2014 (3) TMI 1199

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....ld that interest of Rs.17,78,877/- received u/s 28 of the Land Acquisition Act, 1894, on enhanced compensation, was not part of compensation but liable to tax under the head 'Income from other sources'. 2. That the ld. CIT(A), went all the way wrong to hold that interest u/s 28 of I.A.Act, 1894 was for delay in granting the compensation/addl. compensation, a view apparently opposed to the clear mandate of Hon'ble Apex Court in the case of Ghanshyan (supra), holding that the said interest, unlike interest u/s 34 of the I.A.Act,1894, was an accretion to the value and hence part of enhanced compensation. 3. That the ld. CIT(A), also fell into grave error in endorsing the ITO's view and to hold that Hon'ble Apex Court decision supra, was no....

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....come declared in his original return. The assessee has also shown total receipts of Rs.28,90,019/- as an exempt income u/s 10(37) of the Income Tax Act, 1961 on account of "Agricultural Land Compulsory acquired".The assessee has also filed a copy of Form No.16 dated 16.02.2010 issued by the Collector Land Acquisition, Colonization Department, Chandigarh, a perusal of which indicates that the assessee has been awarded enhanced compensation amounting to Rs.11,11,253/- and interest on enhanced compensation amounting to Rs.17,78,766/- on account of agricultural land measuring 36 Kanals 10 Marlas, situated at Vill. Awankha, Dinanagar, Distt. Gurdaspur acquired by the aforesaid department and tax of Rs.1,77,877/- has accordingly bee deducted at s....

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...., 1894, received by the assessee forms part of compensation u/s 45(5) of the Act and also claimed to be exempt under sub section 37 of section 10 of the Act. Since the interest awarded by the acquisition authorities to the assessee on account of compulsory acquisition of agricultural land at Rs.17,78,766/- is chargeable to tax by the amendment section 145A(b) of the Act under the head 'Income from other sources' w.e.f. 01.04.2010 (A.Y. 2010-11), the assessee has categorically been asked to explain vide this office show cause notice dated 16.10.2012 as to why an addition of Rs.8,89,383/- i.e. total interest awarded at Rs.17,78,766/- less deduction of Rs.8,89,383/- allowable under clause (iv) of section 57 of the Act should not be made." 3. ....

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....to the assessee amounting to Rs.17,78,766/- by the Collector Land Acquisition Colonization Department, Chandigarh is chargeable to tax by virtue of amendment made by the Finance (No.2) Act, 2009 which is applicable w.e.f. from 01.04.2010 (A.T.2010-11) and as discussed above, the ratio of decision of the Apex Court in the case titled as CIT, Faridabad vs. Ghanshyam (HUF) (2009) 182 Taxman 368 (SC) does not apply in the assessee's case as the assessment year involved in the said case was 1999-2000 i.e.. prior to the amendment of provision of section 145(b) as well as amendment of clause (viii) of sub section (2) of section 56 of the Act by the Finance (No.2) Act,2009. Having regard to the above referred facts, an addition of Rs.8,89,383/- is ....

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....t we have analysed the provisions of section 23, 23(IA), 23(2), 28 and 34 of the 1894 Act. As discussed hereinabove, section 23(IA) provides for additional amount. It takes care of increase in the value @ 12% per annum. Similarly, u/s 23(2) of the 1894 Act, there is a provision for solatium which also represents part of enhanced compensation. Similarly, section 28 empowers the Court in its discretion to award interest on the excess amount of compensation over and above what is awarded by the Collector. It includes additional amount u/s 23(IA) and solatium u/s 23(2) of the said Act. Section 28 of the 1894 Act applies only in respect of the excess amount determined by the Court after reference u/s 18 of the 1894 Act. It depends upon the claim....

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....H). ii) Jagmal Singh vs. State of Haryana Civil Revision No. 7740 of 2012 date of decision - 18 July, 2013 iii) CIT vs. Keshwa Devi (2012) 19 Taxman 220 - HP iv) CIT vs. Joginder Singh appeal No.-120-2008 order dated 30th Oct.2012 - HP. 7. The Ld. DR, on the other hand, relied upon the orders of both the authorities below. 8. We have heard the rival contentions and perused the facts of the case. There is no dispute to the fact that the enhanced compensation is awarded by the Additional District Judged vide his order dated 14.03.2008 under section 28 of the Land Acquisition Act, as has been affirmed by the AO in his order reproduced hereinabove. It is also not under dispute that the Hon'ble Supreme Court, in the case of CIT vs. Ghanshya....