9911796707
TMI Blog2019 (11) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... ai v/s CIT [ 1989 (11) TMI 2 - SUPREME COURT] as held interest cannot be taken to have accrued on the date of the order of the Court granting enhanced compensation but has to be taken as having accrued year after year from the date of delivery of possession of the lands till the date of such order. Amendment under section 145A of the Act which mandates to levy the tax on the interest on the enhanced compensation in the year of receipt doesn t apply to the year under consideration. Therefore we hold that such interest income shall be subject to tax on accrual basis for the year under consideration. We note that the assessee has paid the tax on such interest income which was worked out for the each year involved separately in the year under consideration. Indeed the TDS certificate was issued in the name of the assessee and accordingly the assessee has paid the taxes due on such income on behalf of all other parties. This fact can be verified from the income tax return filed by the assessee placed on page 1 of the paper book. Therefore, it is immaterial whether other parties have paid the taxes on such income. As such there is no loss to the revenue as well as there is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt being a coowner having l/5lh share in the acquired land. 7. Both the lower authorities have passed the orders without properly appreciating the facts and they further erred in grossly ignoring various submissions, explanations and information submitted by the appellant from time to time which ought to have been considered before passing the impugned order. This action of the lower authorities is in clear breach of law and Principles of Natural Justice and therefore deserves to be quashed. 8. The learned CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in levying interest u/s.234A/B/C of the Act. 9. The learned CIT(A) has erred in law and on facts of the case in confirming action of the Id. AO in initiating penalty u/s.271(l)(c) of the Act. The appellant craves leave lo 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. At the outset, the ld. AR for the assessee submitted that he has been instructed by the assessee not press Ground no. 1 challenging the reopening u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee further calculated the amount of tax attributable to such interest income for different assessment years beginning from 1991-92 to 2008-09 amounting to ₹53,538.00 for the each party which was multiplied by 5 in order to work out the total tax liability against such interest on enhanced compensation with respect to all the parties. Thus, the total tax was determined at ₹2,67,640.00 (53,538.00 * 5) with respect to all the parties and for all the assessment years to which such interest income pertains. 3.2 As the TDS certificate of ₹ 6,12,668.00 was issued in the name of the assessee, therefore he has paid the amount of tax through the TDS on behalf of all the parties and claimed the refund of the balance amount of ₹ 3,45,028.00 (₹ 6,12,668.00 ₹ 2,67,640.00). 3.3 However, the AO disagreed with the submission of the assessee by observing that the entire interest income belongs to the assessee only for the year under consideration. As such there was no direction in the order of the Hon ble Gujarat High Court to allocate such interest income among the 5 members as claimed by the assessee. 3.4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in 181 ITR 400. 5.2 The Ld. AR also claimed that the PAN of the assessee was available with the concerned authority, therefore, the TDS certificate was issued in the name of the assessee. 6. On the other hand, the d. DR vehemently supported the order of the authorities below. 7. We have heard the rival contentions of both the parties and perused the materials available on record. The facts of the case have already been elaborated in the preceding paragraphs which are not in dispute. Therefore we are not inclined to repeat the same for the sake of brevity and convenience. 7.1 The 1st issue for our consideration arises whether the impugned land with respect to which the interest was awarded, belongs to 5 parties as claimed by the assessee. In this regard, we are inclined to refer the judgment of the Hon ble Gujarat High Court bearing L.A.R. Number 497/98 which reads as under: 4. 497/98 1.Champaben, Wd/o. Manilal Rancchodbhai Patel 2. Kanubhai Manilal Patel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng accrued year after year from the date of delivery of possession of the lands till the date of such order. 7.5 However, subsequently there was an amendment under section 145A of the Act which mandates to levy the tax on the interest on the enhanced compensation in the year of receipt. The memorandum explaining such amendment reads as under: Section 145A Finance Act, 2009 Method of accounting of interest received on delayed compensation 11.3 Section 145A dealing with method of accounting has been amended with effect from assessment year 2010-11 to provide that the interest received by an assessee on compensation of enhanced compensation shall be deemed to be his income for the year in which it is received irrespective of the method of accounting followed by the assessee. In Smt. Rama Bai v. CIT [1990] 181 ITR 400/[1991] 54 Taxman 496 [also see CIT v. TNK Govindarajulu Chetty[1987] 165 ITR 231] the Supreme Court held that arrears of interest computed on delayed or enhanced compensation shall be taxable on accrual basis. The memorandum explaini ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
