Law:

Section:

Section 45, read with section 155, of the Income-tax Act, 1961 - Capital gains - Year in which assessable - Assessment years 1994-95 to 1998-99 - Assessee received additional enhanced compensation on basis of award passed by District Judge - However, 50 per cent of that amount was received on furnishing security in terms of interim order passed by appellate authority, till final decision of appeal filed by State challenging award of enhancing additional compensation - Tribunal, taking into consideration provisions of section 45(5)(c) and section 155(16), held that entire amount of additional compensation received by assessee was to be considered for purpose of capital gain in year of its receipt - Whether since clause (c) to section 45(5) and sub-section (16) of section 155 had been inserted with effect from 1-4-2004 and were applicable in relation to assessment year 2004-05 and not prior to that, same could not be given retrospective operation merely on ground that these are declaratory in character - Held, yes - Whether, therefore, section 45(5)(c) was not applicable in instant case - Held, yes - Whether only section 45(5)(b) was applicable in instant case and same is attracted only when assessee receives enhanced compensation in pursuance of a final award/order of a Court, Tribunal or other authority increasing compensation and if any amount is received after stay of award, in pursuance of any interim order as payment subject to final result, it will not be an amount received as enhanced compensation under section 45(5)(b) - Held, yes - Whether therefore, Tribunal was not justified in holding that entire amount of additional compensation received by assessee was to be considered for purpose of capital gain in year of its receipt - Held, yes FACTS The assessee received additional enhanced compensation on basis of award passed by District Judge. However, 50 per cent of amount of the additional enhanced compensation was received on furnishing security in terms of the interim order passed by the appellate authority, till the final decision in the appeal filed by the State challenging the award of enhancing the additional compensation. The Tribunal, taking into…

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