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TMI Blog2020 (10) TMI 881X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the details relating to the income from other sources is beyond the scope of this limited scrutiny, inasmuch as the reason for a limited scrutiny includes low income from other sources as compared to large value fixed deposits. This reason takes into its fold the scrutiny of the income from other sources including the receipt of interest on enhanced compensation under section 28 of the Land Acquisition Act. AO did not step out the scope of enquiry in this matter. Addition of the interest on enhanced compensation received for acquisition of the agricultural property - In the case of Hari Singh [ 2017 (11) TMI 923 - SUPREME COURT ] while dealing with the similar question under identical set of facts under section 194LA of the Act, Hon ble Court set aside the matter to the file of the AO to examine the facts of the case and to apply the law as contained in the Income-tax Act. Hon ble Supreme Court specifically directs that in case the learned AO finds that the compensation was received in respect of the agricultural land, the tax deposited with the Income-tax Department shall be refunded to the assessee. Hon ble Supreme Court gave the above direction after noticing the decisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 he has filed return of income on 18.03.2015 declaring income at ₹ 1,71,200/- towards income from House property along with the agricultural income of ₹ 94,64,870/- as interest on compensation from state Government, DRO-cum- LAC, Gurgaon on agricultural land acquired by Haryana Government and pursuant to the notification for acquiring the land issued in the year 2001-02, assessee received the compensation along with interest in the year 2013-14. Assessee treated the interest on compensation as additional compensation and shown as exempt income in his return of income. 3. Assessment was complete under section 144 of the Income Tax Act, 1961 (for short the Act ), however, the Assessing Officer assessed an income of ₹ 1,34,36,670/-by order dated 20.12.2016 by making an addition of ₹ 85 Lacs on account of cash deposited in Punjab National Bank savings account and ₹ 47, 32, 420/- being 50% of interest received on compensation u/s 56(2)(viii) and ₹ 33,049/- as interest received on bank deposit and saving bank interest. 4. Aggrieved by such additions, assessee preferred appeal before the Ld. CIT(A) and contended that the interest on an enhanced compens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of CIT vs. Ghanshyam 315 ITR 1 (SC) and union of India vs. Hari Singh 302 CTR 458 (SC) and in view of the fact that the property acquired happens to be an agricultural property any income chargeable under the had capital gains arising from the transfer of agricultural land shall not be included in computing the total income of the assessee of the previous year. 8. Insofar as the addition of ₹ 85 Lacs is concerned, assessee being a person non conversant with the tax laws and the implications of obtaining loan in cash, obtained the same in cash and the fact of the creditors withdrawing the cash from their bank accounts and paying to the assessee stood demonstrated by way of producing the bank statements of the creditors. Ld. AR further submitted that the said amount of loan was subsequently repaid through the banking channels and such fact is evident from the bank statement of the assessee. 9. Per contra, it is the submission of the Ld. DR that the reason for selection of the case for scrutiny through CASS was stated to be low income from other source as compared to larger value of fixed assets and the assessee has also transferred one or more properties duri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ady to furnish the bank statements establishing such a fact. 12. We have gone through the record in the light of the submissions made on either side. According to the assessment order, the case of the assessee was selected for scrutiny through CASS with the reasons that low income from other source as compared to large value fixed deposits and a large cash deposits in saving bank account and assessee has also transferred one or more properties during the year . Further during the course of order, the learned Assessing Officer referred to the computation of income showing income of ₹ 46,21,066/-from other sources and the details of compensation and interest received from the government and the interest on enhanced compensation. In view of these, we are convinced that any consideration of the details relating to the income from other sources is beyond the scope of this limited scrutiny, inasmuch as the reason for a limited scrutiny includes low income from other sources as compared to large value fixed deposits. This reason takes into its fold the scrutiny of the income from other sources including the receipt of interest on enhanced compensation under section 28 of the Land Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pute as to whether the interest received was under section 28 of the Land Acquisition Act. Such an addition cannot be sustained and the same is directed to be deleted. 14. Now coming to the addition of ₹ 85 Lacs, when the assessee produced the bank statements of the creditors, the correctness of the same is not disputed and it is basing on such statements only Ld. CIT(A) concluded that the creditors have bank accounts and regular transactions are reflected therein. Ld. CIT(A), however, did not take into consideration the submissions made on behalf of the assessee that being not aware of the implications of receiving cash loans under the provisions of the Act, such a course was resorted to, and the fact of repayment by way of banking channels would lend any amount of support to the contention of the assessee about the genuineness of the loan transactions. It is an admitted fact that no bank statement of the assessee was produced before the authorities to demonstrate the fact of repayment. Ld. AR now seeks an opportunity of producing such material for the determination of just tax liability of the assessee. 15. It is a fact that there was no opportunity for the authorities belo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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