SHAM LAL NARULA Vs. COMMISSIONER OF INCOME TAX PUNJAB JAMMU AND KASHMIR HIMACHAL PRADESH AND PATIALA
LAWS(SC)-1964-4-29
SUPREME COURT OF INDIA (FROM: PUNJAB & HARYANA)
Decided on
April 09,1964
SHAM LAL NARULA
Appellant
VERSUS
COMMISSIONER OF INCOME TAX,PUNJAB JAMMU AND KASHMIR,HIMACHAL PRADESH AND PATIALA
Respondents
Referred Judgements :-
INGLEWOOD PULP AND PAPER CO. LTD. V. NEW BRUNSMICK ELECTRIC POWER COMMISSION [REFERRED 2.]REVENUE DIVISIONAL OFFICER TRICHINOPOLY V. VENKATARAMA AYYAR [REFERRED 6.]
COMMISSIONER OF INCOME TAX VS. CT RM N NARAYANAN CHETTIAR [REFERRED 7.]
KURIEN P V VS. COMMISSIONER OF INCOME TAX [REFERRED 5.]
COMMISSIONER OF INCOME TAX VS. KAMESHWAR SINGH [REFERRED 8.]
BEHARI LAL BHARGAVA VS. COMMISSIONER OF INCOME-TAX [REFERRED 4.]
COMMISSIONER OF INCOME-TAX, BENGAL VS. SHAW WALLACE AND COMPANY [REFERRED 3.]
Cited Judgements :-
COMMISSIONER OF INCOME TAX VS. SANTI DEVI [LAWS(CAL)-1981-5-16] [REFERRED TO]STATE OF MAHARASHTRA, THROUGH COLLECTOR, YAVATMAL VS. RAMESH S/O TUKARAM MESHRAM [LAWS(BOM)-2017-11-434] [REFERRED TO]
EXECUTIVE ENGINEER, BEED IRRIGATION DIVISION VS. ASHABAI NARAYAN GHADGE [LAWS(BOM)-2020-2-220] [REFERRED TO]
MOVALIYA BHIKHUBHAI BALABHAI VS. INCOME TAX OFFICER [LAWS(GJH)-2016-3-301] [REFERRED TO]
SANSAR CHAND VS. CHIEF SECRETARY [LAWS(J&K)-2012-9-17] [REFERRED TO]
OIL AND NATURAL GAS CORPORATION LIMITED VS. HINDUSTAN CHEMICALS COMPANY [LAWS(GJH)-2023-4-819] [REFERRED TO]
K S KRISHNA RAO VS. COMMISSIONER OF INCOME TAX ANDHRA PRADESH [LAWS(SC)-1989-11-28] [FOLLOWED]
JOYANARAYAN PANIGRAHI VS. COMMISSIONER OF INCOME TAX [LAWS(ORI)-1972-8-2] [REFERRED TO]
SANT RAM VS. UNION OF INDIA [LAWS(P&H)-2009-10-88] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. ROHTAS INDUSTRIES LTD [LAWS(PAT)-1966-3-5] [REFERRED TO]
RAJ PAL SINGH VS. COMMISSIONER OF INCOME-TAX, HARYANA, ROHTAK [LAWS(SC)-2020-8-31] [REFERRED TO]
TULSHI CHARAN MUKHERJEE VS. STATE OF WEST BENGAL [LAWS(CAL)-2002-9-30] [REFERRED TO]
N V RAO CO OP SUGARS LTD VS. STATE BANK OF INDIA [LAWS(APH)-2003-4-98] [REFERRED TO]
SH. ZOMUANA VS. STATE OF MIZORAM [LAWS(GAU)-2016-1-52] [REFERRED TO]
NAROTAM RAM VS. LAND ACQUISITION COLLECTOR [LAWS(HPH)-2002-9-6] [REFERRED TO]
VINAY BODH VS. DOLEKAR [LAWS(HPH)-2015-5-54] [REFERRED TO]
KONKAN BARGE BUILDERS (P) LTD VS. INCOME TAX OFFICER [LAWS(BOM)-2007-8-260] [REFERRED TO]
GOVINDA CHOUDHURY AND SONS VS. COMMISSIONER OF INCOME TAX [LAWS(ORI)-1977-3-10] [REFERRED TO]
S A P MARIYUMMA VS. STATE OF KERALA [LAWS(KER)-1991-2-22] [REFERRED TO]
TUHI RAM VS. LAND ACQUISITION COLLECTOR [LAWS(P&H)-1991-12-2] [REFERRED TO]
KARNAIL SINGH VS. STATE OF HARYANA [LAWS(P&H)-2009-8-47] [REFERRED TO]
BINANI BROS P LTD VS. COMMISSIONER OF INCOME TAX [LAWS(CAL)-1992-7-27] [REFERRED TO]
MRS. USHA WAMANRAO CHARDE VS. COMMISSIONER OF INCOME TAX [LAWS(BOM)-2007-4-282] [REFERRED TO]
LORD KRISHNA BANK LIMITED VS. INCOME TAX OFFICER [LAWS(KER)-1988-12-30] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. ANNAMMA ALEXANDER [LAWS(KER)-1991-3-40] [REFERRED TO]
MADHA LAKHMAN VS. STATE OF GUJARAT THRO EXECUTIVE ENGINEER AND ORS [LAWS(GJH)-2014-4-226] [REFERRED TO]
MELLACHERUVU RAJESWAR RAO VS. CHITLURI SATYAM [LAWS(APH)-2013-12-179] [REFERRED TO]
M RAJESWAR RAO & OTHERS VS. CHITLURI SATYAM (DIED) & OTHERS [LAWS(APH)-2013-12-195] [REFERRED]
COMMISSIONER OF INCOME TAX VS. ASRAFI DEVI RAJGHARIA [LAWS(CAL)-1980-9-24] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. ORIENTAL INSURANCE CO LTD [LAWS(ALL)-2012-9-34] [REFERRED TO]
CENTRAL BANK OF INDIA VS. RAVINDRA [LAWS(SC)-2001-10-1] [REFERRED]
GHAZIABAD DEVELOPMENT AUTHORITY VS. BALBIR SINGH [LAWS(SC)-2004-3-53] [REFERRED TO]
TIRUCHIRAPALLI CO OPERATIVE MARKETING SOCIETY LIMITED VS. COMMISSIONER OF INCOME TAX [LAWS(MAD)-1998-4-116] [REFERRED TO]
ASHWANI DHINGRA VS. CHIEF COMMISSIONER OF INCOME TAX [LAWS(ALL)-2004-8-210] [REFERRED TO]
ANSAL HOUSING & CONSTRUCTION LTD. VS. STATE OF U P [LAWS(ALL)-2014-9-236] [REFERRED TO]
COMMISSIONER OF INCOME TAX VISAKHAPATNAM VS. V SUBBARAJU PROPRIETOR RAJA TRADING COMPANY KAKINADA [LAWS(APH)-2012-1-31] [REFERRED TO]
NARESH KUMAR VS. STATE OF PUNJAB AND OTHERS [LAWS(P&H)-2017-7-121] [REFERRED TO]
INDUSIND BANK LTD VS. SURENDRA KUMAR JAIN [LAWS(NCD)-2006-5-7] [REFERRED TO]
JOSE T MOOKKEN VS. COMMISSIONER OF INCOMETAX ERNAKULAM [LAWS(KER)-1976-9-5] [RELIED ON]
RM AR AR RM AR RAMANATHAN CHETTIAR VS. COMMISSIONER OF INCOME TAX MADRAS [LAWS(SC)-1966-10-38] [REFERRED]
T N K GOVINDARAJU CHETTY VS. COMMISSIONER OF INCOME TAX MADRAS [LAWS(SC)-1967-4-6] [REFERRED]
S R Y SIVARAM PRASAD BAHADUR RAJA SHRI V V V R K YACHENDRA KUMA RARAJA VS. COMMISSIONER OF INCOME TAX HYDERA BAD:INCOME TAX OFFICER NELLORE [LAWS(SC)-1971-8-77] [RELIED UPON]
SUNDER LAL AND ORS. VS. UNION OF INDIA AND ORS. [LAWS(P&H)-2015-9-429] [REFERRED TO]
GHAZIABAD DEVELOPMENT AUTHORITY VS. DR. N.K. GUPTA [LAWS(NCD)-2002-9-101] [REFERRED TO]
INDUSIND BANK LTD. VS. SURENDRA KUMAR JAIN [LAWS(RAJCDRC)-2006-5-1] [REFERRED TO]
KARAM VIR DHIR VS. PUNJAB STATE [LAWS(P&H)-2003-7-95] [REFERRED TO]
ASHWANI DHINGRA VS. CHIEF CIT [LAWS(ALL)-2003-10-218] [REFERRED TO]
ADDITIONAL COMMISSIONER OF INCOME TAX VS. VIRENDRA SINGH [LAWS(ALL)-1978-2-91] [REFERRED TO]
WALMIK POPAT PATIL VS. GOVERNMENT OF INDIA [LAWS(BOM)-2024-6-174] [REFERRED TO]
GURU RAO VS. STATE OF KARNATAKA [LAWS(KAR)-2012-1-57] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. TRAVANCORE TEA ESTATES LIMITED [LAWS(KER)-1993-8-35] [REFERRED TO]
NARAINDAS JAIN VS. AGRA NAGAR MAHAPALIKA AGRA [LAWS(SC)-1991-2-17] [REFERRED TO]
OM PRAKASH SHARMA VS. H.P. TOURISM DEVELOPMENT CORPORATION [LAWS(HPH)-2019-7-94] [REFERRED TO]
B. GOPA KUMAR VS. CANARA BANK, CANCARD DIVISION [LAWS(KAR)-2015-1-254] [REFERRED TO]
THE STATE OF MAHARASHTRA VS. BABARAO S/O. MAHADEORAO KHUNKAR [LAWS(BOM)-2017-11-450] [REFERRED TO]
M/S. APOLLO HEALTH AND LIFESTYLE LIMITED AND ANOTHER VS. MR. ANUPAM SARAOGI OF INDIAN INHABITANT [LAWS(APH)-2017-3-48] [REFERRED TO]
HINDUSTAN AERONAUTICS LTD VS. MUNISWAMY REDDY [LAWS(KAR)-1992-8-43] [REFERRED TO]
JOSE T MOOKEN VS. COMMISSIONER OF INCOME TAX [LAWS(KER)-1976-9-11] [REFERRED TO]
PETER JOHN VS. COMMISSIONER OF INCOME TAX [LAWS(KER)-1985-7-64] [REFERRED TO]
KAILASH NARAIN GUPTA VS. COMMISSIONER OF INCOME TAX [LAWS(RAJ)-1996-5-88] [REFERRED TO]
MANJET SINGH VS. UNION OF INDIA AND ORS. [LAWS(P&H)-2014-1-380] [REFERRED TO]
V V RAMAN VS. STATE OF A P [LAWS(APH)-1997-3-79] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. SAKIL AHMED [LAWS(CAL)-1986-5-20] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. PERIYAR AND PAREEKANNI RUBBERS LIMITED [LAWS(KER)-1971-12-32] [REFERRED TO]
COMMISSIONER OF INCOME TAX VS. VISHNUDATHA ANTHARJANAM A K T K M [LAWS(KER)-1972-7-35] [REFERRED TO]
MOHIT MARKETING LTD VS. CY CIT [LAWS(GJH)-2005-4-68] [REFERRED TO]
MAHENDRA PAL (DECEASED) THROUGH HIS LRS RANI LALITA KUMARI AND OTHERS VS. STATE OF HIMACHAL PRADESH AND OTHERS [LAWS(HPH)-2018-4-108] [REFERRED TO]
DR. POORNIMA ADVANI VS. GOVERNMENT OF NCT [LAWS(SC)-2025-2-101] [REFERRED TO]
UNION BANK OF INDIA VS. RATAN PRAKASH [LAWS(RAJ)-2007-11-54] [REFERRED TO]
JUDGEMENT
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(1.)This appeal by certificate granted by the High Court of Punjab raises the questions whether interest paid under S. 34 of the Land Acquisition Act, 1894, hereinafter called the Act, is of the nature of a capital receipt or of a revenue receipt.
(2.)The relevant facts are not in dispute and they may be briefly stated. The appellant, Dr. Shamlal Narula, is the manager of a Hindu undivided family, which owned, inter alia, 40 bighas and 11 biswas of land in the town of Patiala. The Patiala State Government initiated land acquisition proceedings for acquiring the said land under Regulations then prevailing in the Patiala State. It is common case that the State Regulations are in pari materia with the provisions of the Act. The State of Patiala first merged into the Union of Pepsu and later the Union of Pepsu merged into the State of Punjab. It is also common case that there was a Land Acquisition Act in the Union of Pepsu containing provisions similar to those obtaining in the Act. On October 6, 1953, the Act was extended to the Union of Pepsu. On September 30, 1955, the Collector of Patiala made an award under the Act as a result of which the appellant received on December 1, 1955, a sum of Rs. 2,81,822/-, which included a sum of Rs. 48,660/- as interest up to the date of the award. For the year 1956-57, the Income-tax Officer included the said interest in the income of the Hindu undivided family of which the appellant is the manager, and assessed the same to income-tax, after overruling the appellant'contention that the said interest was a capital receipt and, therefore, not liable to tax. On June 14, 1957, the Appellate Assistant Commissioner confirmed the order of the Income-tax Officer. The appellant preferred an appeal to the Income-tax Appellate Tribunal, The said Tribunal by its order dated July 9, 1957, held that the said amount representing the interest was a capital receipt and on that finding the said amount was excluded from the total income of the assessee. At the instance of the Commissioner of Income-tax the said Tribunal referred the following question to the High Court of Punjab under S. 66 (1) of the Income-tax Act, 1922:
"Whether on a true interpretation of Section 34 of the Land Acquisition Act and the Award given by the Collector of Pepsu on the 30th September, 1955, the sum of Rs. 48,660/-, was capital receipt not liable to tax under the Indian Income-tax Act -
(3.)The said reference was heard by a Division Bench of the High Court and it held that the said amount was not a capital but a revenue receipt and as such liable to tax under the Indian Income-tax Act. Hence the present appeal.
(2.)The relevant facts are not in dispute and they may be briefly stated. The appellant, Dr. Shamlal Narula, is the manager of a Hindu undivided family, which owned, inter alia, 40 bighas and 11 biswas of land in the town of Patiala. The Patiala State Government initiated land acquisition proceedings for acquiring the said land under Regulations then prevailing in the Patiala State. It is common case that the State Regulations are in pari materia with the provisions of the Act. The State of Patiala first merged into the Union of Pepsu and later the Union of Pepsu merged into the State of Punjab. It is also common case that there was a Land Acquisition Act in the Union of Pepsu containing provisions similar to those obtaining in the Act. On October 6, 1953, the Act was extended to the Union of Pepsu. On September 30, 1955, the Collector of Patiala made an award under the Act as a result of which the appellant received on December 1, 1955, a sum of Rs. 2,81,822/-, which included a sum of Rs. 48,660/- as interest up to the date of the award. For the year 1956-57, the Income-tax Officer included the said interest in the income of the Hindu undivided family of which the appellant is the manager, and assessed the same to income-tax, after overruling the appellant'contention that the said interest was a capital receipt and, therefore, not liable to tax. On June 14, 1957, the Appellate Assistant Commissioner confirmed the order of the Income-tax Officer. The appellant preferred an appeal to the Income-tax Appellate Tribunal, The said Tribunal by its order dated July 9, 1957, held that the said amount representing the interest was a capital receipt and on that finding the said amount was excluded from the total income of the assessee. At the instance of the Commissioner of Income-tax the said Tribunal referred the following question to the High Court of Punjab under S. 66 (1) of the Income-tax Act, 1922:
"Whether on a true interpretation of Section 34 of the Land Acquisition Act and the Award given by the Collector of Pepsu on the 30th September, 1955, the sum of Rs. 48,660/-, was capital receipt not liable to tax under the Indian Income-tax Act -
(3.)The said reference was heard by a Division Bench of the High Court and it held that the said amount was not a capital but a revenue receipt and as such liable to tax under the Indian Income-tax Act. Hence the present appeal.
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