TaxTMI 
TaxTMI 
2025 (11) TMI 1310
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....A No. 566/Chd/2023, ITA No. 613/Chd/2023, ITA No. 615/Chd/2023, ITA No. 617/Chd/2023, ITA No. 656/Chd/2023, ITA No. 697/Chd/2023, ITA No. 779/Chd/2023, ITA No. 92/Chd/2024, ITA No. 172/Chd/2024, ITA No. 176/Chd/2024, ITA No. 208/Chd/2024, ITA No. 245/Chd/2024, ITA No. 435/Chd/2024, ITA No. 458/Chd/2024, ITA No. 503/Chd/2024, ITA No. 531/Chd/2024, ITA No. 563/Chd/2024, ITA No. 663/Chd/2024, ITA No. 876/Chd/2024, ITA No. 1112/Chd/2024, ITA No. 1176/Chd/2024, ITA No. 1184/Chd/2024, ITA No. 153/Chd/2025, ITA No. 165/Chd/2025, ITA No. 243/Chd/2025, ITA No. 458/Chd/2025, ITA No. 483/Chd/2025, ITA No. 725/Chd/2025, ITA No. 1025/Chd/2025, ITA No. 1153/Chd/2025, ITA No. 486/Chd/2025, ITA No. 992/Chd/2025 And ITA No. 528/Chd/2025 Shri. Laliet Kumar, JM And Shri. Krinwant Sahay, AM For the Assessee : Shri Suraj Bhan Nain, Advocate, Shri Sudhir Sehgal, Advocate, Shri Navdeep Monga, Advocate, Shri B.M. Monga & Shri Rohit Kaura, Advocate (Virtual), Shri J.B. Sharma, Advocate (Virtual), Shri Vineet Krishan, Advocate, Shri Ajay Jain, C.A (Virtual), Ms. Shruti Khandelwal, Advocate (Virtual), Shri Tej Mohan Singh, Advocate, Shri Ajay Gilhotra & Shri Yash Gilhotra, (Virtual), Shri Rakesh Cajla,....
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....st. 3. That having regard to the facts and circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred both in law and on facts in confirming the addition of Rs. 34,65,610/- made by the Ld. Assessing Officer under the head "Income from other sources" u/s 56(viii) of the Income-tax Act referring to the provisions of section 199 of the Act, which is not relevant to determine nature of receipt of interest u/s 28 of the Land Acquisition Act 1894 as to whether it is a capital receipt forming part of enhanced compensation or a revenue receipt chargeable u/s 56(viii) of the Act. 4. Briefly the facts of the case are that the assessee, Shri Ajay Kumar, filed his original return of income for A.Y. 2018-19 on 29.09.2018 declaring total income of Rs. 3,51,090/-, which was processed u/s 143(1). The case was subsequently selected for Complete Scrutiny under the e-Assessment Scheme, 2019 on two issues, namely, (i) reduction of income in the revised return coupled with claim of refund, and (ii) mismatch between interest/winnings reported in Form 26AS and the income shown under "Income from Other Sources" in the return. Statutory notices u/s 143(2) and 1....
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....AC. The Ld. CIT(A) considered the assessment order, the written submissions of the assessee, and the material available on record. At the outset, the Ld. CIT(A) observed that the Assessing Officer had made an addition of Rs. 34,65,610/- on account of interest on enhanced compensation received by the assessee in respect of compulsory acquisition of agricultural land, and that the assessee had claimed TDS credit on such interest while not offering the corresponding income in the revised return. It was noted that the assessee had initially filed the return, declaring interest income. Subsequently, it revised the return to withdraw the same on the grounds that interest received under Section 28 of the Land Acquisition Act forms part of compensation and is exempt under Section 10(37). The Ld. CIT(A) recorded that the Assessing Officer had examined this claim and determined that the assessee's reliance on section 10(37) was misplaced, as that provision applies to capital gains arising from compulsory acquisition of agricultural land and does not extend to interest received on delayed payment of compensation. 8. The appellate authority / CIT(A) further concurred with the AO's analysis ....
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....g for delay in payment. 12. Our attention was specifically drawn to paragraphs 30 to 36 of the said judgment. The ld. AR emphasized that the Hon'ble Supreme Court, in unequivocal terms, held that the interest awarded u/s 28 has the same colour and character as compensation and, therefore, is liable to be treated as part of the enhanced compensation for income-tax purposes, whereas interest u/s 34 stands on a distinct footing being compensatory in nature on account of delay in making payment. It was stressed that the legislative intent behind Section 28 is to provide recompense/restitution for the deprivation of property and, therefore, it assumes the character of compensation in entirety. 13. It was further argued that the Apex Court clarified that the entire enhanced compensation, including interest u/s 28, becomes taxable in the year of receipt under the provisions of section 45(5) of the Income-tax Act. In contrast, interest u/s 34 is to be taxed as income from other sources. Thus, the ld. AR submitted that the interest component in the present case-being interest awarded on enhanced compensation under Section 28 of the Land Acquisition Act-is to be treated as compensation....
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....es only in respect of the excess amount determined by the Court after reference under section 18 of the 1894 Act. It depends upon the claim, unlike interest under section 34 which depends on undue delay in making the award. It is true that "interest" is not compensation. It is equally true that section 45(5) of the 1961 Act, refers to compensation. But as discussed hereinabove, we have to go by the provisions of the 1894 Act, which awards "interest" both as an accretion in the value of the lands acquired and interest for undue delay. Interest under section 28 unlike interest under section 34 is an accretion to the value, hence it is a part of enhanced compensation or consideration which is not the case with interest under section 34 of the 1894 Act. So also additional amount under section 23(1A) and solatium under section 23(2) of the 1961 Act forms part of enhanced compensation under section 45(5)(b) of the 1961 Act. In fact, what we have stated hereinabove is reinforced by the newly inserted clause (c) in section 45(5) by the Finance Act, 2003 with effect from 1-4-2004. This newly added clause envisages a situation where in the assessment for any year,- - the capital gain a....
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....ly, even in cases where pending appeal, the Court/Tribunal/Authority before which appeal is pending, permits the claimant to withdraw against security or otherwise the enhanced compensation (which is in dispute), the same is liable to be taxed under section 45(5) of the 1961 Act. This is the scheme of section 45(5) and section 155(16) of the 1961 Act. We may clarify that even before the insertion of section 45(5)( c) and section 155(16) with effect from 1-4-2004, the receipt of enhanced compensation under section 45(5)( b) was taxable in the year of receipt which is only reinforced by insertion of clause (c) because the right to receive payment under the 1894 Act is not in doubt. It is important to note that compensation, including enhanced compensation/consideration under the 1894 Act, is based on the full value of property as on date of notification under section 4 of that Act. When the Court/Tribunal directs payment of enhanced compensation under section 23(1A), or section 23(2) or under section 28 of the 1894 Act it is on the basis that award of Collector or the Court, under reference, has not compensated the owner for the full value of the property as on date of notification. ....
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....vered by another judgment of this Court in CIT v. Ghanshyam (HUF) [2009] 8 SCC 412, albeit, in favour of the Revenue. In that case, the court drew distinction between the "interest" earned under Section 28 of the Land Acquisition Act and the "interest" which is under Section 34 of the said Act. The Court clarified that whereas compensation given to the assessee of the land acquired would be 'income', the enhanced compensation/consideration becomes income by virtue of Section 45(5)(b) of the Income Tax Act. The question was whether it will cover "interest" and if so, what would be the year of taxability. The position in this respect is explained in paras 49 and 50 of the judgment which make the following reading: "49. As discussed hereinabove, Section 23(1-A) provides for additional amount. It takes care of the increase in the value at the rate of 12% per annum. Similarly, under Section 23(2) of the 1894 Act there is a provision for solatium which also represents part of the enhanced compensation. Similarly, Section 28 empowers the court in its discretion to award interest on the excess amount of compensation over and above what is awarded by the Collector. It inclu....
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....ted as "deemed income" and taxed on receipt basis. Our above understanding is supported by insertion of clause (c) in Section 45(5) w.e.f. 1-4-2004 and Section 155(16) which refers to a situation of a subsequent reduction by the court, tribunal or other authority and recomputation/ amendment of the assessment order. 54. Section 45 (5) read as a whole [including clause (c)] not only deals with reworking as urged on behalf of the assessee but also with the change in the full value of the consideration (computation) and since the enhanced compensation/consideration (including interest under Section 28 of the 1894 Act) becomes payable/ paid under the 1894 Act at different stages, the receipt of such enhanced compensation/ consideration is to be taxed in the year of receipt subject to adjustment, if any, under Section 155(16) of the 1961 Act, later on. Hence, the year in which enhanced compensation is received is the year of taxability. Consequently, even in cases where pending appeal, the court/tribunal/authority before which appeal is pending, permits the claimant to withdraw against security or otherwise the enhanced compensation (which is in dispute), the same is liable to ....
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.... said SLP, thereby leaving the decision of the Hon'ble High Court undisturbed. 18. The ld. AR thereafter invited our attention to the legislative developments post the judgment in Ghanshyam (HUF) (supra). It was submitted that w.e.f. 01.04.2010, the Legislature, through the Finance (No. 2) Act, 2009, inserted section 145A (subsequently renumbered as section 145B) and simultaneously amended section 56(2) by inserting clause (viii) to specifically deal with taxability of interest on compensation or enhanced compensation. The ld. AR submitted that the CBDT also issued a clarificatory Circular explaining the intent and scope of these amendments. In this connection, our attention was drawn to paragraph 11 of the judgment of the Hon'ble Gujarat High Court in MavaliyaBhikhubhaiBalabhai vs. ITO (TDS) [2016] 70 taxmann.com 45 (Guj.), SCA No. 17944 of 2015, dated 31.03.2016 (placed at page 278 of the paper book), wherein the Hon'ble Court reproduced the relevant CBDT Circular and explained the legislative purpose in the following terms: 11. It has been vehemently contended on behalf of the first respondent that the above decision has been rendered prior to the substitution of sec....
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....tion shall be taxable on accrual basis. Therefore, when one reads the words "interest received on compensation or enhanced compensation" in section 145A of the I.T. Act, the same have to be construed in the manner interpreted by the Supreme Court in Ghanshyam (HUF)'s case (supra). 12. On behalf of the first respondent, reliance has been placed upon decisions of different High Courts taking a different view. This court is not in agreement with the view adopted by the other High Courts which are not consistent with the law laid down in the case of Ghanshyam (HUF) (supra). In Manjet Singh (HUF) Karta Manjeet Singh's case (supra), the Punjab and Haryana High Court has chosen to place reliance upon various decisions of the Supreme Court rendered during the period 1964 to 1997 and has chosen to brush aside the subsequent decision of the Supreme Court in Ghanshyam (HUF)'s case (supra) which is directly on the issue by observing that the assessee cannot derive any benefit from the observations made by the Supreme Court as quoted therein. In Hari Kishan's case (supra), the Punjab and Haryana High Court has placed reliance upon its earlier decision in the case of Man....
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....erest awarded under Section 28 of the Land Acquisition Act forms part of the compensation and must be taxed accordingly. Thereafter, the ld. AR drew our attention to page 290 of the paper book, wherein Civil Appeal No. 15145 in the case of ITO (TDS) Vs. MovaliyaBhikhu Bhai arising out of the decision of Gujarat High Court was disposed of by the Hon'ble Supreme Court. Further reference was made to page 291 of the paper book, being the Civil Writ Petition filed by Shri Braham Prakash before the Hon'ble Supreme Court. Our attention was then invited to page 339 of the paper book wherein in para 19 the assessee in the said case made a prayer to the Hon'ble Supreme Court citing the contradictory decisions by Gujarat & Punjab & Haryana High Courts with respect to the issue of charging the interest on enhanced compensation. The contents of the the para 19 of the pleading before the Hon'ble Supreme Court read as under : "19. The State of Punjab and Haryana has taken a view in the judgments of Manjeet Singh and Ram Pal has held that the interest component under Section 28 of the Land Acquisition Act is exigible to tax under Section 56 (2) (viii) as" income from other sources....
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....ining as to whether the compensation paid was for agricultural land or not, the Assessing Officer(s) will keep in mind the provisions of Section 28 of the Land Acquisition Act and the law laid down by this Court in Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF) [2009 (8) SCC 412] in order to ascertain whether the interest given under the said provision amounts to compensation or not." 23. On the basis of the submissions made before us, as reproduced hereinabove, the Learned Authorised Representative (Ld. AR) has emphasized that the ratio laid down by the Hon'ble Supreme Court in the case of Ghanshyamdas (HUF) (supra) continues to hold the field and has been consistently followed by the Hon'ble Supreme Court itself, without any reservations or qualifications, even after the subsequent amendments to the Act. 24. It was submitted that the Hon'ble Gujarat High Court, relying upon the decision in the case of MovaliyaBhikubhaiBalabhai vs ITO, has decided another writ petition in favour of the Assessee, and our attention was drawn to page 375 in the case 'Mukta Nand Giri Mahesh Giri vs Direct District Development officer'. 25. The Ld. AR had further drawn our attent....
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....etitioner 28. Thereafter, a communication dated 22.5.2016 was brought to our notice whereby the PCIT was asked to comply with the direction. The Ld. AR had drawn our attention to various orders passed by the Tribunal whereby the Tribunal followed the decision of the 'Ghanhsyan' (supra). It as submission of the Ld. AR that the decision in the case of 'Ghanshyam' (supra) be followed. "2) While determining as to whether the compensation paid was for agricultural land or not, the Assessing Officer(s) will keep in mind the provisions of Section 28 of the Land Acquisition Act and the law laid down by this Court in 'Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF) [2009 (8) SCC 412) in order to ascertain whether the interest given under the said provision amounts to compensation or not. 29. The Ld. Authorised Representative (AR) submitted that there is no specific provision in Section 2(24) of the Income-tax Act, 1961, incorporating within its ambit any "other income" referred to in Section 56(2)(viii) of the Act. It was contended that unless a particular receipt is expressly brought within the inclusive definition of "income" under Section 2(24), the same canno....
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.... Representative submitted that the ratio laid down by the Hon'ble Supreme Court has remained undisturbed. On the contrary, it has been reinforced and reiterated by the Hon'ble Supreme Court on multiple occasions. Accordingly, it was contended that the impugned order passed by the lower authorities, being contrary to the binding decision of the Hon'ble Supreme Court, deserves to be set aside and the additions made are liable to be deleted. 33. The ld. Counsel, Shri Dharminder Singh, Advocate, appearing in Item No. 56, submitted that the award of the LAC was passed on 20.02.2008; thereafter, the learned Additional District Judge enhanced the compensation vide order dated 09.10.2014;at page 103 of PB it was held as under:- 30. In view of findings recorded on the issues above, the present petitions are hereby accepted partly with costs in favour of the petitioners and against the respondents. The market value of the acquired land is assessed at Rs. 28,65,500/- per acre i.e. at the rate of Rs. 592,045 per sq. yards as on the day of issuance of the notification under Section 4 of the Act. The petitioners are also held entitled to all the statutory benefits including solatium ....
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.... It was submitted that both the learned ADJ and the Hon'ble High Court granted enhanced compensation under section 28 of the Land Acquisition Act and not under section 34. Accordingly, the amount awarded under Section 28 partakes the character of compensation, not interest simpliciter. 35. In ITA No. 486, the ld. AR also advanced an alternative submission adopting the arguments of Shri Suraj Bhan, submitting that there is no dispute regarding the tax character of the interest received by the assessee up to 01.04.2010, since the field stood governed by the law laid down by the Hon'ble Supreme Court in Ghanshyam (HUF) (supra). It was contended that the interest is required to be bifurcated on a pro-rata basis, i.e., the portion relatable to the period up to 01.04.2010 is to be treated as part of the compensation, while the portion accruing thereafter may, if applicable, be assessed in terms of section 56(2)(viii) of the Act. 36. In Item No. 32, in the case of Shri Avtar Singh, Shri Vineet Krishan, the learned AR appearing for the assessee, submitted that the law declared by the Hon'ble Supreme Court under Article 141 of the Constitution of India is binding on all Courts and aut....
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....Hon'ble Supreme Court in Ghanshyam (HUF) (supra) has been subsequently considered and followed by the jurisdictional Punjab & Haryana High Court in the case of Mohinder Pal Narang as well as by the Hon'ble Delhi High Court in the case of Interjesh Singh Sodhi. The relevant portions of the aforesaid judgments are reproduced elsewhere. 40. The learned DR submitted that the decision in the case of Hari Singh (supra) pertains to an entirely different issue and, therefore, has no application to the present controversy. In this regard, he drew our attention to page 366 of the paper book filed by the learned AR, which records the following observations: "An admitted fact which is common in all these appeals that while disbursing the compensation, the Land Acquisition Collector had deducted the tax at source and deposited the same with the Income Tax Department. These appellants preferred the writ petition in the High Court stating that no such deduction at source was permissible in view of the provisions of Section 194LA of the Income Tax land and this provision categorically mentions that in Act, 1961, since the land which was acquired was agricultural respect of agricultural....
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.... deducted. 42. The learned DR further submitted that when the Hon'ble Supreme Court rendered its decision in Ghanshyam (HUF) (supra), the Court did not have the benefit of considering the subsequent statutory amendments brought into effect from 01.04.2010 by insertion of section 56(2)(viii) and section 145A/145B. It was also pointed out that the CBDT, vide Circular dated 03.06.2010, in paragraphs 46.1to 46.4, has clearly clarified the legislative intent behind the said amendments, which reads as under:- CIRCULAR NO. 5/2010/[F. NO. 142/13/2010-SO(TPL)] FINANCE (NO. 2) ACT, 2009 - EXPLANATORY NOTES TO THE PROVISIONS OF THE FINANCE (NO. 2) ACT, 2009 CIRCULAR NO. 5/2010/[F. NO. 142/13/2010-SO(TPL)], DATED 3-6-2010 [AS CORRECTED BY CORRIGENDUM NO.5/2010 [F.NO.142/13/2010-SO(TPL)], DATED 30-9-2010] 46. Rationalizing the provisions for taxation of interest received on delayed compensation or on enhanced compensation 46.1 The existing provisions of Income-tax Act provide that income chargeable under the head "Profits and gains of business or profession" or "Income from other sources", shall be computed in accordance with either cash or mercantile syst....
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....ere the statutory language is clear and unambiguous, literal interpretation must prevail. Lastly, the learned DR submitted that the taxability of the impugned receipts must be determined strictly in accordance with the provisions of the Income-tax Act and not on the basis of the definition of compensation under the Land Acquisition Act. The Income-tax Act being a special statute governing taxation will prevail over the meaning assigned to compensation under section 28 of the Land Acquisition Act. 46. The Ld. Departmental Representative (DR) drew attention to the Explanatory Notes to the Finance (No. 2) Act, 2009, emphasising that the legislative intent was to bring uniformity in taxation of interest on compensation or enhanced compensation and to mitigate practical hardship in such cases. The Ld. DR submitted that the omission of any reference to Ghanshyam (HUF) in the said Notes does not dilute the legislative intent. According to the Ld. DR, the insertion of clause (viii) in Section 56(2) and corresponding amendments in Section 145A were designed to codify the law and provide a specific charging mechanism for interest on compensation, whether under Section 28 or 34 of the Land....
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....t was held that enhanced compensation received under the 1894 Act may be received in multiple stages but the same is to be treated as "deemed income" at the time when it is received and is to be taxed on receipt basis. It was further held, the fact that enhanced compensation is in dispute and the withdrawal is conditional will not make a difference. While dealing with the said issue, it was held that interest on enhanced value of land forms part of compensation and is exigible to tax in the year of receipt whereas interest on delayed payment of enhanced compensation is income in a different nature. 9. The scheme with regard to chargeability of interest received on compensation and enhanced compensation has undergone a sea change with the insertion of sections 56(2)(viii) and 57(iv) of the 1961 Act. Section 56 deals with income from other sources and a specific provision has been inserted by way of sub-section 2(viii), whereby the interest received on compensation or enhanced compensation, as referred to in clause (b) to section 145A has been included under the head 'Income from other sources'. In clause (iv) to section 57, deduction of fifty per cent is provided on....
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.... construction that words have to be construed strictly according to their ordinary and natural meaning, particularly when the statute is a fiscal one irrespective of the object with which the provision was introduced. Of course if there is ambiguity in the statutory language, reference may be made to the legislative intent to resolve the ambiguity. But if the statutory language is unambiguous then that must be given effect to. The legislature is deemed to intend and mean what it says. The need for interpretation arises only when the words used in the statute are, on their own terms ambivalent and do not manifest the intention of the legislature." 13. In view of the above, it is held that the interest received on compensation or enhanced compensation is to be treated as "income from other sources" and not under the head "Capital gains" 48. Against the abovesaid decision the SLP filed by the assessee was dismissed by the Hon'ble Supreme Court and the order of the Hon'ble Supreme Court was reported in [2021] 126 taxmann.com 105 (SC)/[2021] 279 Taxman 74 (SC)/[2.. 49. Similarly the Hon'ble Delhi High Court in the case of PCIT Vs. Inderjit Singh Sodhi (HUF)[2024] ....
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.... down the condition that in case of non-payment despite expiry of a period of one year, the said interest on the amount of compensation which remains unpaid, shall be awarded at the rate of 15% per annum, calculable from the date of such expiry. 21. It is the contention of the respondent-assessee that the interest awarded under Section 28 of the Act of 1894, as discussed above, shall constitute a part of the compensation itself. The ITAT has also drawn strength from the observation of the Hon'ble Supreme Court in the case of Ghanshyam (supra) and the relevant paragraph of the said decision reads as under:- "35. To sum up, interest is different from compensation. However, interest paid on the excess amount under Section 28 of the 1894 Act depends upon a claim by the person whose land is acquired whereas interest under Section 34 is for the delay in making payment. This vital difference needs to be kept in mind in deciding this matter. Interest under Section 28 is part of the amount of compensation whereas interest under Section 34 is only for delay in making payment after the compensation amount is determined. Interest under Section 28 is a part of enhanced val....
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....f 1894 is exigible to tax on receipt basis. However, a deeper analysis of the decision in GovindbhaiMamaiya (supra) would show that it does not deal with any issue pertaining to the change in the taxability, put in place through the concerned amendment of 2010. Therefore, the said decision lacks any applicability in the facts and circumstances of the present case. 26. Notably, a three-Judges Bench of the Hon'ble Supreme Court in the case of Sham Lal Narula (Dr.) v. CIT [(1964) 53 ITR 151], while considering the interest under Section 28 of the Act of 1894 to be analogous to the interest under Section 34 of the Act, took the view 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 the land so acquired ceases to have any title or right of possession to the land acquired. Under the award he gets compensation for both the rights. Therefore, the interest awarded under Section 28 of the Act, j....
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.... any money borrowed or debt incurred including a deposit, claim or other similar right or obligation and includes any service, fee or other charges in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised. It is seen that the word "interest" for the purpose of the Act was interpreted by the inclusive definition. A literal construction may lead to the conclusion that the interest received or payable in any manner in respect of any moneys borrowed or a debt incurred or enumerated analogous transaction would be deemed interest. That was explained by the Board in the circular referred to hereinbefore." [Emphasis supplied] 28. In the case of Puneet Singh (supra), the High Court of Punjab and Haryana, while enunciating the effect of Section 145A(b) and Section 56(2)(viii) of the Act, has held as under:- "19. The cumulative effect of section 145A(b) and section 56(2)(viii) would be that any interest received on compensation or on enhanced compensation shall be taxable under the head "Income from other sources" in the year of receipt. 20. However, by section 27 of the 2009 Act, a new clause (iv) in sec....
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....ll be considered as income from other sources and shall be exigible to income tax. 30. We, accordingly, answer the substantial question of law which has arisen in the instant appeal in affirmative and in favour of the Revenue. We, thus, hold that the ITAT has erred in relying upon the decision of Ghanshyam (supra), ignoring the changes brought about by Finance (No.2) Act, 2009, which came into effect in the year 2010. 50. Besides thatDR has also relied upon the following case laws: * Dr.Shamlal Narula Vs. CIT (SC) India 53 ITR 151 dt. 09/04/1964 * T.N.K. Govindaraju Chetty Vs. CIT (SC) 66 ITR 465 dt. 17/04/1967 * State of Haryana Vs Kailashwati and Ors. (P&H) dt. 11/09/1979 * Rama Bai Vs CIT (SC) 54 Trueman 496 dt. 08/11/1989 * K.S. Krishna RAO Vs CIT (SC) 54 Trueman 339 dt. 08/11/1989 * Bikram Singh Vs Land Acquisition Collector 89 Trueman 119 dt. 12/09/1996 * Sunder vs Union of India, Civil Appeal No. 6271 of 1998 (SC) dt. 19/09/2001 * Shivajirao S/o, DnyanobaGhanwat and others, Vs The State of Maharashtra and others W.P.N. 5402 of 2013 (High Court of Bombay at Aurangabad) dated 27 08.2013 ....
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...., measured aerially,- (I) not being more than two kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh; or (II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or (III) not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh. Explanation.-For the purposes of this sub-clause, "population" means the population according to the last preceding census of which the relevant figures have been published before the first day of the previous year;]] ^42(24) "income"^43 includes^43- (i) profits and gains^43 ; (ii) dividend ; ^44[(iia) voluntary contributions received by a trust created wholly or partly for charitable or religious purposes or by an institution established wholly or partly for such purposes ^45....
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....b) any sum chargeable to income-tax under clause (iiib) of section 28 ;] ^55[(vc) any sum chargeable to income-tax under clause (iiic) of section 28 ;] ^56[(vd)] the value of any benefit or perquisite taxable under clause (iv) of section 28 ; ^57[(ve) any sum chargeable to income-tax under clause (v) of section 28 ;] (vi) any capital gains chargeable under section 45 ; (vii) the profits and gains of any business of insurance carried on by a mutual insurance company or by a co-operative society, computed in accordance with section 44 or any surplus taken to be such profits and gains by virtue of provisions contained in the First Schedule ; ^58[(viia) the profits and gains of any business of banking (including providing credit facilities) carried on by a co-operative society with its members;] (viii) [Omitted by the Finance Act, 1988, w.e.f. 1-4-1988. Original sub-clause (viii) was inserted by the Finance Act, 1964, w.e.f. 1-4-1964;] ^59[(ix) any winnings from lotteries^60, crossword puzzles, races including horse races, card games and other games of any sort or from gambling or betting of any form or nature whatsoever.] ....
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.... taken into account for determination of the actual cost of the asset in accordance with the provisions of Explanation 10 to clause (1) of section 43; or (b) the subsidy or grant by the Central Government for the purpose of the corpus of a trust or institution established by the Central Government or a State Government, as the case may be];] ^80[^81(28A)^82 "interest"^83 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 or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised ;] Section 4 Charge of income-tax. ^134.^14(1) Where any Central Act enacts that income-tax^15 shall be charged for any assessment year at any rate or rates, income-tax at that rate or those rates shall be charged for that year ^16in accordance with, and ^17[subject to the provisions (including provisions for the levy of additional income-tax) of, this Act] in respect of the total income^16 of the previous year ^18[***] of every person : Provided that ....
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.... sections ^77[***] ^78[54, 54B, ^79[***] ^80[^81[ 54D, ^82[54E, ^83[54EA, 54EB, ] 54F^84[,54G and 54H]]]]], be chargeable to income-tax under the head "Capital gains", and shall be deemed to be the income of the previous year in which the transfer took place. ...................................................... ................................... .................................. [(5) Notwithstanding anything contained in sub-section (1), where the capital gain arises from the transfer of a capital asset, being a transfer by way of compulsory acquisition under any law, or a transfer the consideration for which was determined or approved by the Central Government or the Reserve Bank of India, and the compensation or the consideration for such transfer is enhanced or further enhanced by any court, Tribunal or other authority, the capital gain shall be dealt with in the following manner, namely :- (a) the capital gain computed with reference to the compensation awarded in the first instance^94 or, as the case may be, the consideration determined or approved in the first instance by the Central Government or the Reserve Bank of India shall b....
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....out 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 70a[sub-section (1) of 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 income-tax in any earlier previous year.] Payment of compensation on acquisitio....
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....on Co. Ltd. (1961) 42 ITR 589 (SC) held that taxability must be determined by the law existing for the assessment year in question. This principle was reiterated in Karimtharuvi Tea Estates Ltd. v. State of Kerala (1966) 60 ITR 262 (SC), holding that the law on the first day of the assessment year governs the assessment unless specifically provided otherwise. 54. In Govind Das v. ITO (1976) 103 ITR 123 (SC), it was emphasised that taxing provisions imposing a new liability are presumed to be prospective unless the statute clearly indicates otherwise. Likewise, in CIT v. Hindustan Electro Graphites Ltd. (2000) 243 ITR 48 (SC), the Hon'ble Court held that a subsequent amendment cannot impose a tax burden for a period when such liability did not exist. 55. The Constitution Bench in CIT v. Vatika Township (P) Ltd. (2014) 367 ITR 466 (SC) further clarified that fiscal amendments affecting substantive rights are presumed to be prospective, unless expressly or by necessary implication made retrospective. The jurisprudence thus recognises the settled principle that new charging provisions operate prospectively. 56. We are reproducing the relevant paras of some of these judgments f....
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....me-tax Act as it stands amended on the first day of April of any financial year must apply to the assessment of that year. Any amendments in that Act which came into force after the first day of April of a financial year, would not apply to the assessment for that year, even if the assessment was actually made after the amendments came into force. There, the Kerala Surcharge on Taxes Act, 1957, having come into force on 1-9-1957, being the date appointed by the Kerala Government under section 1(3) of that Act, and not being retrospective in operation, by express intendment or necessary implication, could not be made applicable from 1-4-1957. Since the Act was not the law in force on 1-4-1957, no surcharge on agricultural income-tax could be levied under that Act in respect of the assessment year 1957-58. That decision had also not dealt with the question of affecting vested rights. 9. In our opinion, the right given to the assessee for the assessment year 1961- 62 under section 24(2) was an accrued right and a vested right. It could have been taken away expressly or by necessary implication. It has not been so done. Neither section 297(2)(b) nor any other sub-clauses of su....
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.... few judgments containing this dicta, a little later 57. In view of the foregoing discussion, it is a settled proposition of law that the law in force at the time of the assessment year or the law in force at the beginning of the assessment year is the law to be applied for the purpose of determining the tax liability of the assessee. 58. Now turning to the legal position prior to the Finance Act, 2010, the Hon'ble Supreme Court in Ghanshyam (HUF) (supra) held that interest awarded under Section 28 of the Land Acquisition Act, 1894 forms part of the compensation and is taxable u/s 45(5) of the Income-tax Act in the year of receipt. This view was based on the statutory scheme prevailing at the time and the deeming fiction under the Land Acquisition Act, which treated such interest as compensation. Admittedly, there is no change in the Land Acquisition Act and the decisions rendered on section 28 and the scope thereof. However, the legal landscape governing the taxation of interest on compensation or enhanced compensation has undergone a material change post the Finance Act, 2010, in the Income Tax Act, 1961. 59. The following propositions emerge from a conjoint reading of t....
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....145B(1), is on receipt basis. (vii) Consequently, the definition of "interest" under Section 2(28A) squarely covers interest on enhanced compensation, which-being in the nature of a claim-falls within the charging ambit of Section 4 of the Act. (viii) Hence, such interest is deemed to be taxable in the hands of the assessee under the specific deeming provision contained in Section 56(2)(viii), read with Section 145B(1), in accordance with the legislative scheme introduced by the Finance Act, 2010. 60. It is trite law that once Parliament enacts a specific charging provision dealing with a particular species of income, characterisation under another statute cannot override such specific provision. The Income-tax Act is a self-contained code, and definitions or deeming fiction under another statute (including the Land Acquisition Act) cannot be imported unless expressly incorporated. Reference in this regard may be made to Scindia Steam Navigation (supra), and Vatika Township (supra). Further at the time of passing of the order by Hon'ble Supreme Court in the case of Ghanshyam (HUF) (supra), did not have the benefit of examining the various provisions of law,....
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....Kumar [2001] 8 SCC 24, Brij Mohan Das Laxman Das v. CIT [1997] 1 SCC 352, 354, CIT v. Podar Cement (P.) Ltd. [1997] 5 SCC 482, 506. But if it changes the law it is not presumed to be retrospective irrespective of the fact that the phrase used are 'it is declared' or 'for the removal of doubts'. 21. There was and is no ambiguity in the main provision of section 9(1) (ii). It includes salaries in the total income of an assessee if the assessee has earned it in India. The word "earned" had been judicially defined in S. G. Pgnatale's case (supra) by the High Court of Gujarat, in our view, correctly, to mean as income "arising or accruing in India". The amendment to the section by way of an Explanation in 1983 effected a change in the scope of that judicial definition so as to include with effect from 1979, "income payable for service rendered in India. " 62. Applying these settled principles, it is clear that the ratio of Ghanshyam (HUF) (supra) represents the legal position under the unamended law, whereas with the introduction of Section 56(2)(viii) read with Section 145B(1), the Legislature has provided an explicit statutory mandate governing the tax ....
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....r what it explicitly decides, and cannot be extended to situations or statutory regimes which the Court did not consider. [See State of Orissa v. Sudhansu Sekhar Misra (1968) AIR SC 647; Union of India v. Major Bahadur Singh (2006) 1 SCC 368]. In the latter decision it was noted by Hon'ble SC Courts should not place reliance on decisions without discussing as to how the factual situation fits in with the fact situation of the decision on which reliance is placed. Observations of Courts are neither to be read as Euclid's theorems nor as provisions of the statute and that too taken out of their context. These observations must be read in the context in which they appear to have been stated. Judgments of Courts are not to be construed as statutes. To interpret words, phrases and provisions of a statute, it may become necessary for judges to embark into lengthy discussions but the discussion is meant to explain and not to define. Judges interpret statutes, they do not interpret judgments. They interpret words of statutes; their words are not to be interpreted as statutes. In London Graving Dock Co. Ltd. V. Horton (1951 AC 737 at p.761), Lord Mac Dermot observed: ....
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....ation or enhanced compensation as "Income from Other Sources" on receipt basis, thereby legislatively modifying the tax character of such receipts for assessment years commencing 01.04.2010 onwards. Once a direct charging provision exists, the characterisation of such receipt under the Land Acquisition Act or the judicial interpretation rendered under the erstwhile regime cannot prevail over the express statutory mandate of the Income-tax Act. 67. Accordingly, Hari Singh (supra) and Braham Prakash (supra) are confined to the legal position prevailing prior to the amendment and do not assist the assessee for post-amendment assessment years. The statutory change having altered the tax treatment expressly, reliance on these cases for the present assessment year is untenable. Dealing With Per-Incuriam Argument 68. The assessee has argued that the decisions of the Hon'ble Delhi High Court and the Hon'ble Punjab & Haryana High Court, which have upheld the post-amendment taxability of interest on enhanced compensation under Section 56(2)(viii), are per incuriam as they did not expressly consider the Hon'ble Supreme Court's rulings in Hari Singh and Braham Prakash. We are unable t....
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.... above any different view taken by any other High Court. The law has been settled by the Supreme Court in Official Liquidator v. Dayanand (2008)10 SCC 1, wherein it was held as under: "66. In State of Bihar v. Kalika Kuer and others [2003 (5) SCC 448], the Court elaborately considered the principle of per incuriam and held that the earlier judgment by a larger Bench cannot be ignored by invoking the principle of per incuriam and the only course open to the coordinate or smaller Bench is to make a request for reference to the larger Bench. In State of Punjab v. Devans Modem Breweries Ltd. [2004 (11) SCC 26], the Court reiterated that if a coordinate Bench does not agree with the principles of law enunciated by another Bench, the matter has to be referred to a larger Bench. In Central Board of Dwaoodi Bohra Community v. State of Maharashtra [2005 (2) SCC 673], the Constitution Bench interpreted Article 141, referred to various earlier judgments including Bharat Petroleum Corpn. Ltd. v. Mumbai Shramik Sangha (supra), Pradip Chandra Parija and others v. Pramod Chandra Patnaik and others (supra) and held that "the law laid down in a decision delivered by a Bench of larger stren....
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....t to that view instead of referring the matter to a larger Bench." The above decision was followed by the Supreme Court in Baradahanta Mishra v. Bhimsen Dixit, AIR 1972 SC 2466, wherein the legal position was reiterated in the following words (at page 2469) : "It would be anomalous to suggest that a Tribunal over which the High Court has superintendence can ignore the law declared by that court and start proceedings in direct violation of it. If a Tribunal can do so, all the subordinate courts can equally do so, for there is no specific provision, just like in the case of Supreme Court, making the law declared by the High Court binding on subordinate courts. It is implicit in the power of supervision conferred on a superior Tribunal that all the Tribunals subject to its supervision should conform to the law laid down by it. Such obedience would also be conducive to their smooth working; otherwise there would be confusion in the administration of law and respect for law would irretrievably suffer." Having decided whose decision binds whom, we may next examine what is binding. It is well-settled that it is only the ratio decidendi that has a precedent value....
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....urt's authoritative opinion must be distinguished from propositions assumed by the court to be correct for the purpose of disposing of the particular case. This position has been made further clear by the Supreme Court in a recent decision in CIT v. Sun Engineering Works P. Ltd. [1992] 198 ITR 297, at page 320, where it was observed : "It is neither desirable nor permissible to pick out a word or a sentence from the judgment of this court, divorced from the context of the question under consideration and treat it to be the complete 'law' declared by this court. The judgment must be read as a whole and the observations from the judgment have to be considered in the light of the questions which were before this court. A decision of this court takes its colour from the questions involved in the case in which it is rendered and, while applying the decision to a later case, the courts must carefully try to ascertain the true principle laid down by the decision of this court and not to pick out words or sentences from the judgment, divorced from the context of the questions under consideration by this court, to support their reasoning." In the above decision....
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....urse for them is to obtain an order of stay or other appropriate direction from the Tribunal or the Supreme Court, as the case may be. Without obtaining such an order they cannot refuse to implement the order under appeal. 37. Following the above decisions of the Supreme Court, a Division Bench of the Bombay High Court in Ganesh Benzoplast Ltd. v. Union of India 2020 (374) ELT 552 held that non-compliance of orders of the appellate authority by the subordinate original authority is disturbing to say the least as it strikes at the very root of administrative discipline and may have the effect of severely undermining the efficacy of the appellate remedy provided to a litigant under the statute. Principles of judicial discipline require that the orders of the higher appellate authorities should be followed unreservedly by the subordinate authorities. 38. This principle has been reiterated by the Bombay High Court in HimgiriBuildcon& Industries Ltd. v. Union of India 2021 (376) ELT 257. 39. Therefore, the stand taken by the Assessing Officer that since the decision of the Income Tax Appellate Tribunal in the case of the petitioner itself for the assessment ye....
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....3 ITA No. 1044/Chd/2019 Assessee Dismissed 4 ITA No. 432/Chd/ 2022 Assessee Dismissed 5 ITA No. 596 /Chd/ 2022 Assessee Dismissed 6 ITA No. 635 /Chd/2022 Assessee Dismissed 7 ITA No. 641 /Chd/ 2022 Assessee Dismissed 8 ITA No. 668/Chd/2022 Assessee Dismissed 9 ITA No. 731 /Chd/2022 Assessee Dismissed 10 ITA No. 6 /Chd/2023 Assessee Dismissed 11 ITA No. 50 /Chd/2023 Assessee Dismissed 12 ITA No. 51 /Chd/2023 Assessee Dismissed 13 ITA No. 100 /Chd/2023 Assessee Dismissed 14 ITA No. 116/Chd/2023 Assessee Dismissed 15 ITA No. 129 /Chd/2023 Assessee Dismissed 16 ITA No. 180 /Chd/2023 Assessee Dismissed 17 ITA No. 219 /Chd/2023 Assessee Dismissed 18 ITA No. 275 /Chd/2023 Assessee Dismissed 19 ITA No. 292/Chd/2023 Assessee Dismissed 20 ITA No. 317/Chd/2023 Assessee Dismissed 21 ITA No. 539 /Chd/2023 Assessee Dismissed 22 ITA No. 565/Chd/2023 Assessee Dismissed 23 ITA No. 566 /Chd/2023 Assessee Dismissed 24 ITA No. 613 /Chd/2023 Revenue....