9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (11) TMI 1201 - AT - Income TaxInterest income received u/s 28 of the Land Acquisition Act, 1894 - Taxabilty u/s 56(2)(viii) r.w.s. 57(iv) - HELD THAT - We thus adopt the foregoing discussion in Basweshwar Mallikarjun Bidwe 2020 (10) TMI 356 - ITAT PUNE mutatis mutandis to affirm the CIT(A) s action upholding the impugned assessment findings regarding taxability of both sec.28 and sec.34 interests. The assessee s sole substantive grievance raised in the instant appeal fails.
Issues Involved:
1. Taxability of interest income received under Section 28 of the Land Acquisition Act, 1894. 2. Confirmation of addition as long-term capital gain on acquisition of land. Issue-wise Detailed Analysis: 1. Taxability of Interest Income Received under Section 28 of the Land Acquisition Act, 1894: The primary issue in this appeal is whether the interest income of Rs. 56,48,961 received under Section 28 of the Land Acquisition Act, 1894, is taxable under Section 56(2)(viii) read with Section 57(iv) of the Income Tax Act, 1961. The CIT(A) upheld the Assessing Officer's decision, citing the Hon'ble Apex Court's rulings in the cases of Bikram Singh and others, which held that interest received on delayed payment of compensation is taxable. The assessee argued that only 25% of the amount was received and the matter had not reached a final stage, hence tax should not be levied. However, the CIT(A) noted that Section 145A(b) introduced by the Finance (No.2) Act, 2009, mandates that interest on compensation or enhanced compensation is taxable in the year it is received. The tribunal referred to its recent decision in ITA No.1012/PUN/2017, which aligned with the Revenue's stance, affirming that interest under Section 28 of the LAA is chargeable to tax under Section 56(2)(viii). The tribunal also discussed the Hon'ble Punjab & Haryana High Court's decision in Manjeet Singh (HUF) Karta Manjeet Singh vs. Union of India, which reinforced that interest under Section 28 of the LAA is taxable. The Hon'ble Supreme Court dismissed an SLP against this judgment, further solidifying the taxability of such interest. The tribunal rejected the assessee's reliance on the Supreme Court's decision in Union of India and others vs. Hari Singh and others, clarifying that it did not pertain to the taxability of interest under Section 28 but rather the authority to determine the nature of land. Thus, the tribunal upheld the CIT(A)'s decision, confirming that interest received under Section 28 of the LAA is taxable under Section 56(2)(viii). 2. Confirmation of Addition as Long-term Capital Gain on Acquisition of Land: The second issue pertains to the addition of Rs. 38,58,365 as long-term capital gain on the compulsory acquisition of land. The AO noted that the land was within the municipal limits of Latur and considered it a capital asset under Section 2(14) of the Act. The assessee failed to provide evidence of agricultural use in the relevant years. The AO computed the capital gain based on the DVO's valuation of the land as of 1.4.1981. The assessee contended that the land acquired was at Gut No. 11, Vasangaon, not Khadgaon, Tq. Latur, and submitted additional evidence. The tribunal found a discrepancy between the AO's and the assessee's claims and decided to remand the matter to the AO for a fresh determination of the land's location and its status as agricultural land or a capital asset, allowing the assessee to present further evidence. Conclusion: The tribunal dismissed the appeal regarding the taxability of interest income under Section 28 of the LAA, affirming the CIT(A)'s decision. However, it remanded the issue of long-term capital gain on the acquisition of land to the AO for a fresh examination. The appeal was partly allowed for statistical purposes, with the order pronounced in open court on 23.11.2022.
|
