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TMI Blog2015 (12) TMI 1066X X X X Extracts X X X X X X X X Extracts X X X X ..... ural land situated within the revenue estate of village Sultanpur, Tehsil Farrukh Nagar, District Gurgaon. State of Haryana acquired the said land vide notification dated 11.1.2005 issued under Section 4 of the Land Acquisition Act, 1894 (in short "the Act") for the public purpose for the development and utilization of Kundli-Manesar-Palwal Road in District Gurgaon. The Land Acquisition Collector vide award dated 10.5.2006 awarded compensation at the rate of Rs. 12.50 lacs per acre. The petitioners filed reference under Section 18 of the Act and the Additional District Judge, Gurgaon vide award dated 27.8.2012 enhanced the compensation at the rate of Rs. 43,17,841/- per acre. The petitioners received Form-D (Annexures P-3 and P-4, respectively) and the respondents deducted the tax at source from the compensation amount of the petitioners. The amount deducted as TDS from the compensation of the petitioners was 20% of the compensation assessed on account of interest awarded under Section 28 of the Act. Hence, the present writ petition. 4. Learned counsel for the petitioners submitted that the petitioners were entitled to refund of TDS in respect of the amount received by them on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied out in Section 145A of the 1961 Act by inserting clause (b) by Finance (No.2) Act, 2009 w.e.f. 1.4.2010 as under:- "(b) interest received by an assessee on compensation or enhanced compensation, as the case may be, shall be deemed to be the income of the year in which it is received." The cumulative effect of the aforesaid amendments would be that the interest component on the amount of compensation or enhanced compensation would be exigible to tax in the year of receipt irrespective of the method of accounting being employed by the assessee. 9. Adverting to the judgment of the Apex Court in Ghanshyam's case (supra) on which reliance has been placed by learned counsel for the petitioners, it may be noticed that a Division Bench of this Court in Manjeet Singh (HUF) Karta Manjeet Singh v. Union of India and others, CWP No. 15506 of 2013 decided on 14.1.2014 to which one of us (Ajay Kumar Mittal, J.) was a member had dealt with the similar issue holding that the petitioners cannot derive any benefit from Ghanshyam's case (supra) with the following observations:- "12. Adverting to the case law on the subject, inevitably, reference is made to the judgment by the three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court in Dr. Shamlal Narula vs. Commissioner of Income-tax, Jammu [51 ITR 151]. Therein, K. Subba Rao, J., as he then was, considered the earlier case law on the concept of "interest" laid down by the Privy Council and all other cases and had held at page 158 as under: "In a case where title passes to the State, the statutory interest provided thereafter can only be regarded either as representing the profit which the owner of the land might have made if he had the use of the money or the loss he suffered because he had not that use. In no sense of the term can it be described as damages or compensation for the owner's right to retain possession, for he has no right to retain possession after possession was taken under Section 16 or Section 17 of the Act. We, therefore, hold that the statutory interest paid under Section 34 of the Act is interest paid for the delayed payment of the compensation amount and, therefore, is a revenue receipt liable to tax under the Income-tax Act." This position of law has been consistently reiterated by this Court in the case of TMK Govindaraju Chetty vs. Commissioner of Incometax, Madras [66 ITR 465], Rama Rai & Ors. vs. CIT, Andhra Pradesh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come from other sources' in the year of receipt. 16. The reliance was placed upon following observations in Ghanshyam (HUF)'s case (supra):- "To sum up, interest is different from compensation. However, interest paid on the excess amount under Section 28 of the 1894 Act depends upon a claim by the person whose land is acquired whereas interest under Section 34 is for delay in making payment. This vital difference needs to be kept in mind in deciding this matter. Interest under Section 28 is part of the amount of compensation whereas interest under Section 34 is only for delay in making payment after the compensation amount is determined. Interest under Section 28 is a part of the enhanced value of the land which is not the case in the matter of payment of interest under Section 34." 17. In view of the authoritative pronouncements of the Apex Court in Dr. Sham Lal Narula, T.N.K.Govindaraja Chetty, Amarjit Singh, Sunder, Bikram Singh's cases (supra), Rama Bai vs. CIT (1990) 181 ITR 400 and K.S.Krishna Rao v. CIT, (1990) 181 ITR 408, the assessee cannot derive any benefit from the aforesaid observations quoted above." 10. Appeal carried to the Apex Court by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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