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2017 (4) TMI 1503 - AT - Income TaxAddition to income from other sources - interest income u/s 34 of the Land Acquisition Act - CIT-A held that amount was received u/s 28 of the land Acquisition Act which is exempt from tax - HELD THAT - We find that the order of Ld.CIT(A) is based on binding precedent in the case of CIT vs Ghanshayam HUF 2009 (7) TMI 12 - SUPREME COURT . In view of the factual clarification issued by the Land Acquisition Officer, Urban Estate, Faridabad, as aforesaid and in view of the binding precedent of Hon ble Apex Court in the case of CIT vs Ghanshayama HUF (supra), we decline to interfere with the order of the Ld.CIT(A) as far as first ground of appeal before us, regarding addition is concerned. Therefore, first ground of appeal in the appeal filed by the Revenue is dismissed. Income of the assessee in accordance with return filed by the assessee u/s 139(4) - whether CIT(A) is empowered under the Act reduce the returned income of Assessee after expiry of period specified u/s 139(5) and without any revised returned filed by assessee u/s 139(5) ? - HELD THAT - In the instant case a fresh investigation of facts on merits of the claim made by the assessee was necessary, the opportunity for which was not given by the Ld.CIT(A) to the AO. In any case, in view of the clear legal position under sections 143(2), 139(1), 139(4) and 139(5) of the Act as discussed earlier in detail; and in view of the facts and circumstances as discussed earlier in detail; and in view of precedents in the cases of Goetze (India) Pvt. Ltd. 2006 (3) TMI 75 - SUPREME COURT and CIT vs Sun Engineering Works (P) Ltd. 2006 (3) TMI 75 - SUPREME COURT we hold that the Ld.CIT(A) erred in favourably considering the claim of the assessee for the aforesaid amount - Accordingly, we set aside the order of the Ld.CIT(A) on this issue and reverse his direction given to the AO to reduce the taxable income - We direct that this amount will continue to be included as income of the assessee in accordance with return filed by the assessee u/s 139(4) of the I.T.Act. Thus, second ground of appeal filed by the Revenue is allowed. Benefit of indexation in respect of long term capital gain - HELD THAT - We are of the view that the order of Ld.CIT(A) on this issue is a well-reasoned order and in accordance with law in the facts and circumstances of this case. Ld. DR has failed to make out a case for any interference with the order of Ld.CIT(A) on this issue. The order of the Ld.CIT(A) is also based on precedent of Hon ble Delhi High Court in the case of Arun Shungloo Trust 2012 (2) TMI 259 - DELHI HIGH COURT . In view of the foregoing, we decline to interfere with the order of the Ld.CIT(A) on this issue and dismiss third ground of appeal filed by the Revenue. Accordingly, the order of Ld.CIT(A) on this issue is upheld.
Issues Involved:
1. Taxability of interest received under Section 28 of the Land Acquisition Act. 2. Authority of CIT(A) to reduce taxable income after the expiry of the period specified under Section 139(5) without a revised return filed by the assessee. 3. Indexation benefit for computing long-term capital gains from the year the property was acquired by the previous owner. Detailed Analysis: 1. Taxability of Interest Received Under Section 28 of the Land Acquisition Act: The Revenue challenged the CIT(A)'s decision to exempt ?20,60,810/- received as interest under Section 28 of the Land Acquisition Act from tax. The AO had added this amount as taxable income under "income from other sources," citing it as interest under Section 34 of the Land Acquisition Act. The CIT(A) deleted this addition, referencing the Supreme Court judgment in CIT vs. Ghanshyam HUF (2009) 315 ITR 1, which held that interest under Section 28 is part of the compensation and thus exempt from tax. The Tribunal upheld the CIT(A)'s decision, noting that the interest was indeed received under Section 28, as confirmed by the Land Acquisition Officer, and thus exempt from tax. 2. Authority of CIT(A) to Reduce Taxable Income: The Revenue contested the CIT(A)'s direction to reduce the taxable income by ?79,32,289/- after the period specified under Section 139(5) had expired and without a revised return filed by the assessee. The Tribunal noted that the return filed by the assessee was a belated return under Section 139(4), which cannot be revised under Section 139(5). The Tribunal referenced the Supreme Court's decision in Goetze (India) Ltd. v. CIT [2006] 157 Taxman 1 (SC), which held that claims for deductions not made in the original return cannot be entertained by the AO except by filing a revised return. The Tribunal concluded that the CIT(A) erred in allowing the reduction, as it resulted in an assessed income lower than the returned income, which is not permissible under law. Therefore, the Tribunal reversed the CIT(A)'s direction to reduce the taxable income. 3. Indexation Benefit for Long-Term Capital Gains: The Revenue disputed the CIT(A)'s decision to allow indexation from the year the property was acquired by the previous owner for computing long-term capital gains. The assessee had inherited the property in FY 1987-88, and the AO had allowed indexation from that year. However, the CIT(A) allowed indexation from FY 1981-82, based on the Delhi High Court's decision in Arun Shungloo Trust vs. CIT [2012]. The Tribunal upheld the CIT(A)'s decision, noting that it was well-reasoned and in accordance with the legal precedent set by the Delhi High Court. Conclusion: The Tribunal: - Dismissed the Revenue's appeal regarding the taxability of ?20,60,810/- received under Section 28 of the Land Acquisition Act, confirming it as exempt from tax. - Allowed the Revenue's appeal on the issue of reducing taxable income by ?79,32,289/-, reversing the CIT(A)'s direction. - Dismissed the Revenue's appeal on the indexation benefit, upholding the CIT(A)'s decision to allow indexation from FY 1981-82. The appeal of the Revenue was partly allowed for statistical purposes.
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