Section 28 land acquisition interest treated as compensation, not income from other sources, under settled tax distinction.

Interest received under section 28 of the Land Acquisition Act was treated as part of enhanced compensation, because section 28 amounts are linked to the compensation award itself rather than being separate interest income. By contrast, section 34 amounts are compensation for delay in payment and have a different tax character. On that basis, the receipt was not chargeable as income from other sources and was treated as compensation in favour of the assessee.

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Issues: Whether interest received under section 28 of the Land Acquisition Act is to be treated as part of compensation and therefore not chargeable as income from other sources.

Analysis: The receipt described as interest under section 28 was examined in the light of the settled distinction between amounts awarded under sections 28 and 34 of the Land Acquisition Act. Amounts under section 28 were treated as an integral part of compensation and linked with solatium, whereas amounts under section 34 were regarded as compensation for delay in payment and having a different tax character. The year of taxability was not in dispute, and the governing principle was that section 28 receipts form part of the enhanced compensation.

Conclusion: The receipt under section 28 was held to be part of compensation and not taxable as income from other sources, in favour of the assessee.

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