TaxTMI 
TaxTMI 
2021 (2) TMI 883
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....tice u/s 148 of the Act on the ground that the interest income received by the assessee on enhanced compensation on compulsory acquisition has escaped assessment. The assessee did not file fresh return in response to notice u/s 148 of the Act, however, requested to treat the original return filed as return filed in response to notice u/s 148 of the Act. Accordingly, AO issued notice u/s 143(2) and 142(1) calling for information and details. In response thereof, the Authorised Representative (AR) of the assessee appeared before the AO and submitted reply stating that the assessee received the interest amounting to Rs. 6,74,61,917/- along with the enhanced compensation from HUDA for its land acquired in the year 1990 and as per the law laid down by the Hon'ble Supreme Court in the case of Ghanshyam HUF 315 ITR1(SC), interest received on enhanced compensation is exempt u/s 10(37) of the Act. The AO rejected the contention of the assessee holding that exemption u/s 10(37) of the Act is allowable in respect of capital gains arising from transfer of agricultural land through compulsory acquisition and not in respect of interest thereon. Accordingly, AO passed Assessment Order and made ad....
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....e appeal is heard and disposed off." 5. Before us, the Ld. Departmental Representative (DR) relying on the assessment order passed by the AO submitted that provisions of section56(2), 57(iv) and 145A have been amended w.e.f. assessment year 2010-11 and hence, the interest on compensation or enhanced compensation is chargeable to tax under the head 'income from other sources'. The Ld. DR further submitted that since the impugned order is not in accordance with the judgments of the Hon'ble Punjab and Haryana High Court in the case of Manjeet Singh vs. Union of India 237 Taxman116 (P&H) and CIT vs. Prem Singh CM No. 27928-29-CII-2010, the same is liable to be set aside. 6. On the other hand, the Ld. Counsel for the assessee supporting the order passed by the Ld. CIT(A) submitted that the Ld. CIT(A) has passed the impugned order by following the judgment of the Hon'ble Supreme Court in the case of Ghanshyam ('HUF') (supra), wherein, it has been held that the interest received on enhanced compensation through court is in the nature of compensation. Hence, there is no infirmity in the order passed by the Ld. CIT(A) to interfere with. The Ld. Counsel further pointed ....
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.... of Ghanshyam (HUF) (supra) holding the same to be in the nature of compensation itself. The Court also dealt with the other aspect namely, the year of tax and answered this question by holding that it has to be tested on receipt basis, which means it would be taxed in the year in 8 which it is received. The said findings given in the case of Ghanshyam (HUF) (supra) have been reiterated by the Hon'ble Supreme Court in the case of GovindbhaiMamaiya (supra) observing as under: "In so far as the second question is concerned, that is also covered by another judgment of this Court in Commissioner of Income Tax, Faridabad vs. Ghanshyam (HUF) reported in (2009) 8 SCC 412, 6 albeit, in favour of the Revenue. In that case, the court drew distinction between the "interest" earned under Section 28 of the Land Acquisition Act and the "interest" which is under Section 34 of the said Act. The Court clarified that whereas compensation given to the assessee of the land acquired would be 'income', the enhanced compensation/consideration becomes income by virtue of Section 45(5)(b) of the Income Tax Act. The question was whether it will cover "interest" and if so, what would be ....
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....is is not permissible." 9. The Ld. counsels for assessee has further brought our attention the latest decision of the Hon'ble Supreme Court in the case of CIT Vs. Chet Ram (HUF) dated 12.9.2017 in Civil Appeal No.13053/2017 wherein also the Hon'ble Supreme Court has again reiterated the proposition laid down in the case of Ghanshyam (HUF) (supra), which we find has been further reiterated in the case of Union of India vs. Hari Singh & others in Civil Appeal No. 1504 of 2017 dated 15.9.2017, as under: 9 "(2) While determining as to whether the compensation paid was for agricultural land or not, the Assessing Officer(s) will keep in mind the provisions of Section 28 of the Land Acquisition Act and the law laid down by this Court in 'Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF)' [2009 (8) SCC 412] in order to ascertain whether the interest given under the said provision amounts to compensation or not." 9.1 The said decision as rightly pointed out by the Ld. counsel for assessee have been rendered by the Hon'ble Apex Court subsequent to the decision passed by the Hon'ble Jurisdictional High Court in the case of Manjeet Sing....