Judgment:
Bilal Nazki, J.
1. Lands belonging to the assessee have been acquired by the Government in the year 1966 and compensation was awarded by the Land Acquisition Officer. On reference, compensation at higher rate was awarded. The assessee was held to be entitled to an interest of Rs. 43,642/- for the period 18-5-1966 to 9-12-1975. The State Government went in appeal against the enhancement made in the appeal. The appeal before the Supreme Court was pending. The Income-tax Officer held that the entire amount of interest on enhanced compensation should be brought to tax for the assessment year 1976-77. The order was challenged by way of appeal. The Appellant Assistant Commissioner held that as the matter had not become final and an appeal was before the Supreme Court, the amount of interest received by the assessee could not be taxed. He relied on a judgment of this Court in C.I.T. vs. SMT. SANKARI MANICKYAMMA1. On further appeal before the Tribunal, the same view was upheld relying upon the same judgment. Thereafter at the instance of the Revenue, the following question has been framed and referred to this Court:
' Whether on the facts and in the circumstances of the case, the interest on compensation the assessment year for which the interest should be brought to tax is the one in which it was awarded or the year in which issue of quantum of compensation becomes final?'
2.We have given the facts of the case somewhat in detail only because we have find that the question is not happily framed. The question, which needed to be answered, is 'Whether the assessing officer has to wait till the final disposal by the final Court in an acquisition matter before the interest accrued is taxed?' Therefore, we are reframing the question in the above mentioned phraseology and we find that the question is already answered by the Supreme Court in RAMA BAI vs. C.I.T.2. The fact that the compensation was enhanced by the High Court in an appeal and the interest accruing to it was received by the assessee makes him liable to pay the tax. However, it will be spread over the period for which it accrued to him, in accordance with the Supreme Court judgment. In any case, if the judgment enhancing the compensation in favour of the assessee is reversed by the Supreme Court, then the assessee, even after payment of the tax on the accrued interest, would not be remediless. He can always seek the refund of the tax so paid, by making appropriate application for rectification of the assessment. The Tribunal relied on judgment in Smt. Sankari Manickyamma (1 supra) that obviously stands reversed in view of the judgment of the Supreme Court judgment in Rama Bai (2 supra).
3.For all these reasons, we answer the question in favour of the Revenue as indicated above and against the assessee.