued and paid to the assessee on additional compensation is not taxable on accrual basis by overlooking the decision of the Supreme Court in the case of Rama Bai v.CIT [1990] 181 ITR 400 ? 2. The brief facts of the case giving rise to the present appeal are that the notice under section 148 dated February 27, 1995, was issued to the assessee which was served on February 29, 1995, after seeking necessary approval from the Commissioner of Income-tax, Meerut. In response to the said notice the assessee filed a return on January 31, 1997, at nil income. The assessee was holding plots of land at Dehradun. The plots were acquired by the Collector and compensation was paid to the assessee. The Assessing Officer made reassessment. The assessee filed appeals before the Commissioner of Income-tax (Appeals) for…

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