TaxTMI 
TaxTMI 
TaxTMI 
2024 (12) TMI 704
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....ad with Section 144B of the Act, wherein by following Judgment of the Hon'ble Apex Court in the case of CIT vs. Ghanshyam (HUF) and ITO, Ward 3(4), Gurgaon Vs. Rameshwar, the Assessing Officer held that no addition is required to be made on the interest received by the Assessee on the enhanced compensation. The Ld. PCIT vide order dated 01.03.2024, set aside the Assessment Order and directed the Assessing Officer to pass a fresh Assessment Order. 3. Aggrieved by the Order dated 01.03.2024 of the Ld. PCIT passed under Section 263 of the Act, the Assessee preferred the present appeal on the grounds mentioned above. 4. The Ld. Counsel for the Assessee submitted that the question as to whether receipt of interest of related to the additional compensation granted under Land Acquisition Act is a part of exempt income u/s 10(37) of the Act or not is a debatable issue, the A.O. while framing the Assessment u/s 143(3) of the Act has taken plausible view based on the decisions rendered by various Courts, which cannot be held to be erroneous while exercising power u/s 263 of the Act by the PCIT. The Ld. Counsel relied on following judicial pronouncements and sought for allowing the Appe....
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....udgment of the Jurisdictional High Court dated 08/04/2024 in ITA No. 769/2023 and CM APPL 65057/2023 in the case of Principal Commissioner of Income Tax 10 Vs. Inderjit Singh Sodhi (HUF), thus, submitted that the Appeal of the Assessee deserves to be dismissed. 6. We have heard both the parties and perused the material available on record. The case of the Assessee was selected for complete scrutiny to verify issue of 'Refund Claim'. On noticing that the Assessee has claimed refund of Rs. 11,58,591/- as against prepaid tax of Rs. 11,60,650/-, the A.O. asked the Assessee to furnish details and to substantiate his claim. The Assessee submitted before the A.O. that he has received interest on enhanced compensation on compulsory acquisition of agriculture land u/s 28 of the Land Acquisition Act, which is exempt income. The Assessee has also produced copy of Khasra/Khatauni and Land Acquisition order in support of his claim. Further the Assessee has also relied on the decision of the Hon'ble Supreme Court in the case of CIT Vs. Ghanshyam (HUF) and ITO Ward 3(4), Gurgaon Vs. Rameshwar which has further been reiterated in the case of Union of India Vs. Hari Singh & Others in (Civil Ap....
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....o refer to Sections 28 and 34 of the Act of 1894, which deal with the payment of interest on compensation, and read as under:- "28. Collector may be directed to pay interest on excess compensation:- If the sum which, in the opinion of the court, the Collector ought to have awarded as compensation is in excess of the sum which the Collector did award as compensation, the award of the Court may direct that the Collector shall pay interest on such excess at the rate of [nine per centum] per annum from the date on which he took possession of the land to the date of payment of such excess into Court."- *** "34. Payment of interest. When the amount of such compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon at the rate of nine per centum per annum from the time of so taking possession until it shall have been so paid or deposited. Provided that if such compensation or any part thereof is not paid or deposited within a period of one year from the date on which possession is taken, interest at the rate of fifteen per centum per annum shall be payable from the date of expiry of the said....
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....on or on enhanced compensation referred to in [sub-section (1) of Section 145-B].]" 23. For the sake of clarity, Section 145-B of the Act is reproduced as under:- "[145-B. Taxability of certain income.--(1) Notwithstanding anything to the contrary contained in Section 145, the interest received by an assessee on any compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the previous year in which it is received. (2) Any claim for escalation of price in a contract or export incentives shall be deemed to be the income of the previous year in which reasonable certainty of its realisation is achieved. (3) The income referred to in sub-clause (xviii) of clause (24) of Section 2 shall be deemed to be the income of the previous year in which it is received, if not charged to income-tax in any earlier previous year.]" 24. A conjoint reading of the aforementioned provisions i.e., Sections 56(2)(viii) and 145-B of the Act vividly stipulate that the income received by way of interest on compensation or on enhanced compensation shall be chargeable to tax under the head „income from other sources‟. Therefore, since the position with r....
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....e said decision read as under:- "8. The controversy is no longer res integra. This question was considered elaborately by this Court in Sham Lal Narula (Dr) v. CIT [(1964) 53 ITR 151 : AIR 1964 SC 1878]. Therein, K. Subba Rao, J., as he then was, considered the earlier case-law on the concept of "interest" laid down by the Privy Council and all other cases and had held at p. 158 as under: "In a case where title passes to the State, the statutory interest provided thereafter can only be regarded either as representing the profit which the owner of the land might have made if he had the use of the money or the loss he suffered because he had not that use. In no sense of the term can it be described as damages or compensation for the owner's right to retain possession, for he has no right to retain possession after possession was taken under Section 16 or Section 17 of the Act. We, therefore, hold that the statutory interest paid under Section 34 of the Act is interest paid for the delayed payment of the compensation amount and, therefore, is a revenue receipt liable to tax under the Income Tax Act." 9. This position of law has been consistently reiterated by this Court in t....
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....all be allowed under any other clause of this section." 21. The Assessing Officer in I. T. A. No. 132 of 2018 where the assessee had received Rs. 11,30,561 as interest income, held that the interest payment received on compensation/enhanced compensation to the tune of Rs. 5,65,280 (50 per cent. of Rs. 11,30,561) is taxable as income from other sources as per provisions of sections 56(2)(viii) read with 57(iv) and section 145A(b) of the Act for the assessment year 2010-11. The Commissioner of Income-tax (Appeals) and the Tribunal had upheld the order of the Assessing Officer in that regard. 22. No illegality or perversity could be pointed out by learned counsel for the assessee in the concurrent findings of fact recorded by 17:00:34 the authorities below which may warrant interference by this court. No question of law, much less, substantial question of law arise in these appeals. 23. Accordingly, finding no merit in the appeals, the same are hereby dismissed." [Emphasis supplied] 29. Considering the foregoing discussion, we affirm the concurrent findings of the AO and CIT(A) and find that the view taken by the ITAT is unsustainable, as the same is based on an incorrect ap....