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TMI Blog2020 (2) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... (Appeal)-I has further erred in law & facts in confirming the taxation of interest of previous years by the Assessing Officer in the current year income without providing relief under section 89 of the Act. 4. The CIT (Appeal)-I has further erred in law & facts in confirming the addition of ? 31,93,000/- made by the Assessing Officer on account of cash deposit in bank account without verifying the genuineness of the case that the appellant has deposited the cash out of advance received for sale of agricultural land/gift from relatives. 5. The CIT (Appeal)-I has further erred in law & facts in confirming the addition of 31,93,000/- made by the Assessing Officer without appreciating that the Assessing Officer has not provided reasonable opportunity of being heard and accordingly the additions are made against the principle of natural justice. 6. The CIT(A) has erred in not accepting the additional evidences merely on the basis of Assessing Officer report wherein the AO has grossly erred while not granted any opportunity to be heard to the appellant and passed the remand report against the principle of natural justice. 7. The CIT (Appeal)-I has further erred in law & facts in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eing exempt under section 10(37) of the Act. However, according to the Assessing Officer, in view of the amended provisions of the section 56(2)(viii) of the Act introduced by Finance Act, 2009 effective from assessment year 2010-11, the interest received on delayed compensation or enhanced compensation is taxable under the head 'income from other sources'. According to the section 145(A)(b) of the Act the interest received would be liable to tax in the year of the receipt and deduction to the extent of the 50% would be available to the assessee under section 57(iv) of the Act. Accordingly, the Assessing Officer rejected the contention of the assessee and after allowing 50% deduction, he made addition for the balance amount of Rs. 41,84,185/-. The Ld. CIT(A) after considering judicial precedents available on the issue in dispute dismissed the ground of the appeal of the assessee observing as under: "4.3 I have carefully considered the appellant's submissions. The only issue to be considered here is whether the interest received u/s 28 of the Land Acquisition Act is in the nature ol interest or is it a part of the enhanced compensation and whether the same is taxable under the hea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the amount awarded with interest thereon at the rate of nine per centum per annum from the time of so taking possession until it shall have been so paid or deposited. Provided that if such compensation or any part thereof is not paid or deposited within a period of one year from the date on which possession is taken, interest at the rate of fifteen per centum per annum shall be payable from the date of expiry of the said period of one vein- on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry. 9. The award of interest under Section 28 of the 1894 Act applies when the amount originally awarded has been paid or deposited and when the Court awards excess amount. In such cases interest on that excess alone is payable. Section 28 empowers the Court to award interest on the excess amount of compensation awarded by it over the amount awarded by the Collector. The compensation awarded by the Court includes the additional compensation awarded under Section 23(1 A) and the solatium under Section 23(2) of the said Act. Section 28 is applicable only in respect of the excess amount, which is determined by the Court after a referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter the award the title absolutely vests in the Government and thereafter owner of the land so acquired ceases to have any title or right of possession to the land acquired. Under the award he gels compensation for both the rights. Therefore, the interest awarded under s. 28 of the Act, just like under s. 34 thereof, cannot he a compensation or damages for the loss of the right to retain possession but only compensation payable by the Slate for keeping back the amount payable to the owner. " The principle of Dr. Shamlal Narula's case (supra) had subsequently been applied by three Judges Bench of the Apex Court in a later decision in T.N.K.Govindaraju C/iefty v. CIT, (1967) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed or in respect of any credit facility which has not been utilized. It is seen that the word "interest" for the purpose of the Act was interpreted by the inclusive definition. A literal construction may lead to the conclusion that the interest received or payable in any manner in respect of any moneys borrowed or a debt incurred or enumerated analogous transaction would be deemed interest. That was explained by the Board in the circular referred to hereinbefore But the question is: whether the interest on delayed payment on the acquisition of the immovable property under the Acquisition Ad would not be eligible to income-tax? It is seen that this Court has consistently 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this order dated 21.09.2015 the Hon'ble Jurisdictional High Court held as under:- "9. In view of the above and also /he amendments made by I he Finance (No. 2) Act. 2009 w.e.f. 1.4.2010 noticed hereinbefore, no advantage can be derived by the petitioners from the judgment in Ghanshyam's case (supra). 10. Examining the issue of taxability of interest under Section 28 of the Act, in Commissioner of Income Tax v. Bir Singh (HUF), ITA No. 209 of 2004 decided on 27.10.2010, it was held by the Division Bench of this Court that the interest awarded by court on enhanced compensation under Section 28 of the Act was chargeable to tax as income from other sources in the year of receipt. Division Bench of this Court again in Commissioner of Income Tax, Panchkula v. Prem Singh decided on 16.12.201 (I while considering, identical issue recorded as under:- "11. In this view of the mutter, the interest component on enhanced compensation under Section 28 is liable to be taxed under 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 da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s for review-is sought by-the Union of India on the plea that the orders passed by this Court in the absence of any representation of Union, failed to take note of an amendment in the Income Tax Act. The said provision made interest component assessed on additional amount on land acquisition awards under Section 28 of the Land Acquisition Act as taxable. The amendment through Section 145-A (b) took effect from April 2010. I have relied on a judgment of the Supreme Court m Commissioner of Income-tax, Faridabad Versus Ghanshyam-(H UF) Civil Appeal No. 4401 of 2009 decided on 16.7.2009 reported in 2009 (9) JT 445 to hold that the interest awarded on enhanced compensation is not taxable. The effect of the judgment has been statutorily abrogated by virtue of the amendment. The award of the Collector itself has been passed subsequent to the amendment on November 10. 2010. A Division Bench of this Court in Hari Kishan Versus Union of India 2014 (2) PLR 662 and another judgment in Attar Singh and others Versus State of Haryana and others. CWP No. 10125 of 2015 dated 3.9.2015 have reiterated the position of taxability on enhanced compensation under the Land Acquisition Act on the basis of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned Departmental Representative relied on the order of the lower authorities. 4.4 We have heard the rival submission and perused the relevant material on record. The issue in dispute before us is whether the interest received on enhanced compensation is exempted under section 10(37) of the Act as part of the land compensation or it is taxable under section 56(2)(viii) of the Act. We find that the Ld. CIT(A) has taken into consideration decision of the Hon'ble Jurisdictional High Court of Punjab and Haryana in the case of Sunderlal and Anr. (supra) and Jagmal Singh and Ors. (supra), where the decision of the Hon'ble Supreme Court in the case of CIT Vs Ghanshyam (HUF) has also been considered. Subsequent to the decisions of the jurisdictional High Court referred above, the Hon'ble Supreme Court in the case of CIT Vs. Chet Ram (HUF), dated 12.09.2017 in Civil Appeal No. 13053 of 2017, wherein also the Hon'ble Supreme Court has again reiterated the proposition laid down in the case of Ghanshyam (HUF) (supra), which has further been reiterated in the case of Union of India Vs. Hari Singh & Others in Civil Appeal No. 1504 of 2017, dated 15.09.2017, as under: "(2) While determini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the assessee of receipt of money from the relatives was only an afterthought and made by self-serving statement. In view of the Ld. CIT(A), the assessee failed to discharge his onus to prove the source of the cash deposited in the bank account. Accordingly, he dismissed the ground of the appeal of the assessee. 5.2 Before us, the learned Counsel of the assessee submitted that the lower authorities has ignored the facts and rejected the additional evidences. According to him, the cash withdrawal was duly reflected in the bank statement of the mother of the assessee as well as his uncle and same has been duly submitted in appeal proceedings. According to him the assessee was not able to find the bank statement during the course of the assessment proceeding. He submitted that entire transaction of the withdrawals and deposits are duly reflected in the bank account and verifiable from the relevant records. According to him, the assessee has discharge the initial burden casted upon him and, therefore, source of the cash deposit should be accepted. 5.3 On the other hand, Ld. Departmental Representative relied on the order of the lower authorities and submitted that the assessee d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal) to admit additional evidence is governed by the provisions of Rule 46A of Income Tax Rules, 1961 . As per Rule 46A, the CIT(A) can admit additional evidence only in the following circumstances:- i) Where the AO has refused to admit evidence which out to have been admitted. ii) Where the appellant was prevented by sufficient cause from producing the evidence which he was called upon to produce by the AO. iii) Where the appellant was prevented by sufficient cause from producing before the AO any evidence which is relevant to any ground of appeal, iv) Where the AO has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. 5.7 In the appellant's case none of the conditions referred to in Rule 46A is satisfied. The AO did not refuse to admit any evidence. The next issue to be examined is whether the appellant was prevented by sufficient cause from producing the evidence. In this regard the appellant has not been able to justify as to how and why any explanation or evidence could not be produced by him, to explain his contentions, during the course of assessment proceedings. The document ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis for best judgment assessments in so far as the assets shown in them were concerned. All that was done was to ignore liabilities as the assessee had failed to substantiate them in spite of a large number of opportunities granted. In our opinion, therefore, the ratio of the Kerala High Court decision relied upon by the Tribunal was not, in any manner, attracted. The attitude of the assessee- was throughout to sit on the fence and contemptuously ignore the assessment proceedings and the notices issued by the WTO requiring him to furnish returns and other material in support of his wealth-lax statements. After all the assessment proceedings could not be converted into a farce of mockery by him. He ought to have shown due regard to them. In the circumstances, there was no justification, to allow him a second innings by setting aside the assessments and ret/airing the WTO to frame them afresh. For the framing of those best judgment assessments, and the situation in which the assessee found himself rendered, he was himself to blame. He could not, therefore, be heard to make a grievance of his own defaults. What the principles of natural justice postulates is that a reasonable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... partment " (emphasis supplied). 5.13 Similarly. Hon'ble Madras High Court in the case of Rayala Corporation Pvt. Ltd., 215 ITR 883 (Mad) has not countenanced the non-cooperative attitude of the assessee. In that case the appeal of the Department was allowed by the Hon'ble High Court and the Hon'ble Court made the following observations after referring to the decision of Hon'ble Supreme Court in 176 ITRJ535 (SC) : "What has surprised us, however, in the instant case, is the way the Appellate Commissioner has ignored the defiance of the assessee that in spite of the repeated notices and letters it never appeared before the Income-tax Officer with any information or material in response to the notice under section 148 of the Income-tax Act and the letters sent to it in this behalf. The Appellate Tribunal is not a court. Its powers, however, are expressed in the widest possible, terms under section 254 of the Act, "may after giving both the parties to the appeal an opportunity of being heard, and pass such orders thereon as it thinks fit". Its powers, thus, are almost similar to the powers of an appellate court under the Code of Civil Procedure. A wide power, howe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in excess of what he is bound to pay, and on the other hand, it has a duty to protect the interests of the Revenue and to see that, no one dodged the Revenue and escaped without, paying the tax......... The Supreme Court also has pointed out that the assessee cannot be permitted to take advantage of his own illegal ads and that it was his duty to place all the fads truthfully before the assessing authority. If he fails to do his duty, he cannot be allowed to call upon the assessing authority to prove conclusively what turnover he had suppressed. That fact must be within his personal knowledge. Hence, the burden of proving that fact is on him.................... 5.14 If the facts of the present case are analyzed, it is absolutely that the Assessing Officer gave the assessee many opportunities to furnish explanation with evidence regarding the cash deposits in the bank account but the appellant failed to give any evidence with regard to the cash deposits under reference. The ratio of the above said judicial opinions is on all fours and applicable to the present case. The Assessing Officer has framed the assessment in a very judicious manner and not in arbitrary manner. 5.15 Ke ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .
5.9 In view of the facts and circumstances of the case, we are of the considered opinion that assessee failed to discharge its onus to explain the source of the cash deposits and therefore, Ld. CIT(A) is justified in sustaining the addition. We, accordingly, uphold the same. The grounds of the appeal of the assessee are accordingly dismissed.
6. In ground No. 7, the assessee has challenged initiation of the penalty proceeding under section 271(1)(c) of the Act and nongranting of credit of TDS. In our opinion, as far as the issue of initiation of the penalty proceeding is concerned, the ground raised is premature at this stage and, therefore, same is dismissed as infructuous. However, as far as granting of the credit of the TDS is concerned, we direct the Assessing Officer to examine the claim of the assessee and if same is found in accordance with law, the assessee should be allowed the credit of tax deducted at source. The ground of the appeal of the assessee is accordingly partly allowed.
7. In the result, the appeal of the assessee is partly allowed for statistical purposes.
Order is pronounced in the open court on 30th January, 2020. X X X X Extracts X X X X X X X X Extracts X X X X
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