2018 (6) TMI 453

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....3 passed by the Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh (in short, "the Tribunal") in ITA No.131/Chd/2016 for the assessment year 2013-14, claiming following substantial questions of law:- "i) Whether on the facts and circumstances of the case, the Hon'ble ITAT is right in holding that the payment @ 12% per annum of the amount of compensation paid and recorded as interest in the "Award of Compensation" of the Punjab Government is enhanced/additional compensation ignoring the facts that initial notification was published on 22.4.2010 and competent authority/DFCCIL-cum-district Revenue Officer announced award on 27.2.2012. Thus payment @ 12% has been given for delay in payment which is clearly in the nature of int....

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....of TAN as the same was allotted in the month of October, 2012 itself. So far as the issue of interest on payments of compensation for agricultural land for the period from 1.4.2012 to 31.12.2012 was concerned, it was submitted that interest @ 12% per annum was to be paid from the date of initial notification to the date of payment as per the provisions of the Land Acquisition Act, 1894 (in short, "the 1894 Act") and this interest was part of land compensation amount. No specific interest due to delayed payment or any other reason over and above the land compensation had been paid to the land owners. Therefore, TDS was not deducted on this compensation. The Assessing Officer recorded that payment of compensation had been made from 16.4.2012 ....

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....quiring agricultural land was additional compensation and not interest. Aggrieved by the order, the revenue filed appeal before the Tribunal. Vide order dated 30.6.2016, Annexure A.3, the Tribunal dismissed the appeal filed by the revenue. Hence the instant appeal by the revenue. 3. We have heard learned counsel for the parties and perused the record. 4. It has been categorically recorded by the Tribunal that according to clause (b) of Section 145A of the Act, interest received by an assessee on compensation or on enhanced compensation shall be deemed to be the income of the year in which it was received. Further as per Section 56(viii) of the Act, income by way of interest received on compensation or enhanced compensation referred to....

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....rest on securities. Also, as per provisions of Section 194LA, TDS is deducted on payment of compensation on acquisition of certain immovable property other than agricultural land. Furthermore, the competent authority in this regard has clearly clarified that word interest has been wrongly used. It is infact an enhanced compensation. This statement of the competent authority is unambiguous and it has also been accepted by the Assessing Officer in the remand report. It is undisputed that the payment in this regard does not relate to any award by the court regarding payment of interest. The payment has been made as per Section 23(1A) of the Land Acquisition Act, 1894 which was erroneously mentioned as interest in the award of competent authori....