Land acquisition interest treated as part of enhanced compensation, defeating revision based on a contrary tax classification.

Interest under section 28 of the Land Acquisition Act was treated as an accretion to the value of the land and part of enhanced compensation, distinct from interest under section 34. On that basis, and in light of the settled line of Supreme Court authority, the assessment accepting the assessee's claim could not be branded erroneous merely because the Principal Commissioner preferred a different view under the amended provisions of section 56(2)(viii), section 57(iv) and section 145A(b). Since the compensation itself was exempt under section 10(37), revision under section 263 was held unsustainable.

---

---

Issues: Whether the Principal Commissioner was justified in revising the assessment under section 263 on the view that interest received under section 28 of the Land Acquisition Act on enhanced compensation was taxable as income from other sources and that the Assessing Officer's order was erroneous and prejudicial to the interests of revenue.

Analysis: The assessment had accepted the assessee's claim that the interest received on enhanced compensation was part of the compensation itself. The Tribunal noted that the issue was governed by the line of decisions holding that interest under section 28 of the Land Acquisition Act is an accretion to the value of the land and forms part of enhanced compensation, distinguishable from interest under section 34. It also noted that the Supreme Court had reiterated the position in later decisions and that the compensation itself was exempt under section 10(37). In these circumstances, the assessment could not be characterised as legally erroneous merely because the Principal Commissioner preferred a different view based on the amended provisions of section 56(2)(viii), section 57(iv) and section 145A(b).

Conclusion: The revision under section 263 was not sustainable, and the assessee succeeded.

---