2014 (7) TMI 1326 - AT - Income Tax

Exemption u/s 10(37) - Enhanced compensation received by assessee - Interest on enhanced compensation - HELD THAT - As decided by ITAT in his brother s case it is not denied by the revenue that the interest received by the appellant was u/s 28 of the Land Acquisition Act 1894 and in view of the decision of Hon ble Apex Court in the case of CIT vs. Ghanshyam (HUF) 2009 (7) TMI 12 - SUPREME COURT such interest is part of the enhanced compensation. Enhanced compensation received is exempted u/s 10(37) of the Act and thus dismiss the revenue s appeal.

Summary

Issues:
1. Taxability of enhanced compensation and interest received on enhanced compensation.
2. Claim of exemption under section 10(37) of the Income-tax Act, 1961.
3. Admission of additional evidence under Rule 46A of the IT Rules, 1962.

Issue 1: Taxability of Enhanced Compensation and Interest:
The appeal addressed the tax treatment of enhanced compensation and interest received on enhanced compensation by the assessee. The Assessing Officer assessed half of the total sum received as income of the assessee. However, the CIT (A) deleted the addition, citing the judgment of the Hon'ble Supreme Court in CIT vs. Ghanshyam (HUF) and held that enhanced compensation received is exempted under section 10(37) of the Income-tax Act, 1961. The revenue challenged this deletion, arguing that the assessee did not claim exemption in the return filed. The ITAT dismissed the revenue's appeal, following its decision in a similar case involving the assessee's brother, where the revenue's appeal had also been dismissed.

Issue 2: Claim of Exemption under Section 10(37):
The revenue contended that the CIT (A) erred in allowing the claim of the assessee under section 10(37) while ignoring the judgment in Goetze (India) Ltd vs. CIT, which held that no fresh claim can be made during assessment proceedings unless through a revised return of income. The assessee argued that the interest received was part of the enhanced compensation and thus exempt under section 10(37). The ITAT, considering the common order in the case of the assessee and his brother, upheld the decision of the CIT (A) and dismissed the revenue's appeal.

Issue 3: Admission of Additional Evidence under Rule 46A:
The revenue raised objections regarding the admission of additional evidence under Rule 46A of the IT Rules, 1962 by the CIT (A). The ITAT noted that the additional evidence included crucial documents necessary for the appeal's decision and had a direct impact on the claim made by the assessee. Citing various precedents, the ITAT emphasized the importance of considering such evidence for a just decision. The ITAT dismissed the revenue's appeal, upholding the admission of additional evidence by the CIT (A) for a fair adjudication of the matter.

In conclusion, the ITAT upheld the CIT (A)'s decision to exempt the enhanced compensation received by the assessee under section 10(37) of the Income-tax Act, 1961. The ITAT also supported the admission of additional evidence crucial for the appeal's resolution, dismissing the revenue's appeal based on precedents and the common order in a related case involving the assessee's brother.