{"id":238670,"date":"1964-04-09T00:00:00","date_gmt":"1964-04-08T18:30:00","guid":{"rendered":"https:\/\/www.legalindia.com\/judgments\/dr-shamlal-narula-vs-commissioner-of-income-tax-on-9-april-1964"},"modified":"2015-11-11T17:37:36","modified_gmt":"2015-11-11T12:07:36","slug":"dr-shamlal-narula-vs-commissioner-of-income-tax-on-9-april-1964","status":"publish","type":"post","link":"https:\/\/www.legalindia.com\/judgments\/dr-shamlal-narula-vs-commissioner-of-income-tax-on-9-april-1964","title":{"rendered":"Dr. Shamlal Narula vs Commissioner Of Income-Tax, … on 9 April, 1964"},"content":{"rendered":"
Supreme Court of India<\/div>\n
Dr. Shamlal Narula vs Commissioner Of Income-Tax, … on 9 April, 1964<\/div>\n
Equivalent citations: 1964 AIR 1878, \t\t 1964 SCR (7) 668<\/div>\n
Author: K Subbarao<\/div>\n
Bench: Subbarao, K.<\/div>\n
           PETITIONER:\nDR. SHAMLAL NARULA\n\n\tVs.\n\nRESPONDENT:\nCOMMISSIONER OF INCOME-TAX, PUNJAB\n\nDATE OF JUDGMENT:\n09\/04\/1964\n\nBENCH:\nSUBBARAO, K.\nBENCH:\nSUBBARAO, K.\nSHAH, J.C.\nSIKRI, S.M.\n\nCITATION:\n 1964 AIR 1878\t\t  1964 SCR  (7) 668\n CITATOR INFO :\n F\t    1967 SC 657\t (4)\n F\t    1968 SC 129\t (6,9)\n R\t    1970 SC1582\t (4)\n R\t    1970 SC1702\t (3)\n R\t    1972 SC 260\t (9)\n\n\nACT:\nIncome\tTax-Land acquired-Award made by\t Collector--Interest\non  compensation awarded-If interest amounted to a  part  of\ncompensation-Indian  Income-tax Act, 1922 (11 of 1922),\t ss.\n3, 4--Land Acquisition Act, 1894, s. 34.\n\n\n\nHEADNOTE:\nThe State acquired the land of the appellant.  The Collector\nmade an award under the Land Acquisition Act as a result  of\nwhich the appellant received Rs. 2,81,822\/-, which  included\na  sum\tof  Rs. 48,660\/- as interest upto the  date  of\t the\naward.\t 'The Income-tax Officer included Rs. 48,660\/-\t(the\nsaid  interest) in the total income of the appellant on\t the\nground that the said amount was not a capital receipt.\t The\nmatter\twent  upto the Income-tax Appellate  Tribunal.\t The\nTribunal excluded the said interest from the total income of\nthe assessee (appellant) on the ground that it was a capital\nreceipt.   On a reference the High Court held that the\tsaid\ninterest was not a capital but a revenue receipt and as such\nliable\tto  tax under the Indian Income-tax Act.   The\tHigh\nCourt  granted\ta certificate to the appellant\tto  file  an\nappeal to the Supreme Court.  Hence the appeal.\nHeld:\t  (i) The scheme of the Land Acquisition Act and the\nexpress provisions thereof establish that the statutory\t in-\nterest\tpayable under s. 34 is not compensation paid to\t the\nowner  for depriving him of his right to possession  of\t the\nland acquired, but that given to him for the deprivation  of\nthe  use of the money representing the compensation for\t the\nland  acquired.\t In other words the statutory interest\tpaid\nunder  s.  34 of the Act is interest paid  for\tthe  delayed\npayment\t of  the compensation amount and,  therefore,  is  a\nrevenue receipt liable to tax under the Income-tax Act.\nBehari Lal Bhargava v. Commissioner of Income-tax, C.P.\t and\nU.P.,  (1941), 9 I.T.R. and P. V. Kurien, v. Cmmissioner  of\nIncome-tax, Kerala, (1962), 46 I.T.R. 288, overruled.\nWestminister Bank Ltd. v. Riches, (1947), 28 T.C. 159,\tCom-\nmissioner  of Income-tax, Madras v. CT.\t BM.   N.  Narayanan\nChettiar,<\/a> (1943), 11 T.T.R. 470 and Commissioner of  Income-\ntax Bihar and Orissa v. Maharajadhiraj Sir Kameshwar  Singh,\n(1953), 23 I.T.R. 212, approved.\nInglewood Pulp and Paper Co. Ltd. v. New Brunswaick Electric\nPower\tCommission,  A.I.R.  1928  P.C.\t 287   and   Revenue\nDivisional  Officer,  Trichinopoly  v.\tVenkatarama   Ayyar,\nA.I.R. 1936 Mad. 199, distinguished.\nShaw  Wallace's\t case,\tA.I.R. 1932  P.C.  138,\t Schulze  v.\nBensted,  (1915),  7  T.C. 30, and  Commissioner  of  Inland\nRevenue v.     Barnato, (1934-36), 20 T.C. 455, referred to.\n(ii) The interest under s. 34 of the Land Acquisition Act\nshall be  paid\ton  the\t amount awarded from  the  time\t the\nCollector take possession  until  the  amount  is  paid\t  or\ndeposited.  It\n669\nmakes  no  difference in the legal position between  a\tcase\nwhere  possession  has\tbeen taken  before  and\t that  where\npossession  'has been taken after the award, for  in  either\ncase   the  title  vests\"  in  the  Government\tonly   after\npossession has been taken.\nIn  no sense of the term can it (interest) be  described  as\ndamages\t or  compensation for the owner's right\t to,  retain\nPossession,  for  as he has no right  to  retain  possession\nafter possession was taken under s. 16 or s. 17 of the Act.\n\n\n\nJUDGMENT:\n<\/pre>\n
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 503 of  1963.
\nAppeal\tfrom the judgment and order dated January 31,  1962,
\nof the Punjab High Court in I.T.R. No. 28 of 1960.
\nB. N. Kripal and A. N. Kripal, for the appellant.
\nGopal Singh and R. N. Sachthey, for the respondent.
\nApril 9, 1964.\tThe judgment of the Court was delivered
\nby
\n     SUBBA RAO, J.-This appeal by certificate granted by the
\nHigh  Court of Punjab raises the question  whether  interest
\npaid under s. 34 of the Land Acquisition Act, 1894,  herein-
\nafter called the Act, is of the nature ‘of a capital receipt
\nor of a revenue receipt.\n<\/p>\n
The  relevant  facts  are not in dispute  and  they  may  be
\nbriefly\t stated.  The appellant, Dr. Shamlal Narula, is\t the
\nManager\t of  a Hindu undivided family,\twhich  owned,  inter
\nalia,  40  bighas  and\t11 biswas of land  in  the  town  of
\nPatiala.   The\tPatiala\t State\tGovernment  initiated\tland
\nacquisition  proceedings for acquiring the said\t land  under
\nRegulation  then  prevailing in the Patiala  State.   It  is
\ncommon\tcase that the State Regulations are in pari  materia
\nwith the provisions of the Act.\t The State of Patiala  first
\nmerged into the Union of Pepsu and later the Union of  Pepsu
\nmerged\tinto  the State of Punjab.  It is also\tcommon\tcase
\nthat there was a Land Acquisition Act in the Union of  Pepsu
\ncontaining provisions similar to those obtaining in the Act.
\nOn  October  6, 1953, the Act was extended to the  Union  of
\nPepsu.\tOn September 30, 1955, the Collector of Patiala made
\nan  award under the Act ,as a result of which the  appellant
\nreceived on December 1, 1955, a sum of Rs. 2,81,822\/-, which
\nincluded a sum of 48,660\/- as interest up to the date of the
\naward.\t For  the  year\t 1956-57,  the\tIncome-tax   Officer
\nincluded  the  said  interest in the  income  of  the  Hindu
\nundivided family of which the appellant is the manager,\t and
\nassessed  the  same  to\t income-tax,  after  overruling\t the
\nappellant’s contention that the said interest was a  capital
\nreceipt\t and,  therefore, not liable to tax.   On  June\t 14,
\n1957,  the  Appellate Assistant Commissioner  confirmed\t the
\norder of the Income-tax Officer.  The Appellant preferred an
\nappeal\tto  the\t Income-tax Appellate  Tribunal.   The\tsaid
\nTribunal by its order dated July 9, 1957, held that
\n670<\/span>
\nthe said amount representing the interest was a capital\t re-
\nceipt and on that finding the said amount was excluded\tfrom
\nthe  total income of the assessee.  At the instance  of\t the
\nCommissioner  of Income-tax the said Tribunal  referred\t the
\nfollowing question to the High Court of Punjab under s.\t 66-
\n(1) of the Income-tax Act, 1922:\n<\/p>\n
\t      “Whether\ton a true interpretation of  section
\n\t      34  of the Land Acquisition Act and the  Award
\n\t      given  by the Collector ‘of Pepsu on the\t30th
\n\t      September, 1955, the sum of Rs. 48,660\/-,\t was
\n\t      captital\treceipt not liable to tax under\t the
\n\t      Indian Income tax Act?”\n<\/p><\/blockquote>\n
The said reference was heard by a Division Bench of the High
\nCourt and it held that the said amount was not a capital but
\na revenue receipt and as such liable to tax under the Indian
\nIncome-tax Act.\t Hence the present appeal.
\nLearned\t counsel  for  the appellant raised  before  us\t two
\ncontentions,  namely, (i) the sum of Rs. 4.8,660\/-  received
\nby  the\t appellant  under the  award  was  compensation\t for
\ndeprivinl,7  him of his right to possession of his  property
\nand was therefore, a capital receipt not liable to tax;\t and\n<\/p>\n
(ii)  whatever\tmay be the character of the  amount  awarded
\nunder  s. 34 of the Act by way of interest in a\t case  where
\npossession of the land has been taken by the State after the
\naward,\tin a case where possession of the land acquired\t has
\nbeen taken before the award, it would be a capital  receipt,
\nfor  it is said that in the latter the interest\t necessarily
\ntakes the character of compensation for depriving the  owner
\nof the land his, right to possession.\n<\/p>\n
On  behalf  of the Revenue the order of the  High  Court  is
\nsought to be sustained for the reasons stated therein.
\nThe  question  raised  turns upon the true  meaning  of\t the
\nprovisions of s. 34 of the Act.\t It reads:\n<\/p>\n
\t      “When  the amount of such compensation is\t not
\n\t      paid   or\t deposited  on\tor   before   taking
\n\t      possession  of the land, the  Collector  shall
\n\t      pay  the amount awarded with interest  thereon
\n\t      at  the  rate ‘of six per ~centum\t per  ~annum
\n\t      from  the time of so ~takin- possession  until
\n\t      it should have been so paid or deposited”.\n<\/p><\/blockquote>\n
The  section itself makes a distinction between\t the  amount
\nawarded\t as  compensation and the interest payable  on\tthe,
\namount so awarded.  The interest shall be paid on the amount
\nawarded\t from the time the Collector takes possession  until
\nthe amount is paid or deposited.  To appreciate the scope of
\nthe  section it is necessary to notice briefly the scope  of
\nan  award and the manner in which possession is taken  under
\nthe  Act.  After the statutory notifications are issued\t and
\nthe
\n671<\/span>
\nrequisite  notice is given to the persons interested in\t the
\nland so acquired, the Collector, after holding the necessary
\nenquiry, makes an award, inter alia, determining the  amount
\nof  compensation payable for the land so acquired.   Section
\n15  in\tof the Act says that in determining  the  amount  of
\ncompensation the Collector shall be guided by the provisions
\ncontained  in  ss. 23 and 24.  Section 23 provides  for\t the
\nmatters to be considered in determining compensation; s.  24
\ndescribes  the\tmatters to be neglected in  determining\t the
\ncompensation.\tA perusal of the provisions of s.  23  shows
\nthat  interest is not an item included in  the\tcompensation
\nfor  any  of  the  matters  mentioned  therein;\t nor  is  it
\nmentioned  as  a consideration for the\tacquisition  of\t the
\nland.\tUnder cl. (2) of s. 23, the Legislature\t in  express
\nterms  states  that in addition to the market value  of\t the
\nland  the  court shall in every case award a sum of  15\t per
\ncent.  of  such\t market\t value\tin  consideration  of\t-the
\ncompulsory  nature of the acquisition.\tIf interest  on\t the
\namount of compensation determined under s. 23 is  considered
\nto  be a part of the compensation or given consideration  of
\nthe  compulsory nature of the acquisition,  the\t Legislature
\nwould  have provided for it in s. 23 itself.   But  instead,
\npayment\t of interest is provided for separately under s.  24
\nin Part V of the Act under the heading “Payment”.  It is  so
\n,done,\tbecause interest pertains to the domain\t of  payment
\nafter  the  compensation  has been  ascertained.   It  is  a
\nconsideration  paid  either  for the use  of  the  money  or
\nforbearance  from  demanding  it after it  has\tfallen\tdue.
\nTherefore, the Act itself makes a clear distinction  between
\nthe  compensation  payable  for the land  acquired  and\t the
\ninterest payable on the compensation awarded.
\nAnother\t approach to the problem leads to the  same  result.
\nUnder s. 16 of the Act when the Collector has made an  award
\nunder  s. 11 he may take possession of the land which  shall
\nthereupon  vest absolutely in the Government free  from\t all
\nencumbrances.  Under s. 17 thereof:\n<\/p>\n
\t      “In cases of urgency, whenever the appropriate
\n\t      Government  so directs, the Collector,  though
\n\t      no  such\taward  has been made,  may,  on\t the
\n\t      expiration   of\tfifteen\t  days\t from\t the
\n\t      publication of the notice mentioned in section
\n\t      9,  sub-section  (1), take possession  of\t any
\n\t      waste  land or arable land needed\t for  public
\n\t      purposes or for a Company.\n<\/p><\/blockquote>\n
\t      Such  land shall thereupon vest absolutely  in
\n\t      the Government, free from all encumbrances”.\n<\/p><\/blockquote>\n
Under  both the sections the land acquired vests  absolutely
\nin the Government after the Collector has taken\t possession-
\nin one case after the making of the award and in the  other,
\neven
\n672<\/span>
\nbefore\tthe making of the award.  In either case, some\ttime
\nmay  lapse between the taking of possession of the  acquired
\nland by the Collector and the payment or deposit of the\t com
\npensation to the person interested in the land acquired.  As
\nthe  land acquired vests absolutely in the  Government\tonly
\nafter the Collector has taken possession of it, no  interest
\ntherein will be outstanding in the claimant after the taking
\nof such possession: he is divested of his title to the\tland
\nand  his right to possession thereof, and both of them\tvest
\nthereafter  in\tthe  Government.   Thereafter  he  will\t  be
\nentitled only to be paid compensation that has been or\twill
\nbe  awarded  to him.  He will be entitled  to  compensation,
\nthough the ascertainment thereof may be postponed, from\t the
\ndate  his  title  to the land and the  right  to  possession
\nthereof have been divested and vested in the Government.  It
\nis  as it were that from that date the\tGovernment  withheld
\nthe compensation amount which the claimant would be entitled
\nto under the provisions of the Act.  Therefore, a  statutory
\nliability  has\tbeen  imposed  upon  the  Collector  to\t pay
\ninterest  on the amount awarded from the time of the  taking
\npossession  until  the amount is paid  or  deposited.\tThis
\namount is not, therefore, compensation for the land acquired
\nor  for deprivin- the claimant of his right  to\t possession,
\nbut is that paid to the claimant for the use of his money by
\nthe  State.  In this view there cannot be any difference  in
\nthe legal position between a case where possession has\tbeen
\ntaken before and that where possession has been taken  after
\nthe  award,  for  in  either case the  title  vests  in\t the
\nGovernment only after possession has been taken.
\nThe Legislature expressly used the word “interest” with\t its
\nwell konwn  connotation\t under\ts. 34 of the  Act.   It\t is,
\ntherefore,     reasonable   to\tgive  that  expression\t the
\nnatural meaning it  bears.    There   is   an\tilluminating
\nexposition  of\tthe expression “interest” by  the  House  of
\nLords in Westminster Batik, Ltd. v. Riches(1).\tThe question
\nthere  was whettier where in an action for recovery  of\t any
\ndebt or damages the court exercises its discretionary  power
\nunder  a statute and orders that there shall be included  in
\nthe sum for which the judgment is given interest on the debt
\nor damages, the sum of interest so included is taxable under
\nthe  Income-tax Acts.  If the said amount was  “interest  of
\nmoney” within Schedule D and the General Rule 21 of the\t All
\nSchedules Rules of the Income Tax Act, 1918, income-tax\t was
\npayable\t thereon.   In. that context it was  contended\tthat
\nmoney awarded as damages for the detention of money was\t not
\ninterest  and bad not the quality of interest.\tLord  Wright
\nobserved:\n<\/p>\n
\t      “The  general idea is that he is\tentitled  to
\n\t      compensation  for the deprivation.  From\tthat
\n\t      point of view
\n\t      (1)   (1947) 28 T.C. 159, 189.\n<\/p><\/blockquote>\n
\t      673<\/span><\/p>\n
\t      it would seem immaterial whether the money was
\n\t      due  to  him  under  a  contract\texpress\t  or
\n\t      implied,\tor a statute, or whether  the  money
\n\t      was  due\tfor  any other reason  in  law.\t  In
\n\t      either  case the money was due to him and\t was
\n\t      not paid or, in other words, was withheld from
\n\t      him by the debtor after the time when  payment
\n\t      should have been made, in breach of his  legal
\n\t      rights,  and  interest  was  a   compensation,
\n\t      whether the compensation was liquidated  under
\n\t      an agreement or statute, as for instance under
\n\t      section 57 of the Bills of Exchange Act, 1882,
\n\t      or  was unliquidated and claimable  under\t the
\n\t      Act  as  in the present case.   The  essential
\n\t      quality  of the claim for compensation is\t the
\n\t      same,  and the compensation is  properly\tdes-
\n\t      cribed as interest”.\n<\/p><\/blockquote>\n
This   passage\tindicates  that\t interest,  whether  it\t  is
\nstatutory or contractual, represents the profit the creditor
\nmight  have made if he had the use of the money or the\tloss
\nhe  suffered, because he had not that use.  It is  something
\nin addition to the capital amount, though it arises ‘out  of
\nit.  Under s. 34 of the Act when the Legislature  designedly
\nused the word “interest” in contradistinction to the  amount
\nawarded, we do not see any reason why the expression  should
\nnot be given the natural meaning it bears.\n<\/p>\n
The  scheme of the Act and the express\tprovisions  there,of
\nestablish that the statutory interest payable under s. 34 is
\nnot compensation paid to the owner for depriving him of\t his
\nright to possession of the land acquired, but that given  to
\nhim for the deprivation of the use of the money representing
\nthe compensation for the land acquired.\n<\/p>\n
We  shall now proceed to consider the case law cited at\t the
\nBar.  Where a Tribunal directed the Improvement Trust, under
\nthe provisions of s. 28 of the Land Acquisition Act, to\t pay
\ninterest to the assessee from the date of taking  possession
\n,of the property to the date of payment, a Division Bench of
\nthe  Allahabad\tHigh Court held, in Behari Lal\tBhargava  v.
\nCommissioner  of Income-tax, C. P. and U. P. (1),  that\t the
\ninterest  so awarded was in the nature of  compensation\t for
\nthe loss of the assessee’s right to retain possession of the
\nproperty  acquired and, therefore, was no income  liable  to
\ntax.  The reason for the said conclusion is stated thus:\n<\/p>\n
\t      “It is not the “fruit of a tree”-to borrow the
\n\t      simile used in Shaw Wallace’s case (2)-but was
\n\t      compensation or damages for loss of the  right
\n\t      to re
\n\t      (1) (1941) 9 I.T.R. 9, 24.\n<\/p><\/blockquote>\n
\t      (2)   A.I.R. 1932 P.C. 138.\n<\/p><\/blockquote>\n
\t      LP(D)lSC-22 . .\n<\/p><\/blockquote>\n
\t      674<\/span><\/p>\n
\t      tain  possession;\t and  it seems\tto  us\tthat
\n\t      Section 28 was designed as a convenient method
\n\t      of   measuring  such  damages  in\t  terms\t  of
\n\t      interest”.\n<\/p><\/blockquote>\n
As we have pointed out earlier, as soon as the Collector has
\ntaken  possession  of the land either before  or  after\t the
\naward  the  title  absolutely vests in\tthe  Government\t and
\nthereafter owner of the land so acquired ceases to have\t any
\ntitle  or right of possession to the land  acquired.   Under
\nthe  award  he\tgets  compensation  for\t both  the   rights.
\nTherefore, the interest awarded under s. 28 of the Act, just
\nlike  under  s.\t 34 thereof, cannot  be\t a  compensation  or
\ndamages\t for the loss of the right to retain possession\t but
\nonly compensation payable by the State for keeping back\t the
\namount payable to the owner.  Adverting to the said decision
\na Division Bench of the Madras High Court in Commissioner of
\nIncome-tax,  Madras  v. CT. RM.\t  N.  Narayanan\t Chettiar<\/a>(1)
\nobserved:\n<\/p>\n
\t      “………..   with  great  respect  we\tfind
\n\t      ourselves\t unable\t to  follow  the  reasoning.
\n\t      Certainly\t we are not prepared to\t accept\t the
\n\t      judgment\tas  a guide to the decision  in\t the
\n\t      present case”.\n<\/p><\/blockquote>\n
So  was the interest granted to an assesse under s.  18A  of
\nthe  Income-tax\t Act on the advance payment of\ttax  by\t him
\nunder  the  provision  of that section\theld  to  be  income
\ntaxable\t in his hand: see Commissioner of Income-tax,  Bihar
\nand  Orissa v. Maharajadhiraj Sir Kameshwar Singh(2).  There
\nwhen the decision of the Allahabad High Court in Behari\t Lal
\nBhargava’s  case(3)  was relied upon, the  learned  Judges,.
\nrefusing to follow it, observed thus:\n<\/p>\n
\t      “It  is  not a matter of\tdiscussion  for\t the
\n\t      Central\tGovernment  but\t the  duty  to\t pay
\n\t      interest\tis imposed by statute.\t Apart\tfrom
\n\t      this  I  think (with great respect)  that\t the
\n\t      Allahabad\t decision is of doubtful  authority.
\n\t      The  decision  is\t not  consistent  with\t the
\n\t      principle\t laid down in Schulze v.  Bensted(1)
\n\t      and   Commissioners  of  Inland\tRevenue\t  v.
\n\t      Barnato(5).   The Madras High Court  expressly
\n\t      declined\tto  follow  the\t Allahabad  case  in
\n\t      Commissioner   of\t Income-tax   v.   Narayanan
\n\t      Chettiar(1).”\n<\/p><\/blockquote>\n
The  Kerala  High Court in P. V. Kurien v.  Commissioner  of
\nIncome-tax, Kerala(6) held that interest paid on the enhanc-
\ned  amount  of\tcompensation  directed\tto  be\tpaid  by  an
\nappellate
\n(1)  (1943) 11 I.T.R. 470, 477.\n<\/p>\n
(2)  (1953) 23 I.T.R. 212, 225.\n<\/p>\n
(3)  9 I.T.R. 9.\n<\/p>\n
(4)  (1915) 7 T.C. 30.\n<\/p>\n
(5) (1934-36) 20 T.C. 455.\n<\/p>\n
(6) (1962) 46 I.T.R. 288.\n<\/p>\n
675<\/span><\/p>\n
court  in  an appeal against an award  of  compensation\t for
\ncompulsory  acquisition of land under the  Land\t Acquisition
\nAct  represented  capital and was not income  liable  to  be
\ntaxed under the Indian Income-tax Act.\tIt was argued there,
\nsum  estimated\tin  terms  of interest.\t In  coming  to\t the
\nconclusion     which  they  did, the learned  Judges  relied
\nupon the decision   of\tthe Judicial Committee in  Inglewood
\nPulp and Paper Co., Ltd.  v.  New Burnswick  Electric  Power
\nCommission(1) and   that of the Madras High Court in Revenue
\nDivisional Officer, Trichinopoly v. Venkatarama Ayyar(2). In
\nthe  former, the Judicial Committee directed  the  purchaser
\nwho had taken delivery and possession of the property he had
\npurchased  before the sale to pay interest to the vendor  on
\nthe purchase money from the date he had taken possession  on
\nthe  ground  that “the right to receive interest  takes\t the
\nplace  of the right to retain possession and is\t within\t the
\nrule”;\tand  in the latter, though it arose under  the\tLand
\nAcquisition  Act,  possession was taken\t by  the  Government
\nunder circumstances falling outside the scope of ss. 16\t and
\n17  of\tthe said Act.  In both the cases the title  did\t not
\npass to the vendee in one case and to the State in the other
\nwhen possession was taken by them and, therefore, it may  be
\nsaid that the owner was given interest in place of his right
\nto  retain possession of the property.\tBut in a case  where
\ntitle  passes to the State, the statutory interest  provided
\nthereafter  can only be regarded either as representing\t the
\nprofit\twhich owner ‘of the land might have made if  he\t had
\nthe use of the money or the loss he suffered because he\t had
\nnot  that use.\tIn no sense of the term can it be  described
\nas  damages or compensation for the owner’s right to  retain
\npossession,  for he has no right to retain possession  after
\npossession  was taken under s. 16 or s. 17 of the Act.\t We,
\ntherefore, hold that the statutory interest paid under s. 34
\nof  the Act is interest paid for the delayed payment of\t the
\ncompensation  amount  and, therefore, is a  revenue  receipt
\nliable\tto tax under the Income-tax Act.  The order  of\t the
\nHigh Court is, therefore, correct.\n<\/p>\n
In the result, the appeal fails and is dismissed with costs.\n<\/p>\n
\t\t\t  Appeal dismissed.\n<\/p>\n
(1) A.I.R. 1928\t P.C. 287.  (2)\t  A.I.R. 1936 Mad. 199.
\nL\/ P(D) ISCI–22(a)  . .\n<\/p>\n
676<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"
Supreme Court of India Dr. Shamlal Narula vs Commissioner Of Income-Tax, … on 9 April, 1964 Equivalent citations: 1964 AIR 1878, 1964 SCR (7) 668 Author: K Subbarao Bench: Subbarao, K. PETITIONER: DR. SHAMLAL NARULA Vs. RESPONDENT: COMMISSIONER OF INCOME-TAX, PUNJAB DATE OF JUDGMENT: 09\/04\/1964 BENCH: SUBBARAO, K. BENCH: SUBBARAO, K. SHAH, J.C. SIKRI, S.M. […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_lmt_disableupdate":"","_lmt_disable":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[30],"tags":[],"class_list":["post-238670","post","type-post","status-publish","format-standard","hentry","category-supreme-court-of-india"],"yoast_head":"\nDr. Shamlal Narula vs Commissioner Of Income-Tax, ... on 9 April, 1964 - Free Judgements of Supreme Court & High Court | Legal India<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.legalindia.com\/judgments\/dr-shamlal-narula-vs-commissioner-of-income-tax-on-9-april-1964\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Dr. Shamlal Narula vs Commissioner Of Income-Tax, ... on 9 April, 1964 - 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