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TMI Blog2023 (11) TMI 704X X X X Extracts X X X X X X X X Extracts X X X X ..... (ii) CIT vs. Govindbhai Mamaiya (2014) 367 ITR 498 (SC) (iii) UOI vs. Hari Singh (2018) 91 Taxmann.com 20 (SC) 3. For the sake of ready reference, one such order of the Tribunal in the case of Smt Ramesh Bai vs. ITO, Bhiwani in ITA no. 4193 to 4195/Del/2019 is reproduced herewith:- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceived in respect of agricultural land belonging to the assessee which had been acquired by the state government. Therefore, the same comes under the purview of Section 28 of the Land Acquisition Act. The Bangalore Tribunal in case of Shri Vasavaraja M Kudarikannur (supra) held as under:- "11. We have heard the rival submissions of the ld. DR, who relied upon the order of the AO. We have considered the submissions of the ld. DR. It is not disputed by the AO that the land acquired was agricultural land and the conditions laid down u/s. 10(37)(i) to (iv) are applicable to the land which is in question which was compulsorily acquired. It is also not in dispute that the interest in question was interest awarded u/s. 28 of the Land Acquisition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of compensation is taxable as per the provisions of section 57(iv) read with sections 56(2)(viii) and 145A(b) of the Act under the head income from other sources. Being aggrieved by such order, the Assessee filed writ petition before Hon'ble Gujarat High Court. The question before the Court was whether interest awarded u/s. 28 of the Act of 1894 is akin to compensation and chargeable to tax u/s. 45(5) of the Act or under the head "Income from other sources" u/s. 57(iv) read with Sec.56(2)(viii) and 145A(b) of the Act. The Hon'ble Gujarat High Court held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t respondent Income Tax Officer seeks to tax the interest received by the ITA Nos. 1747 & 1750/Bang/2017 petitioner under section 28 of the Act of 1894 as income from other sources under section 56(2)(viii) read with section 145A(b) of the I.T. Act. In the opinion of this court, in the light of the law laid down by the Supreme Court 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, for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee. Further the Hon'ble Supreme Court in the case of Smt. Rama Bai v. CIT (1990) 84 CTR (SC) 164 : (1990) 181 ITR 400 (SC) has held that arrears of interest computed on delayed or enhanced compensation shall be taxable on accrual basis. This has caused undue hardship to the taxpayers. 46.2 With a view to mitigate the hardship, section 145A is amended to provide that the interest received by an assessee on compensation or enhanced compensation shall be deemed to be his income for the year in which it was received, irrespective of the method of accounting followed by the assessee. 46.3 Further, clause (viii) is inserted in sub-section (2) of the section 56 so as to provide that income by way of interest received on comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ified 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 source. Consequently, the challenge to the above communication has become infructuous and hence, the prayer clause came to be modified. However, since the amount pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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