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Commissioner of Income-tax Vs. Behari Lal BehargavA. - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtAllahabad
Decided On
Reported in[1942]10ITR388(All)
AppellantCommissioner of Income-tax
RespondentBehari Lal BehargavA.
Excerpt:
- - their lordships further observed that the high court would be justified in refusing a certificate in a case which in its view does not raise any question of sun importance as would warrant a certificate under section 109 (c) of the code of civil procedure, 190. it is well settled that in order to bring a case within the purview of section 109 (c) of the code of civil procedure, the proposed appeal to his majesty in council must raise a substantial question of law of general importance. in the present case we are not satisfied either that the question raised by the proposed appeal is a substantial question of law, or that the question is one of general importance......led to the reference are shortly as follows. certain house property of behari lal bahargave, the opposite party, was acquired by the improvement trust and a certain amount was awarded as compensation to the opposite party by the acquistion officer of the trust. the opposite party being dissatisfied with the award of the acquistion officer, took the matter before the improvement trust tribunal and the tribunal increased the amount of the award and further awarded to the opposite party a sum of rs. 12,708 by way of interest on the increased amount. it appears that after the award by the acquisition officer, the trust had taken possession of the house and accordingly the tribunal held that the opposite party was entitled to a sum of rs. 12,708, by way of interest for the loss of the.....
Judgment:

.

IQBAL AHMAD, C. J.-This is an application for leave to appeal to His Majesty in Council against the decision of a Bench of this Court in a reference under Section 66 (3) of the Indian Income-tax Act. The facts that led to the reference are shortly as follows. Certain house property of Behari Lal Bahargave, the opposite party, was acquired by the Improvement Trust and a certain amount was awarded as compensation to the opposite party by the Acquistion Officer of the Trust. The opposite party being dissatisfied with the award of the Acquistion Officer, took the matter before the Improvement Trust Tribunal and the Tribunal increased the amount of the award and further awarded to the opposite party a sum of Rs. 12,708 by way of interest on the increased amount. It appears that after the award by the Acquisition Officer, the Trust had taken possession of the house and accordingly the Tribunal held that the opposite party was entitled to a sum of Rs. 12,708, by way of interest for the loss of the possession of the house.

The Income-tax Department assessed the opposite party on this sum of Rs. 12,708. The opposite party objected to this assessment and eventually the matter was referred to this Court under Section 66 (3) of the Income-tax Act. A Bench of his Court held that the sum of Rs. 12,708 was awarded to the opposite party by way of damages and was not liable to assessment. In particular, the Bench held that the said amount could not be regarded as an 'income' accruing to the opposite party and therefore was not liable to assessment of income-tax. In this view of the matter the Bench held that the amount of Rs. 12,708 should not be assessed to income-tax. In the concluding portion of its judgment the Bench made the following observations :-

'It is not without considerable doubt and hesitation that we have arrived at this decision, for there is much to be said on the other side; but upon the whole matter we think that this is the correct view to take and we also bear in mind that where the interpretation of a fiscal enactment is open to doubt, it should be construed favorably to the subject.'

The present application for leave to appeal to His Majesty in Council is under Section 66 (A) (2) of the Income-tax Act, which runs as follows :-

'An appeal shall lie to His Majesty in Council from any judgment of the High Court delivered on a reference made under Section 66 in any case which the High Court certifies to be a fit one for appeal to His Majesty in Council.'

This sub-section was considered by their Lordships of the Privy Council in Delhi Cloth and General Mills Company Limited v. Income-tax, Commissioner, Delhi (1927) 54 I. A. 421., and it was held that the right of appeal to under Section 66 of the Income-tax Act, 1922, given by sub-section (2) of Section 66 (A) is only in case which the High Court certifies to be a fit one for such an appeal. Their Lordships further observed that the High Court would be justified in refusing a certificate in a case which in its view does not raise any question of sun importance as would warrant a certificate under Section 109 (c) of the Code of Civil Procedure, 190. It is well settled that in order to bring a case within the purview of Section 109 (c) of the Code of Civil Procedure, the proposed appeal to His Majesty in Council must raise a substantial question of law of general importance. In determining the question whether or not the question of law raised is one of general importance the Court will take into consideration, among other facts, the question whether or not the question raised is likely to arise in numbers case. In the present case we are not satisfied either that the question raised by the proposed appeal is a substantial question of law, or that the question is one of general importance. The answer to the question raised before the Bench depended on the answer to the question whether or not the additional amount awarded by the Tribunal to the opposite party by way of interest was 'income' within the meaning of the Act. The Bench held that the amount awarded to the opposite party was really by way of damages and as such it could not be characterised as 'income' within the meaning of the Act. The short question that is sought to be raised before HIs Majesty in Council, therefore, is whether or not the amount of Rs. 12,70 was awarded to the opposite party by way of interest or by way of damages. This question strictly speaking is not a pure question of law, but is a mixed question of fact and law certainly not a substantial question of law.

Apart from this, the question is not likely to arise in a number of cases. Instances of acquisition of house property and the taking of its possession by the Improvement Trust before the amount of compensation has been finally determined must be few and far between and as such the question whether the amount awarded to a particular person as compensation for acquisition is by way of interest or by way of damages is not likely to arise in a large number of cases. We cannot, therefore, hold that the question sought to be raised is a question of general importance.

For the reasons given above we dismiss this application with costs.

Application dismissed.


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