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TMI Blog2023 (3) TMI 978X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Punjab and Haryana High Court has clearly stated that interest received u/s 28 of Land Acquisition Act , 1894 is taxable u/s 56(2)(viii) r.w.s. 57(iv) and 145A of the Income Tax Act. 2. On the facts and circumstances of the case, the Ld.CIT(Appeals) has erred in law by treating the interest received u/s 28 of the Land Acquisition Act, 1894 as Non-taxable. Hon'ble Apex Court in the case of Manjeet Singh HUF Vs. CIT has already upheld the decision of Hon'ble Punjab and Haryana by dismissing the SLP filed against the High Court Decision the interest received u/s 28 and 34 of Land Acquisition Act, 1894 are taxable." 3. In this case, Assessing Officer noticed that the assessee has claimed that he is an agriculturist and owning approx. 80 acres of land. AO further gathered that assessee has received interest in enhanced compensation of land of Rs.1,22,55,550/- on 14.06.2011 and Rs.2,14,04,697/- on 22.03.2012. AO issued show-cause notice as to why as per amended provisions of Income-tax Act interest be not taxed as income from other sources after allowing a deduction of 50% of such income in the year of receipt. AO proceeded to reject all the assessee's submissions a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of clause (c) because the right to receive payment under the 1894 Act is not in doubt. 55. It is important to note that compensation, including enhanced compensation/ consideration under the 1894 Act, is based on the full value of property as on the date of notification under Section 4 of that Act. When the court/tribunal directs payment of enhanced compensation under Section 23(1-A), or Section 23(2) or under Section 28 of the 1894 Act it is on the basis that award of the Collector or the court, under reference, has not compensated the owner for the full value of the property as on date of notification." Thus, it is clear that the Supreme Court after considering the scheme of section 45(5) of the LT. Act has categorically held that payment made under section 28 of the Act of 1894 is enhanced compensation, as a necessary corollary, therefore, the contention that payment made under section 28 of the Act of 1894 is interest as envisaged under section 145A of the LT. Act and has to be treated as income from other sources, is unjustified and against the law laid down by the Apex Court. 6.2 In case of Union of India Vs Hari Singh & others, civil appeal no. 15041 -2017 dated 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erest u/s 28 is the part of enhanced value of land which is not the case in the matter of interest u/ s 34. Thus it was held by Hon'ble Gujrat High Court that in the light of the law laid down by the Supreme court in case of Ghanshyam HUF the interest received vi] s 28 of the LAC Act would not fall within the ambit of expression 'interest' as envisaged u/s 145A (B) of the Act as the Supreme Court has held that interest received u/s 28 of the LAC Act is not in the nature of interest but an accretion to the compensation and forms part of compensation. Hon'ble Gujrat High Court has repelled the argument that the decision of Ghanshyam HUF was rendered in 2009 and there was an amendment in Finance Act w.e.f. 1st April 2010 in section 145A. It is discussed in this order that the CBDT circular no. 5/2010 dated 03.06.2010, in para 46.1 has clarify the purpose of this amendment and that it was in the context of the decision of Hon'ble Supreme court in case of Smt. Rama Bai vs CIT, 1990, 84 CTR 164 where it was held that arrears of interest computed on delay or enhanced compensation shall be taxable on accrual basis. Further in para 46.3 it is mentioned that income by way ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Supreme Court have discussed the matter and decided it in favour of the assessee. Therefore, respectfully following the decision of Hon'ble Supreme Court in case of Union of India Vs Hari Singh & others, civil appeal no. 15041 -2017 dated 15.09.2017, and CIT vs Ghanshyam HUF, 2009, 182 Taxmann 368, jurisdictional Hon'ble ITAT Delhi's decision in cases of Jagmal Singh through LH vs ITO Ward- 2 (2) Gurgaon, Hon'ble ITAT Delhi 'D + SMC' Bench in its order dated 20.09.2018 and Rameshwar Vs ITO Ward-3 (4) Gurgaon and others, in ITA No. 685/Del/2017, A.Y. 2013-14,the appeal of the assessee is allowed and it is held that Rs.3,36,60,247/-, received as interest under section 28 of Land Acquisition Act, 1894 forms part of enhanced compensation received on acquisition of agricultural land. Thus, the addition made by the AO on this account is hereby deleted." 5. Against this order, assessee is in appeal before us. We have heard both the parties and perused the records. 6. Ld. Counsel of the assessee reiterated that he would rely upon the order of ld. CIT (A) and also the case laws relied upon therein. Ld. Counsel further submitted that there are other ser ..... X X X X Extracts X X X X X X X X Extracts X X X X
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