IN THE HIGH COURT OF DELHI AT NEW DELHI 
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 21.012.2010 
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 Present: Ms. Suruchi Aggarwal, Advocate for the appellant/Revenue. 
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 + ITA 2064/2010 
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 Certain lands belonging to the mother of the assessee herein was acquired 
 by the State of Haryana under the provisions of Land Acquisition Act, 1894. 
 Compensation thereof was fixed by the Land Acquisition Collector.  The assessee 
 was not satisfied about the said compensation and, therefore, she preferred an 
 appeal thereagainst to the appellate Court i.e. the Court of  the Additional 
 District Judge, Haryana.   The Additional District Judge, Haryana enhanced the 
 compensation and order to that effect was passed in the assessment year in 
 question i.e. assessment years 2000-01.  The State of Haryana did not accept 
 this order of the ADJ enhancing the compensation and filed  an appeal before the 
 Punjab and Haryana High Court.  This appeal was pending adjudication. 
 In the Income-Tax Return  filed by the assessee for this assessment year, 
 the assessee did not show the enhanced compensation as his income on the ground 
 that this was still in inchoate state, inasmuch as,  the State of Haryana  had 
 filed an  appeal challenging the order of the ADJ and, therefore, income has not 
 crystallized. The Assessing Officer did not accept this plea and added the 
 amount of enhanced compensation as the income of the assessee. This order was 
 upheld by the CIT (A) and the assessee accepted the order  and paid tax.  The 
 Assessing Officer, however, initiated penalty proceedings under the provisions 
 of Section 271 (1) (c) of the Income-Tax Act (hereinafter referred to as ?the 
 Act?), for not disclosing the aforesaid enhanced compensation as income in the 
 Income-Tax Return filed by the assessee.  The penalty imposed by the Assessing 
 Officer has been deleted by the Tribunal.  It is, inter alia, pointed out by the 
 Tribunal that the issue as to whether the aforesaid enhanced compensation which 
 is subject matter of challenge would be treated as income accruing in the 
 concerned assessment year or not was a debatable issue.  It is pointed out by 
 the Tribunal that this Court in the case of Chandi Ram and Ors. Vs. CIT, 217 CTR 
 113 has held that enhanced compensation is chargeable to tax under Section 45(5) 
 (b) of the Act only in the year in which the assessee receives the same in 
 pursuance of final award/order of the Tribunal, court order or any other 
 authority increasing the compensation.  If any amount is received after stay of 
 the award in pursuance of any interim order, as payment, subject to the final 
 result, it will not be an amount received as enhanced compensation  under 
 Section 45 (5) (b)  of the Act. 
 It is thus observed that this legal position was prevailing as on the 
 date when the assessee filed the Income-Tax Return. It is a different matter 
 that the aforesaid ruling of this Court has been overruled by the Supreme Court 
 in the case of CIT Vs. Reliance Product, 322 ITR 158 in the year 2009.  Because 
 of the above, the issue was debatable and, therefore, the ITAT rightly deleted 
 the penalty.  We find that there is no substantial question of law which arises 
 for our consideration.  This appeal is accordingly dismissed. 
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 A.K. SIKRI, J. 
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 SURESH KAIT, J. 
 DECEMBER 21, 2010 
 skb 
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