TaxTMI 
TaxTMI 
2019 (7) TMI 933
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....ct to bring to tax interest received on compensation / enhanced compensation? 3. Brief facts of the case are as follows:- The assessee is an individual. For the relevant assessment year 2014-2015, the assessee had received enhanced compensation of Rs. 8,80,56,564 for compulsory acquisition of immovable property belonging to him. The enhanced compensation was awarded by the Hon'ble Sub Court, North Paravoor vide its order / decree dated 06.08.2012. Tax of Rs. 88,05,656 was deducted from the award and balance Rs. 7,92,50,909 was paid to the assessee. The assessee filed return of income for the assessment year 2014- 2015 on 21.02.2015 disclosing total income of Rs. 1,40,350 and claimed the TDS of Rs. 88,29,502 as refund. The assessment w....
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....usal of records, it is noticed that the aspect under review concerning this case, has not been considered by the Assessing officer while framing the assessment order. The relevant issue, i.e., the omission to tax the interest received on enhanced compensation amounting to Rs.l,83,31,228/- u/s 56(2)(viii) after allowing 50% deduction, as mentioned in para (2) of present order, was apparent omission on the part of the Assessing officer. This is so, as Rs. 91,65,614/- being 50% of the interest on enhanced compensation, remained to be added back, as such. In respect of the above, the Assessing officer has neither made any observation in the assessment order, nor, obtained any supporting documents from the assessee, while allowing above....
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....er of compensation / enhanced compensation and would not be taxable since the original compensation received was exempt u/s 10(37) of the I.T.Act For the above said proposition, the learned AR has strongly relied on the judgment of the Hon'ble Supreme Court in the case of CIT v. Ghanshyam (HUF) [(2009) 315 ITR 1 (SC)]. 5.1 The learned Departmental Representative strongly supported the order of the Commissioner of Income-tax passed u/s 263 of the I.T.Act. 6. We have heard the rival submissions and perused the material on record. Certain agricultural property of the assessee was compulsorily acquired by the Government during the assessment year 2011-2012. The compensation awarded originally was Rs. 3,00,35,666. The assessee filed the re....
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....led by the assessee). 6.3 The solitary issue that is raised in this appeal is regarding the taxability of interest allowed by the Hon'ble Sub Court on enhanced compensation. The assessee had established before the Assessing Officer that the interest allowed by the Hon'ble Sub Court was u/s 28 of the Land Acquisition Act, 1894 and it was part and parcel of the enhanced value of land acquired and hence not taxable. In support of this contention, the assessee had relied on the judgment of the Hon'ble Supreme Court in the case of CIT v. Ghanshyam (HUF) (supra). In the said judgment the Hon'ble Apex Court had elaborately dealt with various types of interest allowed under the Land Acquisition Act. The Hon'ble Apex Court in the said judgment ha....
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....t u/s 34 of the Land Acquisition Act. This is clear from the judgment / decree of the Hon'ble Sub Court, North Paravoor dated 06.08.2012, which is placed on record in the paper book filed by the assessee. 6.4 The Commissioner of Income Tax had sought to revise the assessment u/s 263 of the I.T.Act by stating that interest of Rs. 1,83,31,228 received by the assessee u/s 28 of the Land Acquisition Act, 1894 was to be taxed u/s 56(2)(vi) of the I.T.Act. According to the learned Commissioner of Income-tax, the Assessing Officer has not considered the taxability of Rs. 91,65,640 being 50% of the interest received, viz., Rs. 1,83,31,228. According to the CIT, the Assessing Officer has not made any observation in the assessment order in this re....
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....for the Pr.CIT to invoke revisionary jurisdiction u/s 263 of the I.T.Act to set aside the assessment completed u/s 143(3) of the I.T.Act. 6.5 The decision relied by the learned Commissioner of Income-tax do not in any way support the order of revision u/s 263 of the I.T.Act. The first judgment relied on by the Pr.CIT is the judgment of the Hon'ble Apex Court in the cases of Malabar Industrial Co. Ltd. v. CIT [243 ITR 83 (SC)]. The said judgment does not deal with any land acquisition case, but relates to interest paid on belated payment of consideration on sale of certain rubber estate. The Hon'ble Apex Court upheld the action u/s 263 of the I.T.Act as there was no proper application of mind by the Assessing Officer about the nature of i....