Law:

Section:

Section 256, read with section 5, of the Income-tax Act, 1961 - Reference - Question of law - Assessee's plot was acquired in 1959 and compensation was paid during assessment year 1864-65 and was duly assessed in that assessment year Enhanced compensation with interest was awarded in assessment year 1972-73 - Tribunal held that since title of plot was transferred to Government in 1963 and award was passed in 1963, capital gains that arose of such transfer of plot were assessable in assess- ment year 1964-65 and not in 1972-73, and on question of interest, it was held that interest could not be assessed in full in assessment year 1972-73 but it should be spread over the years between date of acquisition and date of actual payment of interest - Whether any referable question of law arose from Tribunal's order -Held, yes Facts The assessee had a plot of land which was acquired by the Government in the year 1959. The Land Acquisition Collector in the year 1963 adjudged the amount of compensation payable to the assessee. The amount was paid to the assessee during the assessment year 1964-65 and the capital gains were assessed in the same assessment year. The assessee felt dissatisfied with the amount of compensation awarded under section 18 of the Land Acquisition Act and asked the Collector to refer the case of compensation to the civil court. The District Judge passed an award under section 26 of the Land Acquisition Act and enhanced the amount of compensation which included the interest on compensation amount. The assessee received the aforesaid enhanced amount of compensation during the assessment year 1972-73. The ITO held that as the enhanced compensation was quantified in the year 1972-73 it was receivable by the assessee as capital gains during the assessment year 1972-73 and not during the assessment year 1964-65. As regards the interest, the ITO held that the entire accumulated interest was also assessable as income of the assessee from other sources during the assessment year 1972-73. The Tribunal held that the legal title in respect of the plot of land in question was transferred to the Government only when the award of the Collector was passed in the…

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