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TMI Blog2022 (5) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... /2019 I.T.A No. 4194/Del/2019 I.T.A No. 4195/Del/2019 - - - Dated:- 28-4-2022 - SHRI CHALLA NAGENDRA PRASAD, JUDICIAL MEMBER, S.M.C. Assessee by : Shri Mahavir Singh, Advocate Revenue by : Shri Om Parkash, Sr. D. R. ORDER PER C. N. PRASAD, J. M. 1. These three appeals are filed by different assesses of the same family against different orders of the ld. Commissioner of Income Tax (Appeals)-5, Ludhiana [hereinafter referred to CIT (Appeals)] dated 25.01.2019 and 12.03.2019 for assessment year 2013-14. 2. The only common issue in all these appeals is as to whether the interest received under Section 28 of the Land Acquisition Act (hereinafter referred to LA Act) from Government, on delayed Award of compensation on compulsory acquisition of agricultural land, is taxable as income of the assessee from other sources. 3. The ld. Counsel for the assessee, at the outset, submits that the issue is squarely covered by the decision of the Tribunal in the case of Jagmal Singh Vs. Income Tax Officer in ITA. No. 2340 (Del) of 2018 dated 20.09.2018 wherein identical issue has been decided holding that interest received, under Section 28 of the LA Act, by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the Hon'ble Gujarat High Court was that the petitioner's agricultural lands came to be acquired under the provisions of the Act of 1894 for the public purpose of the Ozat-2 Irrigation Scheme. The award passed by the Collector came to be challenged by the petitioner before the learned Principal Senior Civil Judge, Junagadh (hereinafter referred to as the Reference Court ), who by an order dated 20th March, 2011 awarded additional compensation of Rs. 5,01,846/- in favour of the petitioner together with other statutory benefits. Pursuant to such award, the second respondent calculated the amount payable to the petitioner and in terms of the statement showing the amount of compensation to be deposited in the court, computed an amount of Rs. 20,74,157/- as payable to the petitioner by way of interest under section 28 of the Act of 1894. The petitioner made an application under section 197(1) of the Income Tax Act, 1961 (Act) for deciding the tax liability of interest and to issue a certificate as to NIL tax liability. The application was rejected on the ground that the interest amount on the delayed payment of ITA Nos. 1747 1750/Bang/2017 compensation and enhanced value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt in the case of Ghanshyam (HUF) (supra), the interest received under section 28 of the Act of 1894 would not fall within the ambit of the expression interest as envisaged under section 145A(b) of the I.T. Act, inasmuch as, the Supreme Court in the above decision has held that interest under section 28 of the Act of 1894 is not in the nature of interest but is an accretion to the compensation and, therefore, forms part of the compensation. It was argued on behalf of the Revenue before the Hon'ble Gujarat High Court that the decision of Hon'ble Supreme Court in the case of Ghanshyam (HUF) was rendered prior to the substitution of section 145A of the I.T. Act by Finance (No. 2) Act, 2009 with effect from 1st April, 2010, and hence, would have no applicability cases pertaining to AY 2010-11 and afterwards. Such an argument was repelled by the Hon'ble Gujarat High Court as follows: 11. It has been vehemently contended on behalf of the first respondent that the above decision has been rendered prior to the substitution of section 145A of the I.T. Act by Finance (No. 2) Act, 2009 with effect from 1st April, 2010, and hence, would have no applicability to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hanced compensation in section 145A of the I.T. Act, the same have to be construed in the manner interpreted by the Supreme Court in Ghanshyam (HUF)'s case (supra). ITA Nos. 1747 1750/Bang/2017 13. The Hon'ble Gujarat High Court finally concluded, as follows: 13. The upshot of the above discussion is that since interest under section 28 of the Act of 1894, partakes the character of compensation, it does not fall within the ambit of the expression interest as contemplated in section 145A of the I.T. Act. The first respondent - Income Tax Officer was, therefore, not justified in refusing to grant a certificate under section 197 of the I.T. Act to the petitioner for non-deduction of tax at source, inasmuch as, the petitioner is not liable to pay any tax under the head income from other sources on the interest paid to it under section 28 of the Act of 1894. 14. The petitioner had earlier challenged the communication dated 9th February, 2015 whereby its application for a certificate under section 197 of the I.T. Act had been rejected, and subsequently, tax on the interest payable under section 28 of the Act of 1894 has already been deducted at so ..... X X X X Extracts X X X X X X X X Extracts X X X X
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