TaxTMI 
TaxTMI 
2019 (10) TMI 921
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....We have heard the rival contentions and perused the record. The issue which arises in the present appeal is against the amount received u/s 28 of the LAC Act i.e. enhanced compensation. The claim of the assessee is that such enhanced compensation was part of the compensation and was not taxable in his hands. However, the case of the Revenue is that the same is to be taxed as interest in the hands of the assessee. 6. We find that similar land (other portion) was acquired in the hands of the cousin brother of the assessee i.e. Sh. Satish Kumar Gupta. The Tribunal in bunch of appeals with lead order in the case of Sh. Amar Chand Gupta in ITA No.5367/Del/2018 relating to Assessment Year 2014-15 and others including in the case of Sh. Satish Kumar Gupta in ITA No.1707/Del/2018 relating to Assessment Year 2013-14, vide order dated 14.08.2019 has decided the said issue. The Relevant finding of the order of the Tribunal are as under:- 6. "We have heard both the parties and have gone through the material placed on record. We find that in all these appeals, it is an admitted fact that the assessees had received interest u/s 28 of Land Acquisition Act on enhanced compensation. The Hon'ble ....
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....nts 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 specifically directs that in case the learned AO finds that the compensation was received in respect of the agricultural land, the tax deposited with the Income-tax Department shall be refunded to the assessee. Hon'bleSupreme Court gave the above direction after noticing the decision in the case of Ghanshyam (supra). 9. In this set of circumstances, it does not admit of any doubt as to the nature of receipt by way of interest u/s 28 of the Land Acquisition Act in the hands of the assessee or the applicability of the Income-tax Act to such amount. When the Hon'ble Supreme Court specifically directs in the case of Hari Singh (supra), the learned AO shall examine the facts of the case and then apply the law as contained, CIT(A) has not stated that such an amount shall be....
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....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 Ors. Vs Hari Singh & Ors. in CA No. 15041/2017 dated 15.09.2017. It was pointed out that the decision of the jurisdictional High Court in the case of Naresh Jain was dated 12.07.2017, while the Apex Court had reiterated the decision rendered in the case of Ghanshyam, HUF subsequently in September,2017 and therefore, the proposition laid down by the Apex Court was the law of the land following which interest u/s 28 of the LAA, 1894,was in the nature of enhanced compensation and not in the nature of interest and therefore, had been rightly not returned to tax by assessees. It was pointed out that in view of the same, there was no error in the order of the AO and the jurisdiction assumed by Id. Pr. CIT, therefore, was erroneous. 7. The Id. DR on the other hand, relied....
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....re 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, which is in consonance with the provisions of Income Tax Act, is for the respondents to approach the concerned Assessing Officer(s) and to raise the issue that no tax is payable on the compensation/enhanced compensation which is received by them as their land was agricultural land. Once such an issue is raised before the Assessing Officer(s), it is for the Assessing Officer(s) to examine the facts of each case and then apply the law as contained in the Income Tax Act to determine the aforesaid question. Insofar as these cases are concerned, we allow these appeals by setting aside the directions contained in paragraph 7 and substitute the same with the following directions: (I) The respondents shall file appropriate returns before the Assessing Officer(s) in respect of Asse....