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Issues involved:
The petitioners sought a direction for the refund of tax deducted at source on land acquisition compensation exempted under Section 194LA of the Income Tax Act, 1961, along with interest. Summary: The petitioners approached the High Court seeking a refund of tax deducted at source on land acquisition compensation exempted under Section 194LA of the Income Tax Act, 1961, along with interest. The land owned by the petitioners' father was acquired for public purpose, and compensation was assessed. The petitioners challenged the award and filed execution proceedings due to tax deduction at source under Section 194A of the Act. The Court noted that the payment released to the petitioners was on account of interest paid by the department. The petitioners acknowledged that tax was deducted at source as per Section 194A of the Act. Referring to a previous judgment, the Court stated that interest on enhanced compensation was taxable in the year of receipt, and the petitioners could file income tax returns to seek refund of excess tax deducted at source. The writ petition was disposed of, granting the petitioners liberty to file income tax returns and claim refunds in accordance with the law.
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