AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (11) TMI 421
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.... impugned interest ought to have been accepted. The assessee's forth & fifth grounds challenge levy of interest u/s 234B and initiation of section 271(1)(c) penalty; respectively. 3. A perusal of the case file reveals that a co-ordinate Bench in its order dated 23.05.2014 remitted the assessee's first three grounds back to the Assessing Officer as under:- 5. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. During the course of hearing, a query was raised to the ld.counsel for the assessee that before the AO as well as the ld.CIT(A) the assessee had not denied the taxability of the interest and not claimed the amount as exempt u/s.10(37) of the Act. On the contrary, the prayer of the assessee was for taxing the amount on accrual basis and spread over of interest. In response to this query, the assessee has submitted a written note, which is reproduced hereinbelow:- "Brief Note Original return of income was filed on 16/08/2007 declaring total income of Rs. 39,700/-. Revised return of income was filed on 31/03/2008 showing total income of Rs. 59, 934/-. The appellant claimed exemption of Rs. 1....
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....er authorities, vide ground # 1 (supra) before Hon'ble ITAT, the appellant specifically claimed that interest awarded being integral part of compensation received ought to be held as not taxable in judgment of CIT vs Ghanshyam HUF(315 ITR 1). It is further submitted that even if it is held that challenge to the taxability of interest is a 'new ground' raised for the first time before the Hon'ble ITAT it is submitted that the same is a pure question of law which can be decided by the Hon'ble Tribunal on the basis of facts on record. The same view is take n by the Hon'ble Gujarat High Court recently in Tax appeal No. 2562 of 2009 and others vide order dated 02/04/2014 (Copy enclosed: please see page no. 30 & 31 in Para 40 & 41 reproduced below) "40. Therefore, any ground, legal contention or even a claim would be permissible to be raised for the first time before the appellate authority or the Tribunal when facts necessary to examine, such ground, contention or claim are already on record. In such a case the situation would be akin to allowing a pure question of law to be raised at any stage of the proceedings. This is precisely what has happened in the p....
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....cts (supra) is applied in TTA # 3403/Abd/1997 by the Hon'ble ITAT on page 23 Para 50 holding(Copy enclosed)- "50. In the instant case, we find that assessment was not quashed by the Ld. CIT (A) and further the decision on merits of the issue of Ld. CIT (A) wherever the Department has any grievance was agitated in appeal and the same have been decided on merits. We are of the considered view that the income of the assessee is to be computed as per provisions of the law and simply because an assessee has suffered more amount on tax than what is legally due, then the Department can not assess the income at a higher figure but should assess the income at correct amount as per the provisions of law. We, therefore, do not find arty merit in this ground of appeal of the Revenue and hence, the same is dismissed. " It is respectfully submitted that interest received on enhanced compensation being integral part of the compensation is not exigible lo tax since compensation itself is exempt from Long Term Capital Gains u/s 10(37) of the Act. It be so held now." 5.1. The ld.counsel for the assessee placed reliance on the judgement of the Hon'ble Jurisdictional High Court rendered in ....
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.... additional amount. It takes care of increase in the value at the rate of 12 per cent per annum. Similarly, under section 23(2) of the 1894 Act, there is a provision for solatium which also represents part of enhanced compensation. Similarly, section 28 empowers the Court in its discretion to award interest on the excess amount of compensation over and above what is awarded by the Collector. It includes additional amount under section 23(1A) and solatium under section 23(2) of the said Act. Section 28 of the 1894 Act applies only in respect of the excess amount determined by the Court after reference under section 18 of the 1894 Act. It depends upon the claim, unlike interest under section 34 which depends o undue delay in making the award. It is true that "interest" is not compensation. It is equally true that section 45(5) of the 1961 Act, refers to compensation. But as discussed hereinabove, we have to go by the provisions of the 1894 Act, which awards "interest" both as an accretion in the value of the lands acquired and interest for undue delay. Interest under section 28 unlike interest under section 34 is an accretion to the value, hence it is a part of enhanced compensation ....
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....0% amount under the head of "Solatium" and also entitled to get 9% interest for the first year and thereafter at the rate of 15% for the second year upto depositing of the awarded amount. The ld.Court has also ordered for 12% increase from the date of publication of the notification u/s.4 i.e. 13.08.1992 to the date of a ward i.e. 10.04.1995 passed by the Land Acquisition Officer as provided U/s.23(1)(A) of the Act. As per the contention of the ld.counsel for the assessee, all these amounts form part of the compensation in the view of the judgement of Hon'ble Supreme Court in the case of CIT vs. Ghanshyam (HUF)[supra]. It is also submitted that since the case is transfer of agricultural land, therefore, this amount is exempt u/s.10(37) of the Act and for the sake of clarity section 10(37) is reproduced hereunder:- Section 10(37):- in the case of an assessee, being an individual or a Hindu undivided family, any income chargeable under the head "Capital gains" arising from the transfer of agricultural land, where- (i) such land is situate in any area referred to initem (a) or item (b) of sub-clause (iii) of clause (14) of section 2; (ii) such land, during the period of two y....
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....Gandhinagar. The State government acquired the same in the year 1991. The acquisition proposal is dated 26.09.1991. The assessee received compensation @ Rs. 32/- per Sq. Mtr. He sought for enhanced compensation by way of filing land acquisition reference. The hon'ble reference court in its order dated 16.02.2005 enhanced the compensation awarded from Rs. 32/- per Sq. Mtr. to that of Rs. 210/- per Sq. Mtr. with 30% solatium, 9% interest for the first year and 15% for second year upto 28.02.2006. This resulted in gross compensation of Rs. 1,50,03,287/- in the hands of all co-owners received on 18.04.2006. The assessee's share came to be Rs. 37,50,822/-. It comprised of principle amount of Rs. 14,57,444/-, interest @ 9% for FY 1995-96 of Rs. 1,31,170/-, interest @ 15% from FY 1996- 97 to 28.02.2006 coming to Rs. 21,62,208/-. This interest amount aggregated to Rs. 22,93,378/-. The assessee spread over this interest sum in all corresponding assessment years following accrual principle. He quoted case law of Rama Bhai vs. CIT, 181 ITR 400, P S Krishna Rao vs. CIT, 181 ITR 408, Bikram Singh & others vs. Land Acquisition Collector & others, 224 ITR 551, in support. The Assessing Officer re....
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....lass of income or class of cases in which reduction or waiver of interest under section 234A, 234B or 234C as the case may be, could be considered by Chief Commissioner of Income-tax and Director General of Income-tax" further the board issued a clarification regarding the press notice dated 21/05/1996, which is as under. Clarification regarding waiver of interest claimed on the basis of Press Note dated 21-5-1996 1. The Board by an order [vide F.No. 400/234/95- IT(B)], dated 23- 5-1996, indicated the class of income or class of cases in which reduction or waiver of interest under sections 234A, 234B and 234C would be considered by the Chief Commissioner of Income-tax and Director-General of Income-tax. Prior to the issue of the order a Press Note was released on 21-5-1996 with a view to give wide publicity to the major step contemplated by the Board towards mitigating hardship in genuine cases. 2. However, the instances have come to the notice of the Board where certain claims have been made on the basis of para 2(v) of the. Press Note seeking waiver of interest for non-payment of advance tax. Para 2(e) of order dated 23-5- 1996 contains no such stipulation. It is hereby ....