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TMI Blog2013 (11) TMI 1450X X X X Extracts X X X X X X X X Extracts X X X X ..... of interest ordered by the Court on enhanced compensation from the date of taking over the possession of the land to the date of payment of deposit of the enhanced compensation is in the nature of compensation, which as per findings of the Hon'ble Apex Court in the case of CIT v. Ghanshyam (HUF) 315 ITR 1 (SC) is to be taxed in the year of receipt. 2. That the appellant craves for the permission to add, delete or amend the grounds of appeal before or at the time of hearing of appeal. 2. The brief facts of the case are that the agricultural land owned by Shri Dhani Ram bearing Khewat No.953/1081 in Village Palwal was acquired by the Land Acquisition Authority on 6.12.1995 by making payments as compensation to him as per rates fixed at the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d CIT(A) after going through the submissions of the assessee and after going through the documents and evidences placed on record and on the basis of various judicial pronouncements deleted the addition made by the Assessing Officer by holding as under:- "As regards interest on enhanced compensation, the appellant received interest of Rs.12,18,998/- during the year under appeal. The important question that arises is whether the whole of the amount of interest of Rs.12,18,998/- is taxable in assessment year 2003-04 on receipt basis (cash system of accounting) as the appellant did not follow any system of accounting in earlier years, or taxable in various earlier years on accrual basis. This issue has to be decided in the light of the findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid decision that interest payable u/s 34 which is chargeable under the residuary head, cannot be said to accrue on the date when the court passed the order. It may be mentioned that the decisions in the case of Ram Bai and KS Krishna Rao (supra) were rendered without having regard to the system of accounting followed by the assessees. Therefore, under these judgments in respect of taxable of interest, apply mutatis mutandis to interest paid u/s 34 of that LA Act. There remains no dispute to the fact that the amount of Rs.12,18,998/- received by the appellant was u/s 34 of the Land Acquisition Act as it pertains to the period after the date of possession of land by HUDA which is required to be taxed on accrual basis. However, the LAC h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence was placed on the judgment of Hon'ble Punjab & Haryana High Court in the case of CIT v. Bhoop Room DAgar HUF & Others reported in 312 ITR 157and our attention was invited to page 43. The Ld AR further argued that the said judgment has followed the judgment of Hon'ble Supreme Court in the case of Rama Bai (supra) wherein it was held that interest payable u/s 34 cannot be said to be accrued in the year in which the court passes the order and it was held that such interest has to be split between the years right from the date of delivery of possession till the date of order of the court on a time basis. 7. We have heard the rival submissions of both the parties and have gone through the material available on record. We find that the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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