9911796707
TMI Blog2022 (3) TMI 1031X X X X Extracts X X X X X X X X Extracts X X X X ..... d compensation is exempt in the hands of the recipient land owners. This is obvious from the reading of the provisions of section 10(37) of the Act. Following the judgment of the Hon ble Supreme Court in Ghanshyam (HUF) [ 2009 (7) TMI 12 - SUPREME COURT ], we hold that interest received by the land owners on enhanced compensation awarded to them by the court under section 28 of the LA Act is not in the nature of income from other sources in the hands of the recipient land owners under section 56 of the Act and therefore, the LAO was not under any legal obligation to comply with the TDS provisions of section 194A of the Act. Accordingly, we allow the grounds raised by the assessee by way of additional grounds taken before the Tribunal. The assessee succeeds - ITA Nos. 39, 40 & 41/Del/2021 - - - Dated:- 22-3-2022 - Shri N.K. Billaiya, Accountant Member And Ms. Astha Chandra, Judicial Member For the Assessee : Shri Jitender Wadhwa, CA For the Department : Shri N.C. Swain, CIT DR ORDER PER ASTHA CHANDRA, JM These three appeals of the assessee Land Acquisition Office ( LAO ) are filed against the order dated 5.11.2015 under section 201(1) and 201(1A) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid on enhanced compensation under section 28 of the LA Act and no amount of interest was paid under section 34 of the LA Act and that the interest paid by the assessee has been held to be a part of compensation itself by the Hon ble Jurisdictional High Court in the case of Jagmal Singh (supra) and by the Hon ble Supreme Court in the case of CIT, Faridabad vs. Ghanshyam (HUF) (Civil Appeal No. 440 of 2009). It was also stated that additional grounds of appeal were taken before the Ld. CIT(A) vide letter dated 26.09.2014. The Ld. CIT(A) did not give relief to the assessee on the ground that the issue whether the interest received under section 28 of the LA Act is taxable as income under section 56 of the Act or not and whether such payments are liable to TDS provisions are debatable issues. He further observed that no ground of appeal has been raised by the assessee on these issues in any of the two assessment years 2010-11 and 2011-12. 3.1 In the appellate order for assessment year 2012-13, Ld. CIT(A) reproduced the written submissions dated 30.10.2015 of the assessee in para 3.3 as under:- 3.3. The AR of the appellant filed written submissions dated 30.10.2015. Relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aim by the person whose land is acquired whereas interest under section 34 is for delay in making payment. This vital difference need to be kept in mind in deciding this matter i.e. Interest under section 28 is a part of the amount of compensation whereas interest under section 34 is only for delay in making payment after amount is determined. Interest under section 28 is a part of enhanced value of the land which is not the case in the matter of payment of interest under section 34. 11. As per the judgment of Hon' ble Punjab Haryana High court in case of Jagmal Singh Others Vs State of Haryana Others, on 18th July 2013, it has been held that it is clear from the observations of the Supreme Court that interest under sec 28, unlike under Section 34 of the 1894 Act, is an accretion in value and regarded as part of the compensation itself which is not the case of interest under section 34. With a clear statement of Law obtaining through the Supreme Court I would have no difficulty in saying that any part of component of compensation that goes towards the discharge of liability under Sec 28 must be taken as part of the compensation to which Section 194LA shall apply an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1894 is part of the amount of compensation whereas interest under section 34 thereof is only for delay in making payment after the compensation amount is determined. Interest under section 28 is a part of the enhanced value of the land which is not the case in the matter of payment of interest under section 34. 4. On the facts and circumstances of the case, the Ld. Principal Commissioner of Income Tax was not justified in passing the order on facts and in law in view of the latest decision of the Hon hie Supreme Court in the case of CIT v. Chet Ram (HUF) dated 12.09.2017 in Civil Appeal No. 13053/2017 wherein also the Honhle Supreme Court has again reiterated the proposition laid down in the case of Ghanshyam (HUF), which has been further reiterated in the case of Union of India v. Hari Singh others in Civil Appeal No. 1504 of 2017 dated 15.09.2017 wherein it was held that the interest received by the assessee during the impugned year on the compulsory acquisition of its land under section 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 under section 5b of the Act as held by the auth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under compulsory acquisition for public purposes as per the directions of Haryana Urban Development Authority (HUDA). The land owners got enhanced compensation which was awarded by the court on which they received interest. 7.1 The issue for consideration is whether the impugned interest received by the land owners on enhanced compensation is income from other sources under section 56 of the Act attracting the TDS provision enshrined under section 194A of the Act. In the assessment proceedings for the assessment year 2012-13 the assessee submitted before the Ld. AO that no TDS is required to be deducted on the interest payments which fall under section 28 of the LA Act relying on the decision of the Hon ble Jurisdictional High Court in the case of Jagmal Singh (supra) and during appellate proceedings filed an affidavit that interest on enhanced compensation was paid to the recipient land owners under section 28 of the LA Act and submitted that the provision of section 194A do not apply for the reason that interest under section 28 is a part of the amount of compensation itself. It was pointed out that there is vital difference between interest awarded under section 28 and in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
