Interest on enhanced land acquisition compensation is taxable as income from other sources, not exempt under section 10(37).

Interest received under section 28 of the Land Acquisition Act on enhanced compensation was held taxable as income from other sources under sections 56(2)(viii) and 145B(1) on receipt basis. Section 10(37) was confined to compensation for compulsory acquisition of agricultural land and did not extend to interest on such compensation. Earlier decisions treating section 28 interest as part of compensation were distinguished after the later statutory amendment, so the assessee's claim for exemption failed.

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Issues: Whether interest received under section 28 of the Land Acquisition Act, 1894 on enhanced compensation for compulsory acquisition of agricultural land is exempt under section 10(37) of the Income-tax Act, 1961 or is taxable as income from other sources under sections 56(2)(viii) and 145B(1), with deduction under section 57(iv).

Analysis: The governing provisions were read together to hold that the 2010 amendment brought interest on compensation or enhanced compensation within the head "income from other sources" on receipt basis. Section 10(37) was held to cover compensation arising from compulsory acquisition of agricultural land and not interest on such compensation. The earlier decisions treating interest under section 28 as part of compensation were distinguished in light of the later statutory amendment and the binding precedent relied upon by the Tribunal.

Conclusion: The interest received on enhanced compensation under section 28 is taxable as income from other sources and is not exempt under section 10(37); the assessee's challenge fails.

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