TaxTMI 
TaxTMI 
2026 (2) TMI 1056
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....on 147 r.w.s 144 read with section 144B of the I.T.Act, 1961 dated 27.03.2022. 1.1 The ITA No.2787/PUN/2025 emanates from penalty order u/s. 271(1)(c) of the Act, for A.Y.2016-17. 1.2 For the sake of convenience with consent of ld.AR for the Assessee and ld.DR for the Revenue, both the appeals were heard together and disposed by common order. We treat appeal in ITA No.2786/PUN/2025 as "Lead Appeal". The grounds of appeal raised in ITA No.2786/PUN/2025 are as under : "1) The Hon CIT (A) erred in Upholding addition of Rs. 43,82,008/- made by Learned AO by relying upon the provisions of section 56(2)(viii) r.w.s. 57 (iv) r.w.s. 145A(b) of the IT Act, 1961, not appreciating that the said amount was interest granted u/s 28 of the ....
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....ily members (co-owners) had received compensation for their agricultural lands at Village Bokadvira, Tal Uran, Dist Raigad. The said agricultural lands were compulsorily acquired by the State Government in the year 1986, under Section 4 of the Land Acquisition Act, 1894 for the New Bombay Project. 2. The appellant and his family members contested the award by way of a reference under The Land Acquisition Act, 1894, The Hon. Civil Judge, Senior Division, Raigad by way of order dt. 13.05.2013 granted Additional Compensation, Solatium as well as Additional Component u/s 23(1)(A) as well as Interest u/s section 28 of the Land Acquisition Act, 1894. 3. The interest component which is the subject matter of dispute is Rs. 81,79,1....
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....vs-ITO-TDS, 70 taxmann.com 45 (Gujarat) [2016] (iii) Rupesh Rashmikant Shah-vs-Union of India, 108 tarmann.com 181 (Bombay) [2019] (iv) Kusum Jayram Thakur Dhutum-vs-ITO, 162 taxmann.com 388 (Pune - Trib.) [2024] (v) Sanjay Bhimrao Patil-vs-ITO, 150 taxmann.com 153 (Pune - Trib.) [2023] (vi) Anwar Ali Poolakkodan-vs-ITO 2025 TAXSCAN (HC) 516 [2025] (vii) ITO-vs-Vinayak Hari Palled, 99 taxmann.com 90 (Bangalore - Trib.) [2018] 8. The appellant submits that interest income of Rs. 81,79,189/-, being interest u/s 28 of the Land Acquisition Act, 1894, is part of compensation amount and therefore is also exempt from tax u/s 10(37). The ground of appeal may kindly be allowed." Submission of ....
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....6(2)(viii) of the Income Tax Act. Assessing Officer allowed deduction u/s. 57(iv) of the Income Tax Act and taxed Rs. 43,82,008/-. Aggrieved by the assessment order, Assessee filed appeal before ld.CIT(A). 7. Assessee relied on the decision of Hon'ble Supreme Court in the case of CIT Vs. Ghanshyam (HUF) 315 ITR 1 and other decisions before ld.CIT(A). The ld.CIT(A) upheld the assessment order. Aggrieved by the order of the ld.CIT(A), Assessee has filed appeal before this Tribunal. 7.1 Thus, the only issue before us is that whether interest received u/s. 28 of the Land Acquisition Act on enhanced compensation is taxable under section 56(2)(viii) of the Income Tax Act or not! 8. It is an admitted fact that Assessee's Father's Agricult....
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....ovaliya Bhikhubhai Balabhai Vs. Income-tax Officer-TDS-1-Surat in Special Civil Application No.17944 of 2015 vide order dated 31.03.2016; 388 ITR 343 (Gujarat) has held as under : "13. The upshot of the above discussion is that since interest under section 28 of the Act of 1894, partakes the character of compensation, it does not fall within the ambit of the expression "interest" as contemplated in section 145A of the I.T. Act. 12. Before the Hon'ble Gujarat High Court(supra), Revenue had taken the plea that Income Tax Act was amended w.e.f. 01.04.2010 and hence, decision of Hon'ble Supreme Court in the case of CIT Vs. Ghanshaym(HUF) was not applicable after the amendment. However, Hon'ble Gujarat High Court in para 11 held as u....
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....e Act, further, hold that the amendment by way of substitution of section 145A by Finance (No. 2) Act, 2009 w.e.f. 1-04-2010 and amendment by way of insertion of clause (iii) in section 56(2) by Finance Act, 2009 would have no applicability to the facts of the present case and in view of the same the order of CIT(A) in confirming the order of AO is not justified. 14.1 Thus, the proposition of law laid down by Hon'ble Supreme Court, Hon'ble Gujarat High and ITAT Pune Bench is that the interest income under section 28 of Land Acquisition Act, is not taxable under section 56(2)(viii) of the Income Tax Act, 1961. 15. Respectfully following the decision of Hon'ble Supreme Court, Hon'ble Gujarat High Court and ITAT Pune Bench, the Ground No....