2009 (9) TMI 985

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....have also prayed that the respondents be directed to refund the TDS amount of Rs. 11,60,451/- along with interest, which was deducted at source out of the compensation awarded to them as a result of acquisition of their land prior to 1.6.1999. Brief facts of the case are that the agricultural land of the petitioners was acquired by the State of Haryana for development of Sector 29, Panipat by the Haryana Urban Development Authority. On 18.3.1985, Award No. 9 was passed granting compensation. The regular first appeals filed by the petitioners were dismissed, however, the Letters Patent Appeals filed against the judgment of the learned Single Judge were allowed by the Letters Patent Bench and enhanced compensation was granted to the petiti....

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....he petitioners by filing any counter affidavit to the written statement. It appears to be well settled that under Section 194A of the Act, TDS could be deducted from the interest realised from enhanced compensation. A similar petition came up for our consideration in the case of Karnail Singh v. State of Haryana and others (CWP No. 21077 of 2008, decided on 13.8.2009). After discussing the relevant provision of Section 194LA of the Act and the expression of 'agricultural land' as defined in Section 2(14)(iii)(a) & (b) of the Act as also the notification No. 9447 (F.No. 164/3/87-IT(A-1) dated 6.1.1994, issued by the Central Government, the following question of law was framed in the said case: "Whether the interest accrue....

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.... under the Income Tax Act." The aforesaid proposition of law has been consistently reiterated by Hon'ble the Supreme Court in later judgments including the cases of T.K.N. Govindaraja Chetty v. CIT, (1967) 66 ITR 465 and K.S. Krishna Rao v. CIT, (1990) 181 ITR 408. Accordingly it has been accepted to be settled law that interest received on delayed payment of compensation is revenue receipt exigable to income tax. The issue came up before Hon'ble the Supreme Court in the case of Bikram Singh v. Land Acquisition Collector, (1997) 10 SCC 243. After referring to various judgments of Hon'ble the Supreme Court it was concluded that interest on delayed payment on the acquisition of immovable property would be revenue....