TaxTMI 
TaxTMI 
2023 (2) TMI 459
X X X X Extracts X X X X
X X X X Extracts X X X X
....g from the record of both the authorities below whether the said return of income processed u/s. 143(1) of the Act or completed assessment under scrutiny, but however, it is noted the respondent-revenue issued notice u/s. 148 of the Act requesting the assessee to file return of income. The assessee requested the AO to treat the original return of income as filed on 07-12- 2011, in response to the said notice u/s. 148 of the Act. According to the AO, the assessee received enhanced compensation of Rs.21,22,110/- and interest on compensation of Rs.48,25,620/- from the Special land Acquisition Officer, M.I.W., Latur. The interest received on such enhanced compensation is liable to be taxed in terms of amended provision u/s. 56 of the Act w.e.f. 01-04-2010, further thereto, amendment of section 145A of the Act. We note that the assessee contended that the interest received u/s. 28 of the Land Acquisition Act is nothing but part of enhanced value of land which is exempt from tax in terms of the decision of Hon'ble Supreme Court in the case of CIT Vs. Ghanshyamdas (HUF) reported in 315 ITR 1 (SC). The AO was of the opinion that the interest received by the assessee on the compensation is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....imply proceeded in view of amendment carried out to provision u/s. 56 and 145 of the Act without there being any concrete evidence in support of his view, in our opinion, is not justified. 5. Coming to the First Appellate order which is impugned before us, we note that the CIT(A) simply confirmed the order of AO by holding that the decision as relied on by the assessee is not applicable. On perusal of the impugned order, it is noted that the CIT(A) did not refer any detail concerning the addition made by the AO under the head income from other sources. Before holding the decision as relied on by the assessee in respect of alleged interest u/s. 28 of the Act is not chargeable to tax, the CIT(A) ought to have appreciated the facts and circumstances of the case leading to acquisition, grant of excess compensation and interest if any u/s. 28 and 34 of the Act. On careful examination of the impugned order, we note that the CIT(A) held the ratio laid down by the Hon'ble Supreme Court in the case of Bikram Singh Vs. Land Acquisition Collector reported in 224 ITR 551 (SC) is applicable to the facts on hand and confirmed the order of AO. We note that as discussed above in order to come to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....passes order u/s. 11 of the Land Acquisition Act. Any person interested who has not accepted the award passed by the Collector may, by written application to the Collector requesting the matter be referred for determination of Court u/s. 18 of the Land Acquisition Act in respect of amount of compensation etc. within six weeks from the date of the Collector's award. It is pertinent to note that granting of additional amount of compensation is the subject matter under reference u/s. 18 of the Land Acquisition Act. We note that section 25 explains amount of compensation awarded by the Court not to be lower than the amount awarded by the Collector. If Court opines the Collector ought to have awarded as compensation in excess of the sum already awarded as compensation, may direct the Collector to pay interest on such excess compensation @ 9% from the date of possession to the payment of such excess compensation into the Court. Therefore, the main point to be decided in the present appeal is the interest on excess compensation from the date of possession to date of payment into the Court is part and parcel of compensation? 8. Vide order dated 29-01-2018, the Co-ordinate Bench of this Tr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on'ble Supreme Court rendered by three Judges Bench in the case of T.N.K. Govindaraju Chetty reported in 66 ITR 465 and insertion of 56(2)(viii) through Finance Act, 2009 w.e.f. 01-04-2010 held the law laid down by the Ghanshyam (HUF) (supra) is not applicable and interest received on enhanced compensation referred to in clause (b) of section 145A is income from other sources, chargeable to tax. 13. Vide order dated 27-08-2013, the Division Bench i.e. two Judges Bench of Hon'ble High Court of Bombay at Aurangabad in batch of cases lead case being Shivajirao in Writ Petition No. 5402 of 2013 decided a dispute whether in facts TDS has been deducted only on amount of compensation or then on amount of interest also. The Hon'ble High Court while dealing the said issue referred to the decision of Hon'ble Supreme Court in the case of Bikram Singh (supra) and Ghanshyam (HUF) (supra) and pleased to hold by following the decision of larger Bench in the case of Bikram Singh (supra) held the interest paid u/s. 28 is not by way of any charge on compensation determined u/s. 23(1) of the Land Acquisition Act. 14. Vide order dated 31-03-2016, the Division Bench i.e. two Judges Bench of Hon'ble H....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the award or in case of Appeal, till the judgment of the High Court in such Appeal, would not be exigible to tax, not being an income. Further, categorically held the said position would not change on account of clause (b) of section 145A of the Act as it stood at the relevant time amended by Finance Act, 2009 which provision now finds place in sub-section (1) of section 145B of the Act. Neither clause (b) of section 145A, as it stood at the relevant time, nor clause (viii) of subsection (2) of section 56 of the Act make the interest chargeable to tax whether such interest is income of the recipient or not vide para 57 of the said decision. 16. Vide order dated 16-07-2009, two Judges Bench of Hon'ble Supreme Court in the case of Ghanshyam (HUF) (supra) observed that the provisions of Land Acquisition Act 1894, awards "interest" both as an accretion in the value of the lands acquired and interest for undue delay, interest u/s. 28 of Land Acquisition Act is an accretion to the value of land, hence, it is a part of enhanced compensation or consideration. Interest u/s. 34 is only for delay in making payment after the compensation amount is determined. Having said that opined while d....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of Smt. Ramabai reported in 181 ITR 400 (SC), taking into account Circular No. 5/2010 dated 03-06- 2010 issued by the CBDT. It is pertinent to note the law laid down by the Hon'ble Supreme Court in the case of Ghanshyam (HUF) (supra) held, interest u/s. 28 is not like interest granted u/s. 34, the interest granted u/s. 28 is an accretion to the value of land and is a part of enhanced compensation. Further, it also held additional amount granted u/s. 23(1A) and solatium u/s. 23(2) of the Land Acquisition Act is also forms part of enhanced compensation. The Hon'ble High Court of Bombay in view of law laid down by the Hon'ble Supreme Court in the case of Ghanshyam (HUF) (supra) which was followed by the Hon'ble High Court of Gujarat in the case of Movaliya Bhikhubhai Balabhai (supra) observed there are three crucial dates in the context of determination of interest under motor accident claims i.e. date of accident, date of filing of the claim petition and date of passing of the award by Claims Tribunal, while observing so, held the AO had committed an error in levying tax on the interest components of the compensation awarded to the claimant till the date of judgment of the High Cour....