TaxTMI 
2026 (11) TMI 199
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.... : Mr. Anuj Nag, Advocate for respondent No.1. Mr. Mohinder Zharaick, Additional Advocate General, for respondents No.2 to 4. CMPMO Nos. 317, 319 & 321 of 2026 For the Petitioner(s): Mr. Anuj Nag, Advocate. For the Respondent: Ms. Meenakshi Sharma, Mr. Narender Sharma & Mr. Suraj Sharma, Advocates, for the private respondents. Mr. Mohinder Zharaick, Additional Advocate General, for respondents/ State. VIRENDER SINGH, JUDGE (ORAL) The common question, involved, in the present case, is about the deduction of income tax on the enhanced amount of compensation, granted under the Land Acquisition Act. 2. The parties to the present proceedings are ad idem that the issue involved in the present case is squarely covered by the deci....
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....in respect of land belonging to them which had been acquired was agricultural land, and claim refund of the tax which was deducted at source and deposited with the Income Tax Department. On the filing of these returns, the Assessing Officer(s) shall go into the aforesaid question and wherever it is found that the compensation was received in respect of agricultural land, the tax deposited with the Income Tax Department shall be refunded to these respondents. 7.2. 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. ....
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....23(1A) of the 1894 Act is neither interest nor solatium. It is an additional compensation designed to compensate the owner of the land, for the rise in price during the pendency of the land acquisition proceedings. It is a measure to offset the effect of inflation and the continuous rise in the value of properties. [See: State of Tamil Nadu and others etc. v. L. Krishnan and others etc. AIR 1996 SC 497]. Therefore, the amount payable under Section 23(1A) of the 1894 Act is an additional compensation in respect to the acquisition and has to be reckoned as part of the market value of the land. Subsection (1A) of Section 23 was introduced by Land Acquisition (Amendment) Act, 1984. It provides that in every case the Court shall award an amount ....
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....cretion of the Court. 34. Section 28 is applicable only in respect of the excess amount, which is determined by the Court after a reference under Section 18 of the 1894 Act. Section 28 does not apply to cases of undue delay in making award for compensation [See: Ram Chand & others etc v. Union of India & Ors. 1994( 1) SCC 44]. In the case of Shree Vijay Cotton & Oil Mills Ltd. v. State of Gujarat( 1991) 1 SCC 262, this Court has held that interest is different from compensation. 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 delay in making ....