| Case ID |
d837c589-a5a7-46ed-a920-66a45a856154 |
| Body |
View case body. Login to View |
| Case Number |
Civil Appeal Nos. 4401 TO 4420, 4422 TO 4426 OF 20 |
| Decision Date |
Jul 16, 2009 |
| Hearing Date |
|
| Decision |
The Supreme Court ruled that even if enhanced compensation is received during the pendency of an appeal, it is liable to be taxed in the year of receipt under section 45(5) of the Income-tax Act, 1961. The court emphasized that capital gains are deemed income and arise at the time of transfer. It concluded that additional compensation under sections 23(1A) and 23(2) of the Land Acquisition Act, along with interest under section 28, forms part of the enhanced compensation and is taxable in the year it is received. The decision clarifies the tax implications of compensation received in stages and reaffirms the legislative intent behind the amendments to the Income-tax Act. |
| Summary |
The case revolves around the taxation of enhanced compensation received by the assessee during the previous year relevant to the assessment year 1999-2000. It addresses the complexities involved in determining the year of taxability for capital gains arising from compulsory acquisition of land. The Supreme Court's ruling clarifies that all components of enhanced compensation, including additional amounts and interest, are taxable in the year of receipt, irrespective of ongoing litigation. This landmark decision has significant implications for taxpayers involved in land acquisition cases, ensuring clarity on the treatment of capital gains and reinforcing the need for accurate reporting of income. The ruling also highlights the importance of understanding the provisions of the Income-tax Act and the Land Acquisition Act, particularly sections relating to capital gains, compensation, and interest. Keywords such as 'capital gains tax', 'enhanced compensation', 'income tax', and 'land acquisition' are crucial for SEO optimization, reflecting trending topics in tax law and real estate. |
| Court |
Supreme Court of India
|
| Entities Involved |
Not available
|
| Judges |
S.H. Kapadia,
Aftab Alam
|
| Lawyers |
Not available
|
| Petitioners |
Commissioner of Income Tax, Faridabad
|
| Respondents |
Ghanshyam (HUF)
|
| Citations |
2009 SLD 2955,
(2009) 315 ITR 1
|
| Other Citations |
CIT v. Hindustan Housing & Land Development Trust Ltd. [1986] 161 ITR 524,
Asstt. Commissioner, Gadag Sub-Division v. Mathapathi Basavannewwa AIR 1995 SC 2492,
State of Tamil Nadu v. L. Krishnan AIR 1996 SC 497,
Ram Chand v. Union of India [1994] 1 SCC 44,
Shree Vijay Cotton & Oil Mills Ltd. v. State of Gujarat [1991] 1 SCC 262,
Sunder v. Union of India [2001] 7 SCC 211
|
| Laws Involved |
Income-tax Act, 1961,
Land Acquisition Act, 1894
|
| Sections |
45,
155,
23,
28,
34
|