Law:

Section:

Section 5 of the Income-tax Act, 1961 - Income - Accrual of - Assessment year 1982-83 - Income-tax Officer assessed entire interest received by assessee on additional compensation for acquisition of lands belonging to assessee as co-owner in 1966 in assessment year on question - Whether interest due for assessment year in question alone should be assessed in that assessment year - Held, yes CASES REFERRED TO CIT v. T.N.K. Govindarajulu Chetty [1987] 165 ITR 231 (SC) [Para 4], Smt. Rama Bai v. CIT [1990] 181 ITR 400/[1991] 54 Taxman 496 (SC) [Para 5] and K.S. Krishna Rao v. CIT [1990] 181 ITR 408/[1991] 54 Taxman 339 (SC) [Para 5]. T. Ravikumar for the Applicant. JUDGMENT N.V. Balasubramanian, J. - In pursuance of the directions of this court, the Income-tax Appellate Tribunal has stated a case and referred the following question of law for our consideration : "1. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law and had valid materials to hold that the interest amount received by the assessee in respect of additional compensation awarded by court, should be assessed on accrual basis only, and, accordingly, the interest due for the year alone should be assessed for the assessment year 1982-83 ?" 2. The assessee is an individual. Certain lands belonging to the assessee as co-owner along with his brothers were acquired by the Government of Tamil Nadu in 1966. The assessee received additional compensation in the year 1981 and also the interest on the compensation. The Income-tax Officer was of the view that the entire interest received in the previous year relevant to the assessment year 1982-83 must be assessed and, accordingly, assessed the entire interest amount of Rs. 1,08,755 in the assessment year 1982-83. 3. The Commissioner of Income-tax (Appeals) did not agree with the views of the Income-tax Officer and directed the Income-tax Officer to compute the income attributable to the previous year only and restricted the amount of interest taxable for that assessment year. As against the order of the Commissioner of Income-tax (Appeals), the Revenue carried the matter in appeal before the Tribunal. 4. The…

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