2011 (5) TMI 939 - HC - Income Tax

Summary

Issues involved: Whether interest payable on compensation and enhanced compensation for acquired land is subject to tax deduction at source.

Summary:
The petitioner sought a writ to quash a tax deduction certificate and refund the deducted amount related to compensation for acquired land. The petitioner argued that the interest received should be considered agricultural income and not subject to tax deduction. However, the court referred to a previous case where it was established that interest on enhanced compensation for acquired land falls under taxable income and is not exempt. As the interest in this case was due to delayed payment of compensation, it was deemed taxable under the Income Tax Act. Consequently, the court upheld the tax deduction and dismissed the writ petition.