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TMI Blog2022 (3) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. It be so done. 3. That it has been held by Hon'ble Supreme Court in case of CIT vs. Ghanshyam Dass HUF that interest awarded u/s. 28 of the Land Acquisition Act is a capital receipt. Hon'ble Apex Court in the case of CIT Vs. Ghanshyam HUF (2009) 315 ITR 1 has held that Interest awarded u/s. 28 of Land Acquisition Act, 1894 is nothing but an accretion to the value of compensation and hence it is part and parcel of compensation. Thus taxability of such interest is of Capital nature and should be included to Consideration received for the purpose of computation of capital gain u/s. 45 of Income Tax Act, 1961. Hence, addition made of Rs. 16,01,945/- be deleted and tax demand of Rs. 764040 is wrong. 4. That This issue has been further 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 While determining as to whether the compensation paid was for agricultural land or not, the assessing officer will keep in mind the provisions of Section 28 of the Land Acquisition Act and the law laid down by this Court in CIT Vs. Ghanshyam HUF [ (2009) (8) SCC 412] in order to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Sawarn Singh S/o. Sh. Niranjan Singh Ref: ITA No. 264/CHD/2021 arising from the Order dated 26.08.2021 of National Faceless Appeal Centre (NFAC) Date Fixed for Hearing: 30.11.2021 Most respectfully, we submit as under: 1. The present appeal is the second appeal arising from the dismissal of First Appeal by National Faceless Appeal Centre (NFAC) Order dated 26.08.2021. 2. In this case the assessee has already submitted the Paper Book. 3. The assessee seeks permission to withdraw second ground of appeal and to add additional grounds of appeal i) On the facts and circumstances of the case the order passed by the learned CIT(A) is bad both in the eyes of law and on facts. ii) On the facts and circumstances of the case the learned CIT(A) has erred both on facts and in law in sustaining the addition on account of interest of enhanced compensation to the extent of interest of Rs. 16,01,945/-. iii) On the facts and circumstance of the case the learned CIT(A) has erred both on facts and in law in confirming the addition, rejecting the contention of the assessee that the amount having been received by Sawarn Singh u/s. 28 of the Land Acquisition Act, the same is not taxabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anchkula Vs. Smt. Chawli Devi, Vill-Ramgarh, Panchkula order dt. 17/05/2021, copy of the said order was furnished which is placed on record. 8. In her rival submissions the Ld. Sr. DR strongly supported the impugned order passed by the Ld. CIT(A) and reiterated the observation made in the impugned order. 9. We have considered the submissions of both the parties and perused the material available on the record. After considering the submissions of both the parties, it is noticed that a similar issue has already been adjudicated by the ITAT, Chandigarh Bench "A", Chandigarh vide order dt. 17/05/2021 in the aforesaid referred to case of ITO Vs. Smt. Chawli Devi (supra) wherein the relevant findings have been given in para 7 which read as under: 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 he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... far as the second question is concerned, that is also covered by another judgment of this Court in Commissioner of Income Tax, Faridabad vs. Ghanshyam (HUF) reported in (2009) 8 SCC 412, 6 albeit, in favour of the Revenue. In that case, the court drew distinction between the "interest" earned under Section 28 of the Land Acquisition Act and the "interest" which is under Section 34 of the said Act. The Court clarified that whereas compensation 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 inte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2) While determining as to whether the compensation paid was for agricultural land or not, the Assessing Officer(s) will keep in mind the provisions of Section 28 of the Land Acquisition Act and the law laid down by this Court in 'Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF)' [2009 (8) SCC 412] in order to ascertain whether the interest given under the said provision amounts to compensation or not." 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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