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TMI Blog2022 (11) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... Singh case (supra) wherein it has been held that the interest received as income on the delayed payment of the compensation determined u/s. 28 or 3l of the Land Acquisition Act, is a taxable event, Manjeet Singh (HUF) case and Balasah Raosaheb Bidwe and others (supra) cited above, I hold that there is no infirmity in the order passed by the Assessing Officer, whereby compensation received u/s.28 of the L.A. Act was brought to tax in terms of section 56(2)(viii) of the I.T. Act. 10. The assessee has also contended that he has received only 25% of the amount deposited in the court out of 50% of the amount which was permitted to be withdrawn by furnishing solvent security. It was stated whether the matter has not reached the final stage, the question about levy of tax thereon does not arise. The assessee also relied on certain decisions in support of this contention. He specifically relied on the decision given in the case of CIT vs., Abdul Mannan Shah Mohammad [2001] 248 ITR 614 (Bombay). In the case of Abdul Mannan (supra) the assessee's land was acquired by the government. He was awarded a sum of Rs.33,80,172/- which included a sum of Rs. 13.50 lakhs as interest on additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... direction of the Hon'ble Court, then the same shall also brought to tax due to the fact of the assessee having received the said amount. The amount of interest which has not been received by the assessee cannot be brought to tax by virtue of operation of the provisions of section 145 clause-(b). 12. As far as the reliance of the proviso to section 45(5) after clause (b) of sub-section (5) of section 45 by the Finance (No.2) Act, 2014 with effect from 01/04/2015 is concerned, I hold that the same shall be applicable in respect of compensation received on or after 01.04.2015. This is for the reason that the Act does not specify the retrospective operation of the said proviso. Since in this case it appears that compensation was received by the assessee pursuance of the order of the Hon'ble High Court dated 10/07/2013, contents of the proviso to section 45(5) after clause-(b) shall not apply." 3. Mr. Shah vehemently argued in support of the assessee's pleadings that both the learned lower authorities have erred in law and on facts in taxing the impugned interest income. We find that this tribunal recent coordinate bench decision in ITA No.1012/PUN/2017 Basweshwar Mallikarju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o in sub-section (1) of section 145B" shall be chargeable to income-tax under the head "Income from other sources". Section 145B(1) provides that: "Notwithstanding anything to the contrary contained in section 145, the interest received by an assessee on any compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the previous year in which it is received". Thus it is palpable that post the decision in Ghanshyam (supra), a statutory amendment has been carried out providing that income by way of interest received on compensation or on enhanced compensation shall be chargeable to income-tax under the head "Income from other sources". 5. The question of taxability of interest received u/s 28 of the LAA came up for consideration before Hon'ble Punjab & Haryana High Court in the case of Manjet Singh (HUF) Karta Manjeet Singh Vs. Union of India (2016) 237 Taxman 0116 (P&H). It noted another judgment of three Judges of the Hon'ble Apex Court in Bikram Singh vs. Land Acquisition Collector, (1997) 224 ITR 551(SC) following Dr. Shamlal Narula vs. CIT (1964) 53 ITR 151 (SC) holding that interest under Section 28 of the 1894 Act was a revenue receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judgment, the Department and Disbursing Authorities are bound to effect deduction of TDS'. On the interplay between the Hon'ble Apex Court judgments in Ghanshyam (supra) & Bikram Singh (supra), the Hon'ble Bombay High Court in para 4 found the: `issue to be squarely covered by the larger Bench judgment of the Apex court' in Bikram Singh (supra). Then it noted in para 9 of the judgment that: "We have perused para 24 and 25 of the judgment of the Apex Court in Commissioner of Income Tax Vs. Ghanshyam (supra). We find that the Hon'ble Apex Court there, was not called upon to look into the Larger Bench judgment delivered earlier in case of Bikram Singh (supra). In para 7, the Hon'ble Larger Bench has found that the interest paid u/s.28 is not by way of any charge on compensation determined u/s.23(1). We, therefore, with respect, follow the larger Bench judgment of the Hon'ble Apex Court". Thus it is plentifully lucid that the Hon'ble jurisdictional High Court has categorically held that interest u/s 28 of the Land Acquisition Act is chargeable to tax. 7. The ld. AR submitted that the Hon'ble jurisdictional High Curt has not correctly appreciated the legal position inasmuch as the de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er should have been remitted to the AO for deciding the nature of land acquired and not the Collector as it was the AO who was to come to the conclusion whether land was agricultural or not. Accepting the contention on behalf of the Revenue, the Hon'ble Supreme Court held that the claimant should approach the concerned AO and raise the issue that no tax was payable on compensation/enhanced compensation which was received by them as their land was agricultural land. It was further observed that, while determining as to whether the compensation paid was for agricultural land or not, the AO will keep in mind the provisions of Section 28 of the Land Acquisition Act and the law laid down by this Court in CIT, Faridabad Vs. Ghanshyam (HUF) in order to ascertain whether the interest given under the said provision amounts to compensation or not. It is abundantly clear that the judgment in the case of Hari Singh and others (supra) is based an altogether different factual matrix in which the question was as to whether it was the Collector or the AO who will decide as to whether any tax was payable on compensation/enhanced compensation. This issue came to be decided by Hon'ble Supreme Court b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ference to the DVO for determining the value of the said land as on 1.4.1981, which was found at Rs.16,000/- per hector. On this basis, he computed long term capital gain at Rs.38,58,365/-. The ld. CIT(A) affirmed the order of the AO on this count. 13. Before us, the ld. AR contended that the authorities below erred in considering the correct piece of land acquired by the assessee. It was submitted that, in fact, land at Gut No.11, Vasangaon was acquired in respect of which the extant compensation was awarded. He submitted that the AO wrongly took note of some different land at Khadgaon, Tq. Latur, which was not acquired. In support of his contention, the ld. AR placed on record a Notice with reference to land at Vasangaon. Certain additional evidence were also sought to be placed on record to demonstrate that the land of the assessee acquired by the competent authority, which resulted into receipt of the amount, was at Gut No.11 Vasangaon and not Khadgaon, Tq. Latur. 14. There is complete contrast in the version of the AO and the assessee. Whereas the case of the AO is that the land acquired was situated at Khadgaon, the assessee is contending that it was at Gut No. 11 Vasanga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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