Interest on enhanced compensation taxed as income from other sources under the amended statutory scheme, not exempt compensation.

Interest received on enhanced compensation under section 28 of the Land Acquisition Act was treated as taxable income from other sources under the post-amendment scheme. The Tribunal followed the jurisdictional High Court's view that section 145B(1) and section 56(2)(viii) specifically bring such interest to tax on receipt, with a corresponding deduction mechanism, and that the Supreme Court ruling in Ghanshyam did not govern the amended position. On that basis, the assessee's claim of exemption under section 10(37) was rejected and the addition was sustained.

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Issues: Whether interest received on enhanced compensation under section 28 of the Land Acquisition Act, 1894 is taxable as income from other sources under the Income-tax Act, 1961, or whether it retains the character of compensation and remains exempt under section 10(37).

Analysis: The land acquired was situated within the jurisdiction of the Punjab and Haryana High Court, and the Tribunal treated the jurisdictional High Court's view as binding. It noted that the later statutory scheme, including section 145B(1) and section 56(2)(viii), specifically brings interest on compensation or enhanced compensation to tax on receipt and places it under the head "Income from other sources", with a corresponding deduction mechanism. On that basis, the Tribunal followed the jurisdictional High Court's ruling that the Supreme Court decision in Ghanshyam did not control the post-amendment position for such interest and rejected the assessee's reliance on section 10(37).

Conclusion: The interest on enhanced compensation was held taxable under section 56(2)(viii) and not exempt under section 10(37), and the addition was sustained.

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