TaxTMI 
TaxTMI 
TaxTMI 
2023 (8) TMI 140
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....eting the addition made for interest received on enhanced compensation on account of compulsorily acquisition of Agriculture land even without Considering our detailed reply with so many ruling announced by the Honorable Apex Court and High court, Tribunal in this regard which clearly said that the Interest awarded to the Land owner on enhanced compensation by Apex court on compulsorily acquisition of his Agriculture Land as per section 28 of the Land acquisition act, 1894 is only an accretion to the value of land and not in the nature of interest and the same is liable to be treated as per the provision of section 45(5) read with section 10(37) of the I.T Act, 1961 and if the Original compensation is Taxable then the same will also be taxable and if original compensation is exempt u/s 10(37) on account of compulsorily acquisition of agriculture Land then the same will also be exempt because this interest has been awarded by the Apex court under the provision of section 28 of the Compulsorily Land acquisition act, 1894, a certificate issued by the Land Acquisition Officer about the nature of this interest has also submitted before the Ld. CIT(A), NFAC. Hence, this order of assessme....
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....ITA No. 1619/Del/2017 for AY 2018-19 submitted that the interest awarded to the land owner/ assessee on enhanced compensation by the Hon'ble Supreme Court under compulsory acquisition of his agricultural land as per section 28 of the Land Acquisition Act is only an assertion of the value of land and not in the nature of interest, therefore, same is liable to be treated as per provision of section 45(5)v) read with section 10(7) of the Income Tax Act, 1961 (for short the Act). 4. Replying to the above, the ld. Sr. DR, placing reliance on the judgement of the Hon'ble High Court of Punjab & Haryana, dated 19.02.2020, in CWP No.17971 of 2019 in the case Mahender Pal Narang vs. CBDT, contended that the interest received on compensation or enhanced compensation is to be treated as 'Income from other sources' and not under the head 'Capital gains.' However, he did not controvert that the impugned amount is interest received by the assessee on enhanced compensation. 5. Placing rejoinder to the above, the ld. AR drew our attention to the order of the ITAT Delhi Bench 'F' in the case of Ram Kishan Kishan vs. ITO, dated 02.12.2020 in ITA No.5391/Del/2017 for AY 2014-15, especially to pa....
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.... 181 ITR 400 held that arrears of interest computed on delayed or enhanced compensation shall be taxable on accrual basis. This has caused undue hardship to the taxpayers. With a view to mitigate that hardship provisions of Section 145A were amended to provide that the interest received by an assessee on compensation or enhanced compensation shall be deemed to be income for the year in which it was received, irrespective of the method of accounting followed by the assessee. Further amendment u/s 56 was also made to provide that such income shall be taxable as income from other sources in the year in which it is received. However such amendment was not in respect to the decision of the honourable Supreme Court in case of Ghanshyam HUF 315 ITR 1. Despite the above changes made u/s 14 5A and u/s 56 (2) with effect from 1 June 2010, so as to tax the interest on compensation or enhanced compensation as income from other sources u/s 56 in the year of receipts, the judicial precedents held that the interest awarded to landowners u/s 28 of the land acquisition act, 1894 on enhanced compensation is still a part of compensation and is a capital receipt taxable Under the head capital gains. S....
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....taking into consideration judgement of the Hon'ble Supreme Court in the case of Ghanshyam HUF (supra) and all subsequent judgements on the issue including the judgement of the Hon'ble Punjab & Haryana High Court in the case of Mahender Pal Narang (supra), it was held that the interest received by the assessee on enhanced compensation u/s 28 of the Land Acquisition Act being part of the enhanced compensation shall be treated as tax free in the case of an individual u/s 10(37) of the Act, if the transfer is of agricultural land. 8. In view of the above order of the coordinate Bench of the ITAT, Delhi, when we evaluate the grievance of the assessee, then, it is amply clear that in the present case also the ld.CIT(A) upheld the assessment order wherein following the judgements of the Hon'ble Punjab & Haryana High Court in the case of Mahender Pal Narang (supra), the addition made by the AO was confirmed. I also note that the AO did not allow benefit of the section 10(37) of the Act to the assessee, however, he allowed 50% of deduction on total interest received, u/s 28 of enhanced compensation by following the provisions of section 57(iv) of the Act and treated the remaining 50% as 'I....