TaxTMI 
TaxTMI 
2019 (8) TMI 1424
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....this issue, and has already held that interest received by assessees u/s 28 of Land Acquisition Act, is a part of compensation and is not liable to tax. The Ld. AR further invited our attention to the fact there is a delay in filing the appeals by 70 days and 170 days respectively in ITA No.1424/Del/2018 and in ITA No.1425/Del/2018. It was submitted that the reason for delay in filing appeals as stated in their application for condonation of delay is the fact that the assessees were agriculturists and due to ignorance, the assessee were unable to take advice of counsels and it was only after the decision of the Hon'ble Supreme Court in the case of Shri Hari Singh & Ors. that assessees decided to file appeals against the order of the ld. CIT(A). The Ld. AR submitted that in view of substantial justice and in view of the fact that the assessees were ignorant and uneducated persons, the delay may be condoned. 3. The Ld. DR had no objection to application for condonation of delay. Therefore, the delay was condoned and ld. AR was directed to proceed with his arguments. 4. The ld. AR submitted that these appeals are covered in favour of assessee by the order of the Hon'ble Supreme Co....
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....e same has again held that interest receipt on enhanced compensation u/s 28 of the Land Acquisition Act is in the nature of compensation. The finding of the Hon'ble Tribunal as reproduced below:- "8. We have gone through the orders of the authorities below in the light of the arguments on either side and the decisions of the Hon'ble Apex Court cited above. In the case of Ghanshyam (supra), the Hon'ble Supreme Court held in unequivocal terms that the additional amount u/s 23(1A), solatium under section 23(2) and interest on excess compensation u/s 28 of the Land Acquisition Act form part of enhanced compensation u/s 45(5)(b) and, therefore, is subject to tax u/s 45(5) in the year of receipt. No contrary view is taken by the Supreme Court in the subsequent judgments and as on the date, law is fairly settled that the amount of interest received u/s 28 of the land Acquisition Act is in the nature of capital gain. In the case of Hari Singh (supra) while dealing with the similar question under identical set of facts while setting aside the matter to the file of the AO to examine the facts of the case and to apply the law as contained in the Income-tax Act, Hon'ble Supreme Court specif....
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....d Hari Singh (supra) above, direct the ld. AO to refund the TDS amount that was deducted on account of the interest received under section 28 of the Land Acquisition Act Also. With these directions, we allow the appeal of the assessee. 11. In the result, the appeal of the assessee is allowed." 5. Further, we find that the Hon'ble Chandigarh Bench of the Tribunal vide order dated 11/01/2019 has dealt with the case law of Manjit Singh and relying on the order of the Hon'ble Supreme Court in the case of Hari Singh has allowed relief to the assessee by cancelling order u/s 263 by holding as under:- 6. During the course of hearing before us, Id. counsel for the assessee pointed out that subsequent to the decision passed by the Hon'ble jurisdictional High Court in the case of Naresh Jain (supra),which was heavily relied upon by the Id. Pr. CIT in his order for stating that the proposition laid down by the Apex Court in the case of Ghanshyam, HUF stood overruled, and that interest u/s 28 was liable to tax as 'income from other sources', the Hon'ble Apex Court had categorically reiterated its decision rendered in the case of Ghanshyam, HUF in the case of Union of India....
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....o be deducted therefrom as per the provisions of the Act. The Union of India had come in appeal before the Hon'ble Supreme Court against this order of the High Court stating that it was the Assessing Officer who was capable of determining the nature of land as being agricultural or not for the purposes of taxability under the Income Tax Act, 1961. The same was agreed to by the Hon'ble Apex Court and they had, therefore, directed the AO to examine this aspect and further categorically stated that the proposition laid down by it in Ghanshyam, HUF(supra) vis a vis interest received u/s 28 of the LAA, 1894 be kept in mind to ascertain whether the interest received amounts to compensation or not. The relevant findings of the Hon'ble Supreme Court in this regard are as under : We find force in the submission of the learned Additional Solicitor General insofar as the challenge to the direction given to the Land Acquisition Collector to determine as to whether the land in question is agricultural land or not Since the Land Acquisition Collector had. already deducted tax at source and deposited with the Income Tax Department, in such circumstances, better course of action, wh....