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2017 (6) TMI 1276 - AT - Income TaxIncome from other sources - treating the net interest being the amount of interest u/s 28 of the Land Acquisition Act 1894 as chargeable to tax - Held that - The amount of interest received by the assessee is chargeable to tax in the year of receipt in view of insertion of clause (viii) to section 56(2) by the Finance No. (2) Act 2009 w.e.f 01.04.2010. This provision read with section 145A(b) makes it clear that interest received by assessee on compensation or an enhanced compensation shall be deemed to the income of the year in which it is received. CIT(A) has rightly set out and relied on in the case of Manjeet Singh (HUF) vs. UOI (2015 (12) TMI 1123 - PUNJAB & HARYANA HIGH COURT) being the jurisdictional High Court. In view of foregoing discussion CIT(A) was right in treating the amount as chargeable to tax. - Appeal filed by the assessee is dismissed.
Issues involved:
1. Taxability of interest received under section 28 of the Land Acquisition Act as chargeable to tax under section 56 of the Income-tax Act for Assessment Year 2013-14. Analysis: The appeal before the Appellate Tribunal ITAT DELHI was centered around the tax treatment of the net interest amounting to ?42,77,283 received by the assessee under section 28 of the Land Acquisition Act. The primary contention was whether this interest was chargeable to tax under section 56 of the Income-tax Act. The Assessing Officer had added the interest amount to the total income after allowing a deduction of 50% towards expenses, which was upheld by the CIT(A), leading to the aggrievement of the assessee. Upon examining the relevant provisions and facts of the case, the Tribunal noted that the interest received by the assessee fell within the purview of taxability in the year of receipt due to the insertion of clause (viii) to section 56(2) by the Finance Act 2009. This amendment, effective from 01.04.2010, deemed interest received on compensation or enhanced compensation as income of the year in which it was received. The Tribunal concurred with the CIT(A) who had relied on a judgment of the Hon’ble Punjab and Haryana High Court in a similar case. The Tribunal emphasized that the interest received by the assessee was rightly treated as chargeable to tax by the CIT(A) based on the legal precedents and statutory provisions cited. Ultimately, the Tribunal dismissed the appeal filed by the assessee, affirming the decision of the CIT(A) regarding the taxability of the interest amount. The judgment was pronounced on 07th June, 2017, bringing the legal proceedings to a conclusion.
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