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The petitioners seek a direction for the refund of tax deducted from interest awarded to them u/s 28 and 34 of the Land Acquisition Act, 1894, contending that the interest is not liable to tax. Judgment Details: The Supreme Court in Bikram Singh v. Land Acquisition Collector [1997] 224 ITR 551 held that interest on delayed compensation under the Land Acquisition Act is a revenue receipt subject to income tax u/s 4 of the Income-tax Act, 1961. The income can be spread over the relevant accounting year for tax assessment purposes. Thus, the petitioners are not entitled to the refund as sought. The petitioner's reliance on Satinder Singh v. Umrao Singh, AIR 1961 SC 908, arguing that compensation should not be treated as income, was not considered valid. The Court held that the decision in Bikram Singh's case [1997] 224 ITR 551 is binding, and the argument based on Satinder Singh's case is not open for consideration. The senior standing counsel for the Revenue highlighted that the definition of interest has changed post the Satinder Singh case, emphasizing that the interest in the present case is statutory and not by way of compensation. The Court affirmed that the interest should be assessed in line with the Bikram Singh case. The Court dismissed the petition, stating that the petitioners are not entitled to any relief, and no costs were awarded.
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