2023 (9) TMI 1508 - AT - Income Tax

Determination of the correct income in the hands of the assessee - interest income on enhanced compensation for acquisition of agriculture property - deduction u/s 57(iv) of the Act provides 50% deduction on interest on enhanced compensation received - CIT(A) after considering the issue regarding additional compensation awarded u/s 23(1)(a) of the Act and solatium u/s 23(2) of the Act, noted that section 28 is applicable only in respect of the excess amount which has been determined by the Court after reference u/s 18 of the 1894 Act. HELD THAT - The assessee field return of income declaring income from other sources of Rs. 1,76,583/- whereas the income has been determined by the CPC at Rs. 10,43,479/- and in the appellate proceedings, CIT(A) has dismissed the appeal of the assessee. During the arguments, assessee has submitted that the computation of the enhanced compensation and interest thereon. Assessee has also filed letter in vernacular language in which as per assessee there are seven beneficiaries listed as per the Court order. This fact was not submitted during the first appellate proceedings, therefore, this issue is remitted back to the AO for determination of the correct income in the hands of the assessee as per shares of the assessee and also as per the writ petition. Considering the provision of sec. 56(2)(h) r.w.s 57(4), we observe from the Form No. 26AS submitted by the ld.AR of the assesee the total TDS has been deducted of Rs. 97,566/-, which has been reported in the name of the assessee. In Form No. 26AS by the Finance Comptroller in (KAIL), the necessary TDS credit should be given to the assessee as per law and the assessee is directed to file necessary documents and not to seek unnecessary adjournments for early disposal of the case and the AO is directed to give reasonable opportunity of being heard to the assessee and decide the case as per law. Appeal of the assessee is partly allowed for statistical purposes.

Summary

The Appellate Tribunal ITAT Bangalore, with Shri Laxmi Prasad Sahu as the Accountant Member, heard an appeal by the assessee against a 06.01.2023 order by NAFC Delhi for the 2017-18 assessment year. The grounds of appeal included a challenge to the Commissioner of Income Tax (Appeal)'s order, denial of liability for assessed total income, and additional grounds related to interest income on enhanced compensation for agricultural property acquisition. The appeal was dismissed by the CIT(A) based on the taxability of interest income received on compensation or enhanced compensation. The assessee then appealed to the ITAT, arguing that only 1/7th of the total interest should be computed in their hands due to multiple beneficiaries. The ITAT remitted the issue back to the AO for correct income determination based on shares and writ petition, and directed TDS credit to be given to the assessee. The appeal was partly allowed for statistical purposes. The order was pronounced on 26th September, 2023.