TaxTMI 
TaxTMI 
2014 (3) TMI 1199
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....1(SC), has committed a grave legal error to hold 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 vie....
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....e from other sources", Agricultural Income of Rs.1,58,455/- for rebate purposes in addition to income 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. Gurdaspu....
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....ich it has been stated that interest on enhanced compensation awarded u/s 28 of the Land Acquisition Act, 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 d....
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....on enhanced compensation. After taking into consideration the facts of the case referred supra, interest awarded 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 th....
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....ued of the land which is not the case in the matter of payment of interest u/s 34." It is to answer the above questions that 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 ....
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....unsel for the assessee relied upon the issue on the decisions of various courts of law: i) CIT vs. Smt. Parkash Kaur & Others (2011) 330 ITR 332 (P&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,....