9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (12) TMI 1244 - AT - Income TaxAddition of interest of enhanced compensation - amount having been received u/s 28 of the Land Acquisition Act - diversified decisions - HELD THAT - It is a settled law that Statute must be interpreted according to the intention of the legislature and the court should act upon the true intent of the legislation while applying the law and its interpretation. If a statutory provision is open to more than one meaning the Court has to choose the interpretation which represents the intention of the legislature. In the present case the Department circular number 5/2010 dated 3/6 / 2010 clearly demonstrates the intention of the legislature. Accordingly we hold that interest on u/s 28 of the land acquisition act 1894 being part of the compensation shall be treated as a tax free in the case of an individual and HUF u/s 10 (37) if transfer is of an agricultural land. In view of above facts and judicial precedence we hold that the interest received by the assessee u/s 28 of the land acquisition act is not taxable. Ground of the appeal of the assessee are allowed.
Issues involved:
1. Taxability of interest received on enhanced compensation under section 28 of the Land Acquisition Act. Detailed analysis: The appeal was filed by the assessee against the order of the ld CIT(A)-37, New Delhi for the Assessment Year 2014-15. The primary issue raised in this appeal was whether the interest received on enhanced compensation of Rs. 24,207,223 under section 28 of the land acquisition act is chargeable to tax or not. The assessee, an individual, had declared income from house property and other sources in the return of income. The land owned by the assessee in his ancestral village was compulsorily acquired by the Delhi development authority, and the compensation received included interest of Rs. 24,207,223. The assessing officer held that the interest received on compensation or enhanced compensation is taxable as income from other sources due to changes in the income tax provisions post the Finance Act 2009. The AO relied on the decision of the Punjab and Haryana High Court to tax the interest as income from other sources and assessed the total interest amount at Rs. 1,21,03,610. The Commissioner of Income Tax (Appeals) confirmed the AO's order, leading the assessee to appeal before the ITAT Delhi. After considering the arguments and judicial precedents presented by both parties, the ITAT analyzed the relevant provisions introduced by the Finance Act 2009, specifically Section 145A(b), Section 56(2), and Section 57(iv). The ITAT noted that the legislative intent was to tax interest on compensation or enhanced compensation as income from other sources in the year of receipt, regardless of the accounting method followed by the assessee. The ITAT further discussed the judicial precedents, including decisions by the Himachal Pradesh High Court and Gujarat High Court, which considered interest on enhanced compensation as part of compensation and taxable under capital gains. However, the ITAT emphasized the legislative intent as reflected in Circular No. 5/2010, interpreting that interest under section 28 of the Land Acquisition Act should be treated as tax-free under section 10(37) for individuals and HUFs in the case of agricultural land transfers. In conclusion, the ITAT allowed the appeal of the assessee, holding that the interest received under section 28 of the Land Acquisition Act of Rs. 24,207,223 is not taxable. The ITAT considered the legislative intent, judicial precedents, and relevant provisions to arrive at this decision, allowing grounds 2 and 3 of the assessee's appeal. In summary, the ITAT Delhi ruled in favor of the assessee, determining that the interest received on enhanced compensation under section 28 of the Land Acquisition Act is not taxable, aligning with the legislative intent and judicial precedents cited during the proceedings.
|
