TaxTMI 
TaxTMI 
TaxTMI 
2017 (4) TMI 1503
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....iginal return of income on 10.02.2009 showing total income of Rs. 91,48,470/-. This was a belated return u/s 139 (4) of the I.T.Act, 1961 (in short "Act") and not a return filed by due date, u/s 139(1) of the Act. The assessment order dated 30.11.2010 was passed by the Assessing Officer (in short "AO") u/s 143(3) of the Act wherein total income was assessed at Rs. 1,12,09,885/- and the following additions were made:- (a) Addition to income from other sources Rs. 20,60,810/- (b) Addition to long term capital gains Rs. 1,32,608/- (B.1). The assessee filed appeal against the aforesaid assessment order dated 30.11.2010 before the Ld.CIT(A) on the following grounds:- "1) That on the facts and in the circumstances of the case, the Id. ACIT, Circle-32(l), New Delhi (hereinafter called the Assessing Officer for short) has erred in holding that Rs. 20,60,810/-received as interest from compulsory acquisition is taxable income. 2) That on the facts and in the circumstances of the case, the Id. Assessing Officer has erred in not allowing a relief of Rs,79,32,289/- wrongly shown as taxable income in the return of income. 3) That on the facts in the circumstances of the case, even ....
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....pensation, including interest, solatium and enhanced compensation in different years: * Assessment year 2002-03 Rs. 95,30,6697- * Assessment year 2004-05 Rs. 95,72,1897- * Assessment year 2008-09 Rs. 1,96,37,1427- It was observed by the AO that during the year under consideration, the appellant received an amount of Rs. 99,16,799/- as interest u/s.34 of the Land Acquisition Act, on the delayed payment of enhanced compensation along with Rs. 97,20,344/- which was received as additional compensation u/s.23 (1-A), 23(2) and 28 of the Land Acquisition Act. After considering the facts of the case, the AO observed that the appellant was eligible to avail the benefits u/s. 10(37) of the Act as the enhanced compensation was received by the appellant after 1/4/2004 and on fulfilling the other conditions, the enhanced additional compensation received by the appellant does not form a part of the total income and was not subjected to capital gains as per the specific provisions laid down u/s. 45(5) of the Income-tax Act, 1961. It was also observed by the AO that no benefit would be available to the appellant in respect of interest received u/s.34 of the Land Acquisition Act on the ....
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....d value of the land which is not the case in the matter of payment of interest under section 34. The court further goes on to say that interest under section 28 unlike interest under section 34 is an accretion to the value" hence it is a part of enhanced compensation or consideration which is not the case with interest under section 34 of the 1894 Act. The court very clearly has laid the guideline that only interest under section 34 of the 1894 Act is taxable received under section 28. When we took our submissions on 22nd November, 2010 explaining that the interest received by us was under section 28, the letter was refused to be accepted on the pretext that the order has already been passed whereas the order has been passed on 30th November, 2010. The supreme court has very clearly discussed in the case of Gurpreet Singh vs. Union of India as to when the interest will be considered u/s 28 and when it shall be considered u/s 34 of the Land Acquisition Act, 1894. Para 27 of the order says going by the principle and for the moment keeping out the scheme of the Land acquisition Act, it appears to us that on payment or deposit of the amount awarded by the collector in terms of secti....
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....990] 181 ITR 408 (SC). The Rama Bai's case and Ghanshyam HUF are quite apart in the sense that whereas Ghanshyam HUF talks of taxing the capital amount received under land Acquisition Act on receipt basis, Rama Bai's case talks of taxing interest under section 34 of the Act. Whereas, hitherto assessees in the cases of dispute, were not paying tax on the amount of land compensation which was taken care of by the Ghanshyam HUF case." 5.3 In the course of the appeal proceedings, the AR of the appellant filed the following on 8/5/2012 as under: "The Assessing Officer has gone ahead and decided on her own that the interest received by us is under section 34 of the land Acquisition Act, 1894 without giving us any reasonable opportunity of being heard or even asking us whether the interest received by us was under 28 or 34." In order to give an opportunity the undersigned put forth a query to the AR of the appellant to file categorically the fact as to whether interest on enhanced additional compensation was received u/s.34 or u/s.28 of the Land Acquisition Act. Vide letter dated 8/5/2012, the AR stated that an amount of Rs. 99,16,799/- was interest received during the....
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....s, on the other hand, the appellant filed a copy of the judgement passed by the Hon'ble Punjab & Haryana High Court in his own case. A perusal of the order revealed that the interest income was received u/s.28 of the Land Acquisition Act. Hence the finding of the AO that interest was received on enhanced compensation was u/s.34 of the said Act is incorrect. 5.4.2. The next issue involved is whether the interest income received u/s 28 of the Land Acquisition Act is taxable or exempt. The Hon'ble Supreme Court of India in the case of CIT vs. Ghanshyam HUF (2009) 315 ITR 1, held that interest received u/s 28 of the Land Acquisition Act, 1894 is exempt from Tax. Respectfully following the decision of the Hon'ble Apex Court in case of Ghanshyam HUF supra, I hold that the interest received by appellant u/s 28 of the Land acquisition Act is exempt and the addition made by the AO amounting to Rs. 20,60,810/- is hereby deleted." (C.1). At the time of hearing before us, the Ld. Departmental Representative (in short "DR") relied on the order of the AO. However, he was unable to point out any infirmity or defect or error in the order of Ld.CIT(A). On the other hand, the Ld. co....
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....y case, the assessee was not eligible to revise the return u/s 139(5) of I.T.Act as the return filed by the assessee was a belated return u/s 139(4) of the Act. It was for the first time before Ld.CIT(A) that the assessee took the plea that the aforesaid amount of Rs. 79,32,289/- was not taxable income. The Ld.CIT(A) directed the AO to reduce the taxable income by aforesaid Rs. 79,32,289/-. The relevant portion of the appellate order of Ld.CIT(A) is reproduced as under:- 6.1. "In the course of the appellate proceedings, the appellant inter alia objected the action of the AO for non computing the Income as per latest decision of Apex Court in the case of CIT vs. Ghanshyam Dass HUF, while filing the return of income the appellant included interest income of Rs. 79,32,289 as taxable. The AO accepted the Income declared by the appellant and made an addition of Rs. 20,60,810/- which is deleted by me in my this order. The grievance of the appellant is that due to the ignorance of law the appellant offered the exempt income for tax and paid the income tax on exempt interest income, which was received U/s 28 of the land acquisition act, 1894. In the remand report the AO has stated that t....
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....gly this ground of appeal is allowed." (C.2.1). Before us, at the time of hearing, the Ld. DR supported the second ground of appeal and relied on the assessment order. On the other hand, Ld. Counsel for the assessee strongly supported the order of Ld.CIT(A) and relied on the order of Ld.CIT(A). We have heard both sides patiently. We have also considered all materials on record. We have noticed that the return that was filed u/s 139 of the Act by the assessee was, being a belated return, a return filed u/s 139(4) of the Act. Had the assessee filed the return by due date, it would have been a return filed u/s 139(1) of the Act. Provisions regarding filing of revised return are contained in section 139(5) of the Act and its perusal shows that, while the assessee is permitted to file a revised return, if the original return was filed u/s 139(1) of the Act or was filed in response to notice u/s 142(1) of the I.T.Act. However, there is no permission u/s 139(5) for the assessee to file a revised return if the original return was filed belatedly u/s 139(4) of the Act. Thus, the return filed by the assessee u/s 139(5) of the Act is final qua the assessee, as far as claims beneficial to th....
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....3(2) of the Act. The provisions u/s 143(2) of the Act, as they stood at the relevant time before amendment by Finance Act, 2016 w.e.f 01.06.2016, are reproduced below:- 143(2). "Where a return has been furnished under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer or the prescribed income-tax authority, as the case may be, if, considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished." (C.2.2). From a perusal of the aforesaid provisions of section 143(2) of the Act, it is noticed that the purpose of assessment proceedings is to ensure that the assessee had not und....
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.... a much more advantageous position than had the return of the assessee not been selected for scrutiny in which case the "self-assessment" made by the assessee and return filed by the assessee would have become final. As we have discussed earlier such a situation is not permissible under law on careful perusal of section 143(2) of the I.T.Act. Reference to order of Hon'ble Apex Court in the case of CIT vs Sun Engineering Works (P.) Ltd.[1992] 198 ITR 297 (SC) is useful wherein Hon'ble Supreme Court held that since the proceedings under section 147 of the Act are for the benefit of the Revenue and not for an assessee, and are aimed at gathering the 'escaped income' of an assessee. Though the decision of Hon'ble Supreme Court in the case of CIT vs Sun Engineering Works (P) Ltd. [supra] was in the context of proceedings u/s 147 of the Act, the principle is applicable even for proceedings u/s 143(2) of the Act because, as we have seen before, on perusal of provisions u/s 143(2) of the Act, it can be readily inferred that the assessment proceedings u/s 143(2) of the Act are not meant for the benefit of the assessee but are for the benefit of Revenue only so that the AO is able to ensure ....
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....luded as income of the assessee in accordance with return filed by the assessee u/s 139(4) of the I.T.Act. Thus, second ground of appeal filed by the Revenue is allowed. (D). Third ground of appeal is regarding the benefit of indexation in respect of long term capital gain. The assessee had inherited a property which devolved on the assessee in F.Y.1987-88. The property was acquired by the previous owner in an earlier year. The relevant facts have been stated in paragraphs 5 to 5.5 of the assessment order and paragraphs 7 to 7.3.6 of the impugned order of Ld.CIT(A). The property has been sold by the assessee in this year and long term capital gain has arisen to the assessee. The dispute is whether the benefit of indexation, for the purpose of computation of long term capital gain, is allowable to the assessee from the F.Y. 1987-88 (as held by the AO) or from 1981-82 [as claimed by the assessee and allowed by the Ld.CIT(A) in the impugned order]. The Ld.CIT(A) has discussed the facts of the case and the legal position in detail in her impugned appellate order. She has relied on the order of the Hon'ble Delhi High Court in the case of Arun Shungloo Trust vs CIT [2012]. At the time o....