TaxTMI 
TaxTMI 
2025 (4) TMI 867
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.....2023 of the Income Tax Appellate Tribunal that remands the issue of taxability of such interest to the Assessing Officer with a direction that while the interest amounts received @ 9% p.a will qualify for exclusion from total income under Section 10 (37) of the Income Tax Act [hereinafter referred to as the "I.T. Act"], the interest amounts received @ 15% p.a will be assessable as 'Income from other sources' under Section 56 (2) (viii) of the I.T. Act. 3. I.T.A. No. 60 of 2024 is preferred against the order dated 19.04.2024 of the Income Tax Appellate Tribunal that dismissed an appeal preferred by the appellant against an order of the Assessing Officer under Section 154 of the I.T. Act whereby he had dismissed a rectification application filed by the assessee and held that the interest received by the assessee on the enhanced compensation for the agricultural land acquired from him would be taxable under the head 'Income from other sources' under Section 56 (2) (viii) of the I.T. Act. 4. The assessees in both the appeals had received compensation as fixed by the Land Acquisition Officer [LAO] for the agricultural lands acquired from them by the State. Immediately thereafter,....
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....nd 15% interest received and one received under Section 28 of the Land Acquisition Act, more so in view of certificate issued by the learned Tahsildar. iii. In the facts and circumstances of the case, ought not the Tribunal have allowed the application filed under Section 154 of the Act more so, when the several High Court have taken a view in consonance with the Application filed by the Appellant. 6. We have heard the learned senior counsel Sri. Anil D. Nair, assisted by Adv. Sri. Aaditya Nair for the appellants in these appeals and Sri. P.G. Jayashankar, the learned Standing Counsel for the Income Tax Department. 7. On a consideration of the rival submissions and after perusing the precedents relied upon by the learned counsel, we feel that a discussion of the issue must be preceded by an examination of the relevant statutory provisions under the I.T. Act. "Section 2(28 A): Definitions. 2. In this Act, unless the context otherwise requires,- (28A) "interest" means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee ....
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....h such compensation or part thereof, or such consideration or part thereof, was first received]; and (b) the amount by which the compensation or consideration is enhanced or further enhanced by the court, Tribunal or other authority shall be deemed to be income chargeable under the head "Capital gains" of the previous year in which such amount is received by the assessee: [Provided that any amount of compensation received in pursuance of an interim order of a court, Tribunal or other authority shall be deemed to be income chargeable under the head "Capital gains" of the previous year in which the final order of such court, Tribunal or other authority is made;] (c) where in the assessment for any year, the capital gain arising from the transfer of a capital asset is computed by taking the compensation or consideration referred to in clause (a) or, as the case may be, enhanced compensation or consideration referred to in clause (b), and subsequently such compensation or consideration is reduced by any court, Tribunal or other authority, such assessed capital gain of that year shall be recomputed by taking the compensation or consideration as so reduced by s....
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....by any class of assessees or in respect of any class of income. (3) Where the Assessing Officer is not satisfied about the correctness or completeness of the accounts of the assessee, or where the method of accounting provided in sub-section (1) has not been regularly followed by the assessee, or income has not been computed in accordance with the standards notified under sub-section (2), the Assessing Officer may make an assessment in the manner provided in section 144. Section 145B: Taxability of certain income. 145B. (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 i....
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....ction 28 or Section 34 of the LAA, would partake the character of the principal compensation itself since it is essentially paid to compensate the assessee for the loss he suffered on account of not having the use of the principal compensation amount at the time when it fell due. We cannot lose sight of the fact that compensation amounts paid to a person towards compulsory acquisition of his property traces its roots to the constitutional obligation to pay such compensation under Article 300A of the Constitution. Recent judicial pronouncements have also recognised the right to property as a human right. In Dharnidhar Mishra (D) & Anr. v. State of Bihar & Ors. [(2024) 10 SCC 605] the court pointed out that although the right to property ceased to be a fundamental right by the Constitution (44th Amendment) Act, 1978, it continues to be a human right in a welfare state, and a constitutional right under Article 300A of the Constitution. Accordingly, the State cannot dispossess a citizen of his property except in accordance with the procedure established by law. The court went on to observe that the obligation to pay compensation, though not expressly included in Article 300A, can be in....