TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 38
X X X X Extracts X X X X
X X X X Extracts X X X X
....28 of the Land Acquisition Act wherein the Hon'ble Punjab & Haryana H.C has consistently taking a view that it is an income to be treated under the head 'income from other sources'. 2. Back in the year 1996 on 12* September, the Hon'ble Apex Court while disposing the SLP against a decision of the Hon'ble Punjab & Haryana High Court in the case of Bikram Singh and Ors. Vs Land Acquisition Collector and ors [1997] 224 ITR 551 [SC] on the issue of payment of income tax on the delayed interest amount recovered under the Land Acquisition Act 1894, interpreted the legal issue as to whether the delayed interest on the compensation paid under the LAA is chargeable to income tax under Section 4 & 5 of the Income Tax Act, 1961. After considering the provision of Section 2[28A], 194A and previous decisions on the issue laid down the proposition that interest received as income on delayed payment of the compensation determined under Section 28 or 31 of the Acquisition Act is a taxable event being a revenue receipt. [Ref: Para 10 of the order]. 3. The interpretation of the above judgement of the Hon'ble Supreme Court in the case of Bikram Singh [Supral got the legisl....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lar number 5 of 2010 where all interest received on compensation or on enhanced compensation shall be assessed as income from other sources in the year in which it is received. It further held that in view of the amendment to the provisions of the income tax act decision of the Hon'ble Supreme Court in the case of Ghanshyam does not come to the rescue of the assessee. It further held that the language of the income tax act with respect to the chargeability of interest as income is plain, simple and unambiguous and therefore no scope of taking outside aid for giving any interpretation to this subsection or clauses are required. Thus it held that interest received on compensation or enhanced compensation is to be treated as income from other sources and not under the head capital gains. Special leave petition against this decision has been dismissed by the Hon'ble Supreme Court on 04.03.2021. Since the AO of the present case falls under the jurisdiction of Hon'ble P. & H. High Court, therefore, ratio of Hon'ble Punjab & Haryana High Court has a binding precedent in the present case. Further in a recent decision the Hon'ble Delhi High Court, in ITA no. 769/....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the interest received by the assessee u/s 28 of the Land Acquisition Act is part of Compensation and is exempt us 10(37) of the Act in View of the judgment of the Hon'ble Apex Court in the case of CIT vs. Ghanshyam Dass & V Ors. 315 ITR 1(SC) followed by the Hon'ble Apex Court in the case of CIT vs. Gobind Bhai Mamaiya. 367 ITR 498(SC). The appellant, therefore, contended that the Id AO treated the interest on enhanced compensation as interest income and has taxed it as interest income received u/s 57 (iv) of the Act read with section 145A of the Act whereas the interest on enhanced compensation has been held by the Hon'ble Apex court as part of the compensation and is not interest income as has been treated by the AO. 7.1.2 All the facts of the case, Grounds of appeal, statement of facts, online submissions of the appellant and the case laws cited and the assessment order are considered. The submission of the appellant is examined. It is noted that the AO has discussed this issue in detail in the assessment order at para number 4 to 16 after discussing findings of various courts on the issue and concluded that, "Keeping in view above the decision of Hon'ble j....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee has concealed the particulars of his income to the extent of Rs. 81,90,000/- penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961 read with section 274 are being initiated separately". 7.1.3 In view of the above, and considering the latest decision of Hon'ble Delhi High Court in the case of Pr. CIT VS Inderjit Singh Sodhi (HUF), ITA 769/2023 & CM APPL 65057/2023, order dated 08.04.2024 wherein the Hon'ble Court has decided as following after discussing the various case laws on the issue: "1. The present appeal involves an examination of the taxability of the interest component, earned on compensation or enhanced compensation, ordered under Land Acquisition Act, 1894 ["Act of 1894"]. 2. The instant appeal has been preferred by the Revenue against the order passed by the Income Tax Appellate Tribunal ["ITAT"] dated 19.06.2020, whereby, the ITAT deleted the addition made by the Assessing Officer ["AO"] under Section 56(2)(viii) of the Income Tax Act, 1961 ["Act"] for the Assessment Year ["AY"] 2016-17. 3. We may note that vide order dated 15.12.2023, we had briefly noticed the substantial questions of law arising in the present appeal in terms of paragrap....