Additional Compensation and Interest for Compulsory Acquisition of Agricultural Land Exempt Under Section 10(37)

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....The ITAT ruled that additional compensation received for compulsory acquisition of agricultural land by the Gujarat Government, along with interest component, is exempt under s.10(37) of the Act. Since the acquired land was agricultural, it does not qualify as a capital asset under s.2(14). Following precedents established in Lakshmiana and Movaliya Bhikhubhai Balabhai, the Tribunal held that interest received on enhanced compensation under s.28 of Land Acquisition Act, 1984 is eligible for exemption under s.10(37). The ITAT further determined that interest payments under s.28 of the 1894 Act constitute interest as envisaged under s.145A and cannot be treated as income from other sources. The assessee's appeal was allowed.....