TaxTMI 
TaxTMI 
2018 (3) TMI 471
X X X X Extracts X X X X
X X X X Extracts X X X X
....n of section 56(2)(viii) of the Income Tax Act, inserted by finance (No.2) Act, 2009 w.e.f. 01.04.2010. 2. The order of the Ld. Commissioner of Income Tax (Appeals)-I, Kanpur has erred in law and on facts that the assessee has received interest on enhance compensation u/s 28 of the Land Acquisition Act which is not exempted as per the provision of Section 56(2)(viii) of the Income Tax Act, inserted by finance (No.2) Act, 2009 w.e.f. 01.04.2010. 3. That the order dated 29.11.2016 of Hon'ble CIT(A) needs to be quashed and the order dated 30.03.2016 passed by Assessing Officer be restored." 2. Learned D. R. at the outset heavily placed her reliance on the order of the Assessing Officer and submitted that learned CIT(A)....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of the Act and the interest received by him in terms of section 28 of the Land Acquisition Act is in the nature of additional compensation and not in the nature of interest and in support of his contention relied on the judgment of Hon'ble Himanchal Pradesh High Court in the case of CIT vs. Keshwa Devi [2012] 19 Taxman.com 220 (HP) which after relying upon the judgment of Hon'ble Supreme Court in the case of Ghanshyam, HUF (supra) has held that interest received u/s 28 of the Land Acquisition Act on enhanced compensation is not interest u/s 34 but is in the nature of compensation and therefore, was not taxable as interest. The Assessing Officer however, did not accept the contention of the assessee and made the additions after consi....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Court]. In most such cases, the dispute was with regard to the year of taxability of the Enhanced Compensation when such disputed compensation was received by the owner on furnishing security as the amount received is liable to be repaid, if, the higher court decides the issue against the owner [fully or partly] The amendments were made w.e.f. 1-4-2010 only to tax the interest in the year of receipt. These amendments were brought in to overcome the difficulties created by the decision of Supreme Court in the case of Rama Bai vs CIT, 181ITR 400(SC) wherein it was held that interest is taxable in different years on accrual basis. On the other hand, in case of Ghanshyam HUF, the Apex Court held that Interest u/s 28 ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 on 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 ....