TaxTMI 
TaxTMI 
TaxTMI 
2017 (6) TMI 780
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....turn (hereinafter referred to as 'ITR') for the impugned A.Y. i.e. 2012-13 was filed showing an income of Rs. 14,71,560/- and refund of Rs. 18,79,750/- was claimed.During the course of assessment proceedings, it was noticed that, the assessee had received interest on enhanced compensation amounting to Rs. 1,00,18,432/- during the year, which he had claimed as exempt u/s 10(37) of the Act, in the return of income. On this income, however, TDS had been partly deducted by the Land Acquisition Officer, which the assessee had filed before the Assessing Officer during the course of assessment proceedings. On the remaining amount, the assessee paid the Advance Tax. On being asked to furnish the details of interest received on compensation, the assessee agreed to an addition of 50% of the interest on enhanced compensation received and stated that all taxes were already paid before filing of return of income. The Assessing Officer, however, did not accept the assessee's submission and made an addition of Rs. 50,09,216/- stating that the assessee never offered this amount for taxation before the proceedings u/s 143(3) were started and only offered this amount after being specifically questio....
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....ble Jurisdictional High Court in the cases of CIT Vs. Bir Singh (HUF) and further to the amendment made in Section 45(5)(b) section 56(1)(viii) and section 145A(b) for this purpose. Thereafter relying upon the decision of the Hon'ble Delhi High Court in the case of CIT Vs. Zoom Communication(P) Ltd. 327 ITR 510, the Ld. CIT(A) upheld the penalty levied in the present case. 5. During the course of hearing before us Ld.Counsel for the assessee reiterated submissions made before the lower authorities and stated that all particulars relating to the interest on enhanced compensation received during the year had been disclosed by the assessee. Further Ld. Counsel stated that the same was claimed as exempt under section 10(37) in view of the decision of the Hon'ble Supreme Court in the case of Ghanshyam (HUF) (supra). Ld. Counsel for the assessee further relied on the decision of ITAT Chandigarh Bench in the case of ITO Vs. Rameshwar Giri in ITA No. 1344/Chd/2012 dt. 11/06/2013 and pointed out that the ITAT in the said case had held that since the AO did not bifurcate which part of interest was under section 28 of the Land Acquisition Act and which part was taxable therefore at the time ....
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....before us. 10. The sole issue in the present case is relating to levy of penalty under section 271(1)(c) of the Act on interest on enhanced compensation received which was not offered to tax. It is not disputed that particulars of the said income were disclosed in the return of income filed by the assessee on 30/07/2012 and that taxes had also been paid on the same claiming the same as exempt u/s 10(37) of the Act.It is also not in dispute that the assessee offered the same to tax only when confronted by the AO. The contention of the Revenue is that there was no debate about the taxability of the said income in view of the clear provisions of section 145 A(b) and 56(viii) of the Act,and the assessee having offered the same to tax only when confronted by the AO during assessment proceedings, penalty u/s 271(1)(c) was leviable. The sole argument of the Ld. Counsel for the assessee in defence is that all particulars relating to the said income had been disclosed in the return of income and had been claimed as exempt under a bonafide belief borrowed from the decision of the apex court in Ghanshyam (HUF). The reasons given by the Ld. Counsel for the assessee for harboring such b....
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.... [(iia)..... (iii).... [(iv) in the case of income of the nature referred to in clause (viii) of sub-section(2) of section 56, a deduction of a sum equal to fifty per cent of such income and no deduction shall be allowed under any other clause of this section.] Clearly, as per the said provisions, interest on enhanced compensation is to be taxed in the year of receipt @50% of the same. But having said so, there is no denying the fact that at the time of filing of return of income by the assessee for the impugned Assessment year i.e; on 30/07/2012 there was the judgment of the Hon'ble Apex Court in CIT Vs. Ghanshyam(HUF) 315 ITR 1 dt. 16/07/2009, wherein the Hon'ble Apex Court had after going through the provisions of the Land Acquisition Act, 1854,categorically stated that interest received under section 28 of the Land Acquisition Act was to be treated as part of compensation and taxed accordingly as capital gain, while interest received under section 34 of the Land Acquisition Act, was in the nature of Revenue receipt and was to be taxed under the head income from other sources. Now considering this judgment of the Hon'ble Apex Court, we find merit in the contention of the....