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TMI Blog2021 (5) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... shan, Adv. ORDER These two appeals by the Department are directed against the separate orders dated 30/10/2019 and 31/10/2019 of Ld. CIT(A), Panchkula. 2. Since these appeals belonging to the same assessee and heard together, therefore, for the sake of convenience and brevity, these are disposed off by this common order. 3. First we shall deal with the appeal of the department in ITA No. 63/Chd/2020 for the A.Y. 2011-12. Following grounds have been raised in this appeal. 1. Whether on the facts and in the circumstances of the case, the Commissioner of Income Tax (Appeals) is right in law in holding that the interest received by the Assessee under section 28 of the Land Acquisition Act, 1894 during the impugned year on the compulsory acquisition of agricultural land is in the nature of compensation and exempt under section 10(37) of the Income Tax Act, 1961 and is not chargeable to tax under the head Income from Other Sources' under section 56 of the Income Tax Act, 1961? 2. Whether on the facts and in the circumstances of the case, the Commissioner of Income Tax (Appeals) is right in law in disregarding the statutory provision of Clause (viii) under sub ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced on record. 6. In her rival submissions, the Ld. Sr. DR was fair enough to concede that the facts related to the present case are similar and the issue is squarely covered vide aforesaid referred to order dated 23/12/2020 in the case of ITO vs. Shri Lakshmi Chander Gupta (HUF) in ITA No. 68/Chd/2020. 7. After considering the submissions of both the parties and the material placed on record, it is noticed that a similar issue having identical facts has already been decided by the ITAT Chandigarh Bench 'A' Chandigarh in the case of ITO vs. Shri Lakshmi Chander Gupta (HUF) in ITA No. 68/Chd/2020 vide order dated 23/12/2020 wherein the relevant finding have been given in para 7 to 9 of the order which read as under: 7. We have heard the rival submissions of the parties and perused the material on record including the cases relied upon by the parties. As pointed out by the Ld. Counsel the Ld. CIT(A) has decided the issue involved in this appeal in favour of the assessee by following the ratio laid down by the Hon'ble Supreme Court in the case of CIT vs. Ghanshyam 'HUF'(supra) and the decisions of the coordinate Benches of the Tribunal in the cases of So ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompensation given to the assessee of the land acquired would be 'income', the enhanced compensation/consideration becomes income by virtue of Section 45(5)(b) of the Income Tax Act. The question was whether it will cover interest and if so, what would be the year of taxability. The position in this respect is explained in paras 49 and 50 of the judgment which make the following reading: 49. As discussed hereinabove. Section 23(1-A) provides for additional amount. It takes care of the increase in the value at the rate of 12% per annum. Similarly, under Section 23(2) of the 1894 Act there is a provision for solatium which also represents part of the enhanced compensation. Similarly, Section 28 empowers the court in its discretion to award interest on the excess amount of compensation over and above what is awarded by the Collector. It includes additional amount under Section 23(1-A) and solatium under Section 23(2) of the said Act. Section 28 of the 1894 Act applies only in respect of the excess amount determined by the court after reference under Section 18 of the 1894 Act. It depends upon the claim, unlike interest under section 34 which depends on undue delay in ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9.1 The said decision as rightly pointed out by the Ld. counsel for assessee have been rendered by the Hon'ble Apex Court subsequent to the decision passed by the Hon'ble Jurisdictional High Court in the case of Manjeet Singh(HUF) (supra) which had dealt, with the decisions of the Hon'ble Apex Court in Ghanshyam, HUF (supra). Therefore, in view of the same, the proposition laid down in Ghanshyam, HUF (supra) remains and which having been laid down by the Hon'ble Apex Court is the law of the land and has to be followed by all lower authorities. In view of the above, we hold that the interest received by the assessee during the impugned year on the compulsory acquisition of its land u/s. 28 of the Land Acquisition Act, is in the nature of compensation and not interest which is taxable under the head income from other sources u/s. 56 of the Act as held by the authorities below. The compensation being exempt u/s. 10(37) of the Act is not disputed. In view of the same the order passed by the CIT(Appeals) upholding the addition made by the AO on account of interest on enhanced compensation is, not sustainable. The ratio of the order laid down vide order dt. 09/07/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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