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TMI Blog2018 (7) TMI 2051X X X X Extracts X X X X X X X X Extracts X X X X ..... thers [ 2017 (11) TMI 923 - SUPREME COURT] holding the same to be in the nature of compensation taxable as such. We hold that the interest received by the assessee during the impugned year on the compulsory acquisition of its land u/s 28 of the Land Acquisition Act, is in the nature of compensation and not interest which is taxable under the head income from other sources u/s 56 of the Act as held by the authorities below. The compensation being exempt u/s 10(37) of the Act is not disputed. In view of the same the order passed by the CIT(Appeals) upholding the addition made by the AO on account of interest on enhanced compensation is not sustainable. - Decided in favour of assessee - ITA No.552/Chd/2016 (Assessment Year : 2008-09) - - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; (2). That the demand determined upon the appellant on account of the tax as also the interest charged was liable to be quashed and so the observations that the appellant was liable to be proceeded against under section 271(l)(c) of the Income-tax Act, 1961; (3). That learned CIT (Appeals) failed to consider submissions urged before him and that the impugned order discloses nonapplication of mind; (4) That the appellant reserves right to modify or add to any other ground of appeal. 3. The sole issue in the present appeal is whether the compensation received by the assessee on account of compulsory acquisition of its land was in the nature of interest taxable u/s 56 of the Income Tax Act, 1961 (in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Assessing Officer dismissed the contention of the assessee relying upon the decision of the Hon'ble Jurisdictional High Court in the case of CIT Faridabad Vs. Bir Singh HUF in ITA No.209 of 2004 dated 27.10.2010. The CIT(Appeals) also stated that the Assessing Officer had rightly followed the decision of the Hon'ble Jurisdictional High Court in the case of Bir Singh HUF (supra) which had been followed by the Hon'ble Jurisdictional High Court in the case of Manjeet Singh (HUF) Karta Vs. Union of India in CWP No.15506 of 2013 dated 14.1.2014. The CIT(Appeals) pointed out that in the decision of Manjeet Singh (supra), the Hon'ble Jurisdictional High Court had considered the decision of the Hon'ble Apex Court in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, stated that the decision in the case of Ghanshyam, HUF (supra) would apply to the present assessee. 7. The Ld. DR though conceded that the decision of the Hon'ble Apex Court had been affirmed in the subsequent decisions passed by it, but stated that the decision passed by the Hon'ble Jurisdictional High Court in the case of Manjeet Singh(HUF) (supra) would apply and he relied upon the order of the CIT(Appeals) in this regard. 8. We have heard the contentions of both the parties, perused the records and also gone through the documents placed before us. We find merit in the contention raised by the assessee. Undisputedly the interest amounting to ₹ 3,99,156/- had been received u/s 28 of the Land A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rease in the value at the rate of 12% per annum. Similarly, under Section 23(2) of the 1894 Act there is a provision for solatium which also represents part of the enhanced compensation. Similarly, Section 28 empowers the court in its discretion to award interest on the excess amount of compensation over and above what is awarded by the Collector. It includes additional amount under Section 23(1-A) and solatium under Section 23(2) of the said Act. Section 28 of the 1894 Act applies only in respect of the excess amount determined by the court after reference under Section 18 of the 1894 Act. It depends upon the claim, unlike interest under section 34 which depends on undue delay in making the award. 50. It is true that interest i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Others (supra) as under: (2) While determining as to whether the compensation paid was for agricultural land or not, the Assessing Officer(s) will keep in mind the provisions of Section 28 of the Land Acquisition Act and the law laid down by this Court in 'Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF)' [2009 (8) SCC 412] in order to ascertain whether the interest given under the said provision amounts to compensation or not. 9. The said decision as rightly pointed out by the Ld. counsel for assessee have been rendered by the Hon'ble Apex Court subsequent to the decision passed by the Hon'ble Jurisdictional High Court in the case of Manjeet Singh(HUF) (supra) which had dealt with the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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