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TMI Blog2018 (7) TMI 2120X X X X Extracts X X X X X X X X Extracts X X X X ..... ved by the assessee u/s 28 of the Land Acquisition Act is part of the compensation and is not in the nature of the interest. Therefore it is chargeable to tax under the head capital gain u/s 45 (4) of the act. Further interest received u/s 34 of the land Acquisition Act is in the nature of the interest and is chargeable to tax as interest Income under the head Income from Other sources in accordance with the method of accounting regularly followed by the assessee. AO in the impugned case has categorically held that compensation received by the assessee is u/s 28 of the Land Acquisition Act. Such fact is also reiterated and communicated to the assessee vide letter dated 26.07.2011 of the ld AO. This fact has also been further proved by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee has produced wheat, jwar etc on that land. In view of this the ground No. 2 of the appeal of the assessee is allowed and the ld AO is directed to treat the interest of compensation received by the assessee as compensation of land as sum was awarded u/s 28 of the Land Acquisition Act and further to grant exemption u/s 10(37) - Appeal of the assessee is allowed. - ITA No. 473/Del/2015 - - - Dated:- 20-7-2018 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For the Assessee : Shri Vijay Kumar Gupta, Adv For the Revenue : Shri S.L. Anuragi, Sr. DR ORDER PER AMIT SHUKLA, J. M. 1. This is an appeal filed by the assessee against the order of the CIT(A)-2, Faridabad dated 10.11 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear of receipt u/s 45(5) of the Act and further same is exempt u/s 10(37) of the Act. 3. The ld AO rejected the contention of the assessee and held that the compensation received by the assessee of ₹ 1913321/- is u/s 28 of the Land Acquisition Act and as the assessee is following cash system of accounting same is taxable on receipt basis. Therefore, the addition of this sum was made. With regard to the sum of ₹ 158507/- is compensation so he held that above sum is exempt u/s 10(37) of the Act. Consequently, the order u/s 143(3) of the Act was passed on 20.12.2011. 4. Aggrieved, the assessee preferred appeal before the ld CIT(A), who held that out of addition of ₹ 1913321/- a sum of ₹ 21763/- is on account of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the compensation and is not in the nature of the interest. Therefore it is chargeable to tax under the head capital gain u/s 45 (4) of the act. Further interest received u/s 34 of the land Acquisition Act is in the nature of the interest and is chargeable to tax as interest Income under the head Income from Other sources in accordance with the method of accounting regularly followed by the assessee. The ld AO in the impugned case has categorically held that compensation received by the assessee is u/s 28 of the Land Acquisition Act. Such fact is also reiterated and communicated to the assessee vide letter dated 26.07.2011 of the ld AO. This fact has also been further proved by the assessee by the letter dated 22.03.2018 of the Land Acq ..... X X X X Extracts X X X X X X X X Extracts X X X X
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