TaxTMI 
TaxTMI 
2024 (8) TMI 1607
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....mpensation on acquisition of agriculture land U/s 28 of land Acquisition Act claimed as exempt in return filed. The action of learned AO is totally unlawful, unjustified and unreasonable. The addition of Rs. 1,05,75,310/- made on this account deserves to be deleted. 3. On the basis of Facts &circumstances of the case there is no legal warrant or valid justification on the part of learned CIT(A) to treat the said interest of Rs. 1,05,75,310/- granted U/s 28 of land Acquisition Act as income from other sources U/S 56 of the Act and allow deduction U/S 57 of the Act i.e. 50% of the said amount and not allowing the said amount as exempt U/s 10 (37) of the Act as claimed in the return. The claim of the assessee deserves to be allowed." 3. Representatives of both the sides were heard at length. Case records carefully perused. Relevant documentary evidence brought on record duly considered in light of Rule 18(6) of the ITAT Rules. 4. Ground No. 1 has not been pressed. The same is dismissed as not pressed. 5. Briefly stated, the facts of the case are that the assessee is an individual and filed his return of income on 23.07.2019 declaring total income of Rs. 6,07,140/-. T....
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....Paramjeet Singh Vs ACIT ITA No. 1393/DEL/2017 16.04.2021 II) ITO Vs. Chau Devi ITA No. 3 & 64/Chd/2020 17.05.2021 iii) ITO Vs. Girish Kumar ITA No. 5084/DEL/2019 06.07.2022 iv) Ashwani Kumar Vs. ITO 16.11.2023 ITAT Delhi v) Ram Kishan ITA No. 5391/DEL/2017 vi) Manjeet Singh Vs. ITO ITA No. 1391/DEL/2017 vii) Puneet Singh Vs. ACIT, Karnal ITA No. l389/DEL/2017 Dehradun viii)Virender Rathee Vs. ITO ITA No. 693/De1/2023 Delhi Bench SMC, New Delhi ix)Shri Pranav Saran Vs. ACIT Circle 32(1), New Delhi ITA No. 499/DEL/2021 dated 04.05.2022 12. The ld. counsel for the assessee stated that even after the decision of the High Court of Punjab &Haryana in the case of Mahender Pal Narang Vs. Central Board of Direct Taxes, New Delhi (2020) 120 Taxmann.com 400(Punjab &Haryana) dated 19.02.2020, the decision of the Supreme Court in the case of CIT Vs. Ghanshyam Dass HUF 2009 315 ITR 1 (SC) is still valid &binding as per orders passed by authorities subsequent to said orders. 13. Per contra, the ld. DR relied upon the orders of the authorities below. The ld DR also relied on the decision of Punjab &Haryana High Court in ....
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....s taken, interest at the rate of fifteen per centum per annum shall be payable from the date of expiry of the said period of one year on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry." 16. The taxability of interest on delayed payment of compensation u/s 34 of LAA was not under dispute. The controversy raised is with regard to the taxability of the interest received on enhanced compensation u/s 28 of LAA. This issue of taxability of interest received on enhanced compensation u/s 28 of LAA came up for consideration, way back in 1964, by a three judge bench of the Hon'ble Supreme Court in the case of Sham Lal Narula (Dr.) v. CIT [(1964) 53 ITR 151]. The hon'ble Court considered the interest under Section 28 of the Act of 1894 to be analogous to the interest under Section 34 of the Act, and held that the same did not form part of compensation. The relevant extract of the said decision is culled out as under:- "9. ---As we have pointed out, earlier, as soon as the Collector has taken possession of the land either before or after the award the title absolutely vests in the Government and thereafter the owner of....
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.... with effect from 01.04.2010. 20. It was in 2010, to align the law with the legislative intent, the Parliament brought in an amendment into clause (viii) of sub-Section 2 to Section 56 of the Act, vide Finance (No. 2) Act, 2009 (with effect from 01.04.2010) and section 145B(1) of the Income Tax Act to bring the interest on compensation or on enhanced compensation as taxable as 'income from other sources'. The relevant provisions for deciding this case are extracted hereunder: "56. Income from other sources: - (2) In particular and without prejudice to the generality of the provisions of sub-section (1), the following incomes shall be chargeable to income tax under the head "Income from other sources", namely: -- (viii) income by way of interest received on compensation or on enhanced compensation referred to in [sub-section (1) of Section 145-B]." Section 145B of the Act reads as under: - "[145B. 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 inco....
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....n (1), the following incomes shall be chargeable to income tax under the head "Income from other sources", namely:- *** [(viii) income by way of interest received on compensation 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....
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....], wherein, it was held that interest under Section 28 of the Act of 1894 was in the nature of a revenue receipt and hence, the same was considered to be taxable. The relevant paragraphs of the 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....
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....ources' shall be computed after making the following deductions, namely : . . . (iv) in the case of income of the nature referred to in clause (viii) of sub-section (2) of section 56, a deduction of a sum equal to fifty per cent. of such income and no deduction shall 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 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. Accordin....
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....tion shall be considered as income from other sources and shall be exigible to Income Tax........... The language of section 56(2)(viii) and 57(iv) of the Act is plain, simple and unambiguous. There is no scope of taking outside aid for giving an interpretation to newly inserted sub sections and clauses. Therefore, in view of the decision in the case of Sham Lal Narula (supra), we are of the considered opinion that the decision in the case of Ghanshyam HUF (supra) is not applicable after the substitution of Sections 145A, 145B, 56(2)(viii) and 57(iv) by Finance (No. 2) Act, 2009. In view of the above, it is evident that the interest on compensation or interest on enhanced compensation is chargeable to tax under the head "income from other sources‟ from 01.10.2010 onwards. Therefore, the decision of the Hon'ble Supreme Court in the case of Ghanshyam HUF (supra), which was passed in the year 2009, in our considered opinion, is not applicable in the facts of the present case". 25. The decisions of the coordinate benches of the ITAT based on Ghanshyam HUF (supra) and relied upon by the Ld. Counsel, have not considered the decision of the Supreme Court's earlier three bench jud....