These are cross-appeals and cross-objections filed by assessee and Revenue against orders of CIT(A), New Delhi for asst. yrs. 2000-01, 2001-02 and 2002-03. Following grounds have been taken by assessee and Revenue: Grounds taken in ITA No. 2783/Del/2005: "On facts and in circumstances of case, whether CIT(A) was justified in: Applying ratio laid down in case of CIT vs. Hindustan & Land Development Trust Ltd. in present case even after insertion of s. 45(5) in IT Act, w.e.f. 1st April, 1988 specifically for charging of enhanced compensation in year of receipt. Holding that additional compensation cannot be taxed unless it attains finality from higher forum in spite of fact that additional compensation has actually been received by assessee and thereby deleting addition of Rs. 13,66,172 made on account of long-term capital gain arising out of enhanced compensation received and taxed under s. 45(5) of IT Act and interest of Rs. 32,45,508 received on enhanced compensation as income from other sources in year of receipt. Holding that interest relating to previous year only be charged to tax though assessee has not shown income from interest on accrual basis in his return of income, nor was he maintaining any accounts on mercantile system." Grounds taken in C.O. No. 10/Del/2007: "1. That having regard to facts and circumstances of case, learned CIT(A) has erred in law and on facts in confirming action of learned AO in framing assessment on HUF whereas HUF was not chargeable to tax that too in respect of income assessed by learned AO. That having regard to facts and circumstances of case, learned CIT(A) has erred in law and on facts in confirming action of learned AO in framing assessment under s. 143(3) even though notice under s. 143(2) was not served upon appellant HUF within statutory allowable period. That having regard to facts and circumstances of case, learned CIT(A) has erred in law and on facts in confirming action of learned AO in levying interest under ss. 234A, 234B and 234C. That cross-objector craves leave to add, amend, modify, delete any of ground(s) of cross-objection before or at time of hearing." Ground taken in ITA No. 1684/Del/2003: "1. That having regard to facts and circumstances of case, learned CIT(A) has erred in law and on facts in not quashing impugned assessment, more so in view of fact that no notice under s. 143(2) or 132(1) were issued to appellant in its HUF status. In any view of matter and in any case, impugned assessment framed by learned AO was liable to be cancelled. That having regard to facts and circumstances of case, learned CIT(A) has erred in law and on facts in confirming action of learned AO in making addition of Rs. 17,85,466 as income chargeable to tax under head Capital gain , more so when nothing was chargeable to tax in year under appeal. In any view of matter and in any case, addition of Rs. 17,85,466 is bad in law and against facts and circumstances of case. That having regard to facts and circumstances of case, learned CIT(A) has erred in law and on facts in charging interest under s. 234A and 234B. That appellant craves leave to add, amend, modify, delete any of grounds of appeal before or at time of hearing and all above grounds are without prejudice to each other." Grounds taken in ITA No. 5497/Del/2004: "On facts and in circumstances of case, whether CIT(A) was right in law: In deleting addition of Rs. 1,12,74,922 made on account of long-term capital gain arising out of enhanced compensation received and taxed under s. 45(5) of Act and interest thereon in year of receipt. That appellant craves for permission to add, delete or amend grounds of appeal before or at time of hearing of appeal." Grounds taken in C.O. No. 187/Del/2006: "1. That having regard to facts and circumstances of case, learned CIT(A) has erred in law and on facts in not quashing assessment made on appellant whereas nothing was chargeable to tax on HUF as impugned property was individual property having been devolved as per proviso to s. 6 of Hindu Succession Act. In any view of matter and in any case, reopening of assessment on appellant as HUF was bad in law and against facts and circumstances of case. That having regard to facts and circumstances of case, learned CIT(A) has erred in law and on facts in upholding validity of assessment even though assessment was interfered by learned CIT. That having regard to facts and circumstances of case, learned CIT(A) has erred in law and on facts in confirming addition of Rs. 5,25,966 being amount of original award which could be brought to tax only in year of award. That having regard to facts and circumstances of case, learned CIT(A) has erred in law and on facts in not holding that interest is taxable only on accrual basis. That cross-objector craves leave to add, amend, modify, delete any of ground(s) of cross-objection before or at time of hearing." Ground taken in C.O. No. 212/Del/2006: "1. That having regard to facts and circumstances of case, learned CIT(A) has erred in law and on facts in sustaining addition of Rs. 5,25,966 on account of long-term capital gain, more so when nothing was chargeable to tax in hands of cross-objector and that too in year under appeal. That cross-objector craves leave to add, amend, modify, delete any of ground(s) of cross-objection before or at time of hearing." These are cross-appeals relating to asst. yrs. 2000-01, 2001-02 and 2002-03. In all these appeals Revenue has raised common issue with regard to taxation of enhanced compensation under s. 45(5) of IT Act, 1961. At out set learned Authorised Representative placed on record order of jurisdictional High Court in case of Chandi Ram in IT Appeal Nos. 4 to 7 of 2005 dt. 25th Feb., 2008 [reported at Chandi Ram & Ors. vs. CIT (2008) 217 CTR (P&H) 113: (2008) 4 DTR (P&H) 25 Ed.] and submitted that grounds raised by Revenue in respective appeals are squarely covered by decision of jurisdictional High Court. We have carefully gone through order of High Court as placed on record and found that Hon ble High Court has dealt with elaborately each and every aspect of s. 45(5) of IT Act, 1961 after having following observations: "We have considered submissions made by learned counsel for parties and have also perused impugned order as well as various judgments cited by learned counsel for parties. Sec. 45 of Act provides for charging of capital gain and such profits and gains shall be deemed to be income of previous year, in which transfer took place. Subsequently, when Department had to face difficulties in realizing capital gains arising on compensation by Courts at different stages i.e., at level of District Judge, High Court and Supreme Court, legislation introduced sub-s. (5) to s. 45 w.e.f. 1st April, 1988. Vide this sub-section, enhanced compensation was brought to charge to capital gain in year in which it was received. Prior to this, where capital gains accrue or arise by way of compensation, additional compensation is taken into consideration for determining capital gain for year in which transfer took place. To provide for rectification of assessment of year in which capital gain was originally assessed, s. 155(7A) was introduced. additional compensation was awarded in several stages by different appellate authorities. That necessitates rectification of original assessment at each stage. This again caused great difficulty in carrying out required rectification and in effecting recovery of additional demand. With view to remove these difficulties, new sub-s. (5) to s. 45 was inserted which provides for taxation of additional compensation in year of receipt instead of in year of transfer of capital asset. This provision was interpreted by various High Courts as well as by this Court and it has been held that s. 45(5)(b) of Act would be attracted only when assessee receives enhanced compensation in pursuance of final award/order of Court, Tribunal or other authority increasing compensation. If any amount is received after stay of award, in pursuance of any interim order, as payment subject to final result, it will not be amount received as enhanced compensation under s. 45(5)(b). This provision will be attracted only when final decision is rendered by appellate or other authority. In these decisions, decision of Supreme Court in CIT vs. Hindustan Housing & Land Development Trust Ltd. (supra) was constantly followed. We do not see any reason to have contrary view to these judgments, which have already been followed by this Court in ITR No. 26 of 1997 (CIT Patiala vs. Shri Karanbir Singh, Rajinder Kuti) decided on 17th Jan., 2007 and ITA No. 695 of 2005 (CIT vs. Shri Prem Singh) decided on 16th May, 2007. In these appeals, learned counsel for Revenue has argued that two provisions i.e., cl. (c) of s. 45(5) and sub-s. (16) of s. 155 of Act, which have been inserted by Finance Act, 2003 and which have changed entire dimension, have not been considered. After introduction of these two provisions, view taken by this Court and other Courts in aforesaid judgments is not sustainable. It is case of Revenue that both these provisions are procedural in nature, therefore, these will be applicable retrospectively, and thus will also be applicable in cases in hand, which pertain to asst. yrs. 1994-95 to 1998-99. We do not find any substance in aforesaid argument raised by learned We do not find any substance in aforesaid argument raised by learned counsel for Revenue. Clause (c) to s. 45(5) and sub-s. (16) to s. 155 of Act have been inserted by Finance Act, 2003 w.e.f. 1st April, 2004. notes on these clauses which have been published in (2003) 260 ITR 166 clearly state that these amendments will take effect from 1st April, 2004 and will, accordingly, apply in relation to asst. yr. 2004-05 and subsequent years. Clause (c) to s. 45(5) of Act was inserted to provide that where amount of compensation is subsequently reduced by any Court, Tribunal or other authority, capital gain of that year, in which compensation received was taxed, shall be recomputed accordingly. Sub-s. (16) to s. 155 of Act was inserted empowering AO to amend order of assessment to revise computation of said capital gain of that year by taking into consideration compensation, so reduced by authority. Actually, these provisions were inserted to meet situation when compensation is subsequently reduced and in that situation, it was provided that assessment of additional compensation is to be reduced in year of reduction. We are unable to accept reasoning given by Special Bench of Tribunal that cl. (c) to sub-s. (5) of s. 45 of Act inserted by Finance Act, 2003 is to be made applicable retrospectively, and taken to be introduced w.e.f. 1st April, 1988. It has been observed that this clause was inserted to make entire scheme workable and to supply obvious omission in provision. Therefore, said clause has to be taken to be declaratory in character and is applicable with retrospective effect. In our opinion, entire sub-s. (5) of s. 45 of Act is charging section. said sub-section itself is code and contains substantive provisions. Therefore, its provisions cannot be made applicable retrospectively without any express indication. Clause (c) to s. 45(5) was inserted by Finance Act, 2003 w.e.f. 1st April, 2004. In purpose clause, it was specifically stated that this amendment will taken effect from 1st April, 2004 and will, accordingly, apply in relation to asst. yr. 2004-05 and subsequent years. Similarly, sub-s. (16) to s. 155 of Act was introduced w.e.f. 1st April, 2004 and as per Note Published in (2003) 260 ITR 166 amendment was to apply in relation to asst. yr. 2004-05 and subsequent years. If legislation wanted to insert these clauses with retrospective effect, it could have been so stated in Amending Act. Previously, when sub-s. (7A) to s. 155 of Act was inserted by Finance Act, 1978 it was specifically mentioned that it was inserted with retrospective effect from 1st April, 1974, if legislation wanted to insert these clauses with retrospective effect, it could have been so mentioned in Amending Act, but when specifically legislative has mentioned that these clauses have been inserted w.e.f. 1st April, 2004 and will be applicable in relation to asst. yr. 2004-05 and not prior to that, then these clauses cannot be given retrospective operation merely on ground that these are declaratory in character. It is settled law, as has been held in Virtual Soft Systems Ltd. vs. CIT (2007) 207 CTR (SC) 733: (2007) 289 ITR 83 (SC), that taxing provision imposing liability is governed by normal presumption that it is not retrospective. There is no assumption as to retrospective of amendment." Copy of above decision was also handed over to learned Departmental Representative, who also after going through judgment had fairly conceded that issue regarding applicability of s. 45(5) has been elaborately considered by Hon ble High Court and issue has been decided in favour of assessee. We have considered rival contentions and gone through order of jurisdictional High Court as referred above and found that sub-s. (5) to s. 45 was inserted in statute which provides for taxation of additional compensation in year of receipt instead of in year of transfer of capital asset. This provision was inserted w.e.f. 1st April, 1988 i.e., asst. yr. 1988-89. Thereafter cl. (c) was inserted by Finance Act, 2003 w.e.f. 1st April, 2004. It was held by jurisdictional High Court that both cl. (c) of s. 45(5) and sub-s. (16) to s. 155 have been inserted w.e.f. 1st April, 2004, and will apply from asst. yr. 2004- 05 and not prior to that, it was accordingly held by Hon ble jurisdictional High Court that if any amount is received after stay of award, in pursuance of any interim order, as payment subject to final result, it will not be amount received as compensation under s. 45(5)(b) of IT Act, 1961. This provision will be attracted only when final decision is rendered by appellate or other authority. While considering applicability of s. 45(5), Hon ble High Court has also discussed in detail, ratio laid down by Hon ble Supreme Court in case of CIT vs. Hindustan Housing & Land Development Trust Ltd. (1986) 58 C T R (SC) 179: (1986) 161 ITR 524 (SC). jurisdictional High Court also observed that amendment to s. 45 of Act by inserting cl. (c) by Finance Act, 2003 only states that amended provisions would come into force w.e.f. 1st April, 2004. statute nowhere states that said amendment were either clarificatory or declaratory. On contrary, in note as published in (2003) 260 ITR (St) 166, it was clearly stated that this amendment would come into force w.e.f. 1st April, 2004 and will be applicable on asst. yr. 2004-05. Undisputed position in all these appeals are that they pertain to asst. yrs. 2000-01 and 2002-03 which are prior to relevant asst. yr. 2004-05 from which amendment is effective. As facts and circumstances in all appeals filed by Revenue are in pari materia with facts and circumstances discussed by Hon ble jurisdictional High Court and it is undisputed position that enhanced compensation and interest thereon so received is in dispute before higher appellate forums, assessed did not get absolute right over amount so received, same is not liable to tax till it reaches to finality. Hon ble Karnataka High Court in case of Chief CIT vs. Smt. Shantavva (2004) 188 CTR (Kar) 162: (2004) 267 ITR 67 (Kar) had also dealt with similar position and held as under: "Held, dismissing appeal, that sum of Rs. 8 lakhs was received by assessee, not as enhanced compensation, but as payments in pursuance of interim orders of Court and Supreme Court by furnishing security to t h e satisfaction of Court, pending determination of additional compensation. Only when reference Court determines compensation such determination becomes final, amount received in pursuance of interim order will be appropriated against compensation finally determined and will become income chargeable under head Capital gains . There mere fact that some amounts had been received by furnishing security, in pursuance of interim orders, pending final determination would not make amounts received by assessee compensation or consideration that could be subjected to tax under s. 45(5)(b)." (p. 68) In view of above discussion, respectfully following decision of Hon ble jurisdictional High Court, all appeals filed by Revenue are dismissed and appeal of assessee on this ground is allowed in his favour. In cross-objection filed by assessee, assessee has taken ground to effect that CIT(A) has erred in law and on facts in not quashing assessment made on appellant whereas nothing was chargeable to tax on HUF as impugned property was identical property having been devolved as per proviso to s. 6 of Hindu Succession Act. As we have already decided issue on merit in favour of assessee as per provisions of s. 45(5), which were discussed in great detail by jurisdictional High Court in case of Chandi Ram (supra), we do not go in technical plea taken by assessee in cross-objection. With regard to addition of principal amount of compensation, which was not received during year under consideration, there is no reason for bringing same to tax net in year under consideration. However, same can be examined in year in which original compensation was received subject to scope of reopening of assessment, if same is not time barred. We direct accordingly. ground taken by assessee in ITA No. 1684/Del/2003 with regard to no notice under s. 143(2) or 142 having been issued in name of HUF states, entire assessment framed by AO deserves to be quashed. As we have already decided issue on merit in favour of assessee by following decision of Hon ble jurisdictional High Court in case of Chandi Ram (supra), we are not going on technical issue raised by assessee. Similarly, ground taken in cross-objection No. 187 with regard to validity of reopening is also not decided, as we have already decided issue on merit in favour of assessee. In result, all appeals filed by Revenue are dismissed, whereas cross-objections and appeals filed by assessee are allowed in terms indicated hereinabove. *** INCOME TAX OFFICER v. KARAM VIR VASHISTH, HUF