TaxTMI 
TaxTMI 
2023 (11) TMI 704
X X X X Extracts X X X X
X X X X Extracts X X X X
....i) CIT vs. Ghanashyam (HUF) (2009) 315 ITR 1 (SC) (ii) CIT vs. Govindbhai Mamaiya (2014) 367 ITR 498 (SC) (iii) UOI vs. Hari Singh (2018) 91 Taxmann.com 20 (SC) 3. For the sake of ready reference, one such order of the Tribunal in the case of Smt Ramesh Bai vs. ITO, Bhiwani in ITA no. 4193 to 4195/Del/2019 is reproduced herewith:- 1. These three appeals are filed by different assesses of the same family against different orders of the ld. Commissioner of Income Tax (Appeals)-5, Ludhiana [hereinafter referred to CIT (Appeals)] dated 25.01.2019 and 12.03.2019 for assessment year 2013-14. 2. The only common issue in all these appeals is as to whether the interest received under Section 28 of the Land Acqu....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... compensation is received by the assessee as their land was agricultural land. The compensation was received in respect of agricultural land belonging to the assessee which had been acquired by the state government. Therefore, the same comes under the purview of Section 28 of the Land Acquisition Act. The Bangalore Tribunal in case of Shri Vasavaraja M Kudarikannur (supra) held as under:- "11. We have heard the rival submissions of the ld. DR, who relied upon the order of the AO. We have considered the submissions of the ld. DR. It is not disputed by the AO that the land acquired was agricultural land and the conditions laid down u/s. 10(37)(i) to (iv) are applicable to the land which is in question which was compulsorily acquired.....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder section 197(1) of the Income Tax Act, 1961 (Act) for deciding the tax liability of interest and to issue a certificate as to NIL tax liability. The application was rejected on the ground that the interest amount on the delayed payment of ITA Nos. 1747 & 1750/Bang/2017 compensation and enhanced value of compensation is taxable as per the provisions of section 57(iv) read with sections 56(2)(viii) and 145A(b) of the Act under the head income from other sources. Being aggrieved by such order, the Assessee filed writ petition before Hon'ble Gujarat High Court. The question before the Court was whether interest awarded u/s. 28 of the Act of 1894 is akin to compensation and chargeable to tax u/s. 45(5) of the Act or under the head "Incom....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n or on enhanced compensation referred to in clause (b) of section 145A which is chargeable as income from other sources. The first respondent Income Tax Officer seeks to tax the interest received by the ITA Nos. 1747 & 1750/Bang/2017 petitioner under section 28 of the Act of 1894 as income from other sources under section 56(2)(viii) read with section 145A(b) of the I.T. Act. In the opinion of this court, in the light of the law laid down by the Supreme Court in the case of Ghanshyam (HUF) (supra), the interest received under section 28 of the Act of 1894 would not fall within the ambit of the expression "interest" as envisaged under section 145A(b) of the I.T. Act, inasmuch as, the Supreme Court in the above decision has held that interes....
X X X X Extracts X X X X
X X X X Extracts X X X X
....come from other sources", shall be computed in accordance with either cash or mercantile ITA Nos. 1747 & 1750/Bang/2017 system of accounting regularly employed by the assessee. Further the Hon'ble Supreme Court in the case of Smt. Rama Bai v. CIT (1990) 84 CTR (SC) 164 : (1990) 181 ITR 400 (SC) has 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. 46.2 With a view to mitigate the hardship, section 145A is amended to provide that the interest received by an assessee on compensation or enhanced compensation shall be deemed to be his income for the year in which it was received, irrespective of the method of accounting foll....
X X X X Extracts X X X X
X X X X Extracts X X X X
....cter of compensation, it does not fall within the ambit of the expression "interest" as contemplated in section 145A of the I.T. Act. The first respondent - Income Tax Officer was, therefore, not justified in refusing to grant a certificate under section 197 of the I.T. Act to the petitioner for non-deduction of tax at source, inasmuch as, the petitioner is not liable to pay any tax under the head "income from other sources" on the interest paid to it under section 28 of the Act of 1894. 14. The petitioner had earlier challenged the communication dated 9th February, 2015 whereby its application for a certificate under section 197 of the I.T. Act had been rejected, and subsequently, tax on the interest payable under section 28 of th....