TaxTMI 
TaxTMI 
2019 (8) TMI 1423
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....sources in the year of receipt. Even, the jurisdictional Hon'ble Punjab & Haryana High Court in the case of Manjit Singh(HUF) Vs UOI and others in CWP No. 15506 of 2013 dated 14.02.2014 has referred to the decision of Hon'ble Supreme Court in the case of CIT Vs Ghanshyam(HUF) and held that interest received on enhanced compensation is a revenue receipt charged to income tax. 2. CIT(A) has erred in not considering the decision of the Hon'ble Punjab & Haryana High Court in CIT Vs Bir Singh ITA No. 209 of 2004 decided on 27.10.2010 and Sunder Lai and another Vs UOI in CWP No. 2014 decided on 21.09.2015 where in it was held that element of interest awarded by the court on enhanced amount of compensation u/s 28 of 1894 act falls for taxation u/s 56 as income from other sources in the year of receipt under cash system of accountancy. 2. At the outset, the ld. DR argued that the Ld. CIT(A) has wrongly allowed relief to the assessee after relying on the order of the Hon'ble Supreme Court in the case of Ghanshyam (HUF) which was delivered by the Hon'ble Supreme Court on 16/07/2009 whereas the Finance Act, 2009 w.e.f. 01/04/2010 was amended and to which income by way of inte....
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....n Act, 1894. The Hon'ble Apex Court in the case of CIT vs Ghanshyam(HUF) 182 taxman 368 has clearly held that interest received by the assessee in view of section 28 of Land Acquisition Act 1894 is part of the compensation and therefore was not taxable. The Hon'ble Delhi Bench of the Tribunal in the case of Shri Opinder Singh Virk, vide order dated 14/03/2019 has dealt with the decision of the Hon'ble Supreme Court in the case of Chet Ram (HUF) as well as the case laws of Ghanshyamdas and after analysing the 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....
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....ned AO, by granting exemption under section 10(37) of the Act, refunded a sum of Rs. 1,22,01,723/-. Only question is whether the interest received under section 28 of the Act assumes the character of enhanced compensation and consequently it is exempt under section 10(37) of the Act. In view of the decisions of the Hon'ble Supreme Court referred to above, we do not have any doubt in our mind as to the law in this aspect and while respectfully following the ratio laid down by the Hon'ble Supreme Court in the case of Ghanshyam (supra) and 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, ....
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....urt was that the assessees had received enhanced compensation on which tax had been deducted at source as per the provision of Section 194LA of the Act. The assessee had contended that no tax was deductible on the same as land was agricultural land and without examining these facts, taxes had been deducted at source. The Hon'ble High Court had directed refund of the taxes to the assessees and had directed the Land Acquisition Officer/Collector to examine whether their lands were agricultural or not and decide whether taxes were liable to 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....