2021 (4) TMI 862

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..... as income unless it is in the nature of Revenue receipt or specifically brought within the ambit of income by way of specific provision of the Income Tax Act. Thus, the interest received on compensation/enhanced compensation to the assessee is nothing but a capital receipt and the addition is against the law. This issue has been decided by the Hon'ble Apex Court in case of Union of India Vs. Hari Singh[ 2017 (11) TMI 923 - SUPREME COURT] wherein it is held that on agricultural Land no tax is payable when the compensation/enhanced compensation is received by the assessee as the land was agricultural land. The compensation was received in respect of agricultural land belonging to the assessee which had been acquired by the government .....

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..... empt u/s. 10(37) of the Income Tax Act. The Id Assessing officer while making the assessment disallowed 50% of the Interest received on enhanced compensation and accordingly added ₹ 54,31,208/- to the Income of the assessee u/s. 143(3) 148 of the Income Tax Act. 4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee. 5. The Ld. AR submitted that Hon'ble Supreme Court in case of CIT vs. Ghansyam HUF (supra) held that interest awarded u/s. 28 of the Land Acquisition Act is capital receipt and is nothing but an accretion to the value of compensation. Thus, it is part and parcel of the compensation, hence is not taxable. The Ld. AR further submitte .....

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..... ng but a capital receipt and the addition is against the law. This issue has been decided by the Hon'ble Apex Court in case of Union of India Vs. Hari Singh (Civil Appeal No. 15041/2017 order dated 15th September 2017) wherein it is held that on agricultural Land no tax is payable when the compensation/enhanced compensation is received by the assessee as the land was agricultural land. The compensation was received in respect of agricultural land belonging to the assessee which had been acquired by the government. The CIT(A) has not taken cognizance of the decision of the Apex Court in case of Hari Singh (supra). The ratio of the said decision is applicable in the present case. Thus, the appeal of the assessee is allowed. 8. In resul .....

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