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TMI Blog2015 (12) TMI 1032X X X X Extracts X X X X X X X X Extracts X X X X ..... D HARYANA HIGH COURT] In view of the above, the tax at source has been rightly deducted and the petitioners can claim the refund, if any, admissible to them by filing the income tax returns in accordance with law. - Decided against assessee - CWP No. 20014 of 2015 - - - Dated:- 21-9-2015 - Ajay Kumar Mittal And Ramendra Jain, JJ. For the Appellant : Mr. Ajay Jain, Adv JUDGMENT Ajay Kumar Mittal, J. 1. The instant writ petition has been filed by the petitioners under Articles 226/227 of the Constitution of India praying for issuance of a writ in the nature of certiorari for quashing the TDS Certificates dated 21.1.2015 (Annexures P-4 to P-8, respectively) issued by respondent No.5. Further, a writ of mandamus has been sought directing the respondents to release the amount of the petitioners deducted as Tax Deduction at Source (TDS) from the compensation of their acquired land. 2. Put shortly, the facts necessary for adjudication of the present petition as narrated therein may be noticed. The petitioners along with respondents No.6 to 8 and 9 to 23 were owners in possession of the agricultural land to the extent of 1/3rd and 2/3rd share, respectively. State ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... charge of tax. In certain cases obligation is cast on the person responsible for making such payments to deduct tax at source and deposit in Government Treasury, but under Section 199 of the Act, the deduction so made under Chapter XVII of the Act and paid to the Central Government is to be treated as payment on behalf of the assessee. In other words, the TDS is provisional collection of tax by the revenue and is always subject to final determination at the time of filing of the return. The petitioners had received the amount of enhanced compensation and interest thereon. A perusal of TDS certificates appended by the petitioners clearly shows that tax has been deducted under Section 194A of the Act which relates to interest other than interest on securities . 6. It may also be noticed that amendment was made to subsection (2) of Section 56 of the 1961 Act by Finance (No.2) Act, 2009 w.e.f. 1.4.2010 to the following effect:- viii) Income by way of interest received on compensation or on enhanced compensation referred to in clause (b) of Section 145A. Further, amendment was also carried out in Section 145A of the 1961 Act by inserting clause (b) by Finance (No.2) Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 67) 66 ITR 465. 13. Further Section 2(28A) of the Act defines interest and was inserted by Finance Act, 1976 to be effective from 1.6.1976. It reads thus:- 'interest' means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised. The expression 'interest' occurring in sub-section (28A) of Section 2 of the Act widens the scope of the term 'interest' for the purposes of the Act. 14. Another three Judges bench of the Apex Court in Bikram Singh vs. Land Acquisition Collector, (1997) 224 ITR 551 following Dr. Shamlal Narula's case (supra) and taking into consideration definition of interest in Section 2(28A) of the Act had recorded that interest under Section 28 of the 1894 Act was a revenue receipt and is taxable. It was held as under:- The controversy is no longer res integra. This question was considered elaborately by this Court in Dr. Shamlal Narula vs. Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sistently taken the view that it is a revenue receipt. The amended definition of interest was not intended to exclude the revenue receipt of interest on delayed payment of compensation from taxability. Once it is construed to be a revenue receipt, necessarily, unless there is an exemption under the appropriate provisions of the Act, the revenue receipt is exigible to tax. The amendment is only to bring within its tax net, income received from the transaction covered under the definition of interest. It would mean that the interest received as income on the delayed payment of the compensation determined under Section 28 or 31 of the Acquisition Act is a taxable event. 15. Now, we advert to the judgment of the Apex Court in Ghanshyam (HUF)'s case (supra) on the basis of which learned counsel for the assessee had sought reconsideration of judgment of this Court in CIT v. Bir Singh, ITA No.209 of 2004 decided on 27.10.2010 where Division Bench of this Court has held that element of interest awarded by the court on enhanced amount of compensation under Section 28 of the 1894 Act falls for taxation under Section 56 as 'income from other sources' in the year of receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Section 56 of the Act even when compensation is treated as agricultural income and is not covered by Section 45(c) of the Act. We thus answer the questions in favour of the revenue and modify our order dated 5.7.2010 accordingly. The amount of interest on enhanced compensation is held to be taxable in the year of receipt irrespective of pendency of proceedings against award of enhanced compensation. 11. The judgment of learned Single Judge in Mandir Nar Singh Puri's case (supra) (Annexure P-10) on which reliance has been placed by the petitioners being contrary to the aforesaid pronouncements cannot be taken to be interpreting the legal provisions correctly and is, thus, overruled. 12. Still further, this Court in Sarti v. Haryana State Industrial and Infrastructure Development Corporation Ltd. and others, CWP No. 9739 of 2011 decided on 30.5.2011 dealing with the issue of tax deducted at source under similar circumstances had recorded as under:- 8. This Court, in Income Tax Appeal No. 209 of 2004, decided on 27.10.2010 (Commissioner of Income Tax, Faridabad v. B ir Singh (HUF), Ballabgarh) had held that interest paid to the assessee under Section 28 of the Land ..... X X X X Extracts X X X X X X X X Extracts X X X X
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