9911796707
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Issues involved:
The judgment involves the challenge to tax deducted at source on interest paid for delay in compensation for agricultural land acquisition. The main issue is whether the tax deduction at source was permissible and if the petitioners are entitled to a refund. Summary: Issue 1: Tax Deduction at Source on Interest for Delayed Compensation The petitioners challenged the tax deducted at source on interest paid for delay in compensation for their agricultural land acquisition. The Division Bench held that interest received on delayed payment of compensation is a revenue receipt and is subject to income tax under the Income Tax Act, 1961. The petitioners relied on a case to argue against tax deduction, but the Court found the tax deduction to be valid based on previous judgments. Issue 2: Entitlement to Refund The petitioners claimed that the tax deducted at source was not authorized and sought a refund. The Court noted that the interest element on enhanced compensation was taxable in the year of receipt, requiring the petitioners to file income tax returns. The petitioners were advised to seek refund of any excess tax deducted at source through the proper legal procedures. Conclusion: The Court disposed of the writ petitions, stating that the petitioners have an alternative remedy by filing income tax returns to adjust tax deducted at source against their tax liability. While the petitions were deemed not maintainable due to the availability of this alternative remedy, the petitioners were granted the right to apply for a refund if any excess tax deduction was found, in accordance with the Income Tax Act, 1961.
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