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TMI Blog2014 (6) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... g the addition of Rs. 22,93,378 in the year of appeal by following the decision of Apex Court in CIT Vs Ghanshyam HUF (315 ITR 1) which is not applicable to the facts of the case of the appellant. The CIT(A) also erred in not following the various decisions of the Supreme Court cited by the appellant claiming the spread over of the interest awarded. It be so held now and the addition made the returned income be deleted. 4. Levy of interest u/s.234B of the Act is not justified. 5. Initiation of penalty u/s.271(1)(c) of the Act is not justified. The appellant craves to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal. 2. Briefly stated facts are that the assessee had filed return of income declaring total income of Rs. 39,700/- and subsequently, revised return was filed declaring income of Rs. 59,934/-. The case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 29/12/2009, thereby the Assessing Officer(AO) made addition of Rs. 22,93,378/- being the interest income rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,378/- on enhanced compensation for agricultural land compulsorily acquired under Land Acquisition Act be taxed on accrual basis as having accrued year after year and not on lumpsum basis in the year in which received. Assessing Officer accepted principal amount as exempt from tax u/s 10(37) as claimed. But taxed interest of Rs. 22,93,378/- on receipt basis applying judgment of Hon'ble Supreme Court in case of CIT vs Ghanshyam (HUF) 315 ITR 1. Ld. CIT (A) confirmed order of AO rejecting plea of the appellant to tax on accrual basis. The appellant Form # 36 before Hon'ble ITAT raised following grounds - 1. The appellant submits that in view of the decision of the Hon'ble Supreme Court in CIT V/s Ghanshyam HUF (315 ITR 1) the interest awarded ought to have been held to be not taxable at all being merely integral part of compensation to the compulsory acquisition of land. 2. The Ld. CIT (A) erred in law and on facts in confirming the addition of Rs. 22,93,378 on account of interest awarded on enhanced compensation of agricultural land. 3. The Ld. CIT (A) erred in law and on facts in confirming the addition of Rs. 22,93,378 in the year of appeal by following the decis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat we have noted above, the Courts have considered such questions when a legal contention or a claim was based on material already on record but raised at an appellate stage. On such premise we wholeheartedly agree that the appellate authority and the Tribunal would have the power to entertain any such new ground, legal contention or claim. However, it is only the Bombay High Court in the case of Commissioner of Income-tax or Pruthvi Brokers and Shareholders P. Ltd. (supra), which has traveled a little beyond this proposition and come to the conclusion that even if facts necessary to examine such a claim are not placed on before the assessing officer and, therefore, not on record, there would be no impediment in the Commissioner (Appeals) entertaining such a claim. Such an issue does not arise in these appeals. We would, therefore, reserve our opinion on this limited aspect of the matter if and when in future the question presents before us in such form. For the present, we answer Questions (3) and (4) against the Revenue and in favour of the assessees in manner described above." With respect to the appellant claiming spread over of interest by mistake, ignorance of law or inadve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issible to be raised for the first time before the appellate authority or the Tribunal when facts necessary to examine, such ground, contention or claim are already on record. In such a case the situation would be akin to allowing a pure question of law to be raised at any stage of the proceedings. This is precisely what has happened in the present case. The Appellate Commissioner and the Tribunal did not need to nor did they travel beyond the materials already on record, in order to examine the claim of the assessees for deductions under section 80IB and 80HHC of the Act. 41. In the decisions that we have noted above, the Courts have considered such questions when a legal contention or a claim was based on material already on record but raised at an appellate stage. On such premise we wholeheartedly agree that the appellate authority and the Tribunal would have the power to entertain any such new ground, legal contention or claim. However, it is only the Bombay High Court in the case of Commissioner of Income-tax or Pruthvi Brokers and Shareholders P. Ltd. (supra), which has traveled a little beyond this proposition and come to the conclusion that even if facts necessary to exami ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... have stated hereinabove is reinforced by the newly inserted clause (c) in section 45(5) by the Finance Act, 2003 with effect from 1-4-2004. This newly added clause envisages a situation where in the assessment for any year,-- - the capital gain arising from the transfer of a capital asset is computed by taking the - - compensation or consideration referred to in clause (a) of section 45(5) or, as the case may be, - enhanced compensation or consideration referred to in clause (b) of section 45(5), and subsequently such compensation or consideration is reduced by any Court, Tribunal or other authority." 5.3. During the course of hearing, ld.counsel for the assessee has drawn our attention towards page Nos.11 to 19, wherein the order of the ld.Civil Judge (S.D.) at Gandhinagar passed in Land Acquisition Reference Nos.839/98 to 841/98, 311/98 & 332/98 to 336/98, dated 16/02/2005 is enclosed. The ld.Court has decided the claim of enhanced compensation as under: "ORDER The present Land Acquisition Reference Cases are hereby partly allowed. The opponents are directed to pay total additional Rs. 178/- per Sq.Mtr. [Rupees one hundred seventy eight only] [Rs.210/- minus Rs. 32 = Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the Central Government or the Reserve Bank of India; (iv) such income has arisen from the compensation or consideration for such transfer received by such assessee on or after the 1st day of April, 2004. Explanation : For the purposes of this clause, the expression "compensation or consideration" includes the compensation or consideration enhanced or further enhanced by any court, tribunal or other authority;] 6. In our considered view, the authorities below ought to have given a clear finding as to how this amount would become taxable if it is forming integral part of the compensation, when transfer is of the agricultural land. Since this claim was not made before the authorities below, but arising from the material available before the AO, requires fresh adjudication by the Assessing Officer. Therefore, the claim of the assessee is restored back to the file of AO for decision afresh. The AO is directed to decide the claim of the assessee in the light of judgement of Hon'ble Apex Court rendered in the case of CIT vs. Ghanshyam HUF (supra). 7. Ground No.4 is against levy of interest u/s.234B of the Act which is consequential in nature. 8. Ground No.5 is against initiation of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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