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TMI Blog2024 (1) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. AO accepts one of the views. In this view of the matter too, the Ld. PCIT cannot assume revisional jurisdiction as held in CIT vs. Hindustan Coca Cola Beverages P Ltd. [ 2011 (1) TMI 138 - DELHI HIGH COURT] Thus we hold that the order of the Ld. PCIT is not sustainable - Decided in favour of assessee. - Shri M Balaganesh, Accountant Member And Ms. Astha Chandra, Judicial Member For the Assessee : Shri Surajbhan Nain, Advocate, Shri Mahfuzur Rahman, CA For the Department : Shri P.N. Barnwal, CIT-DR ORDER PER ASTHA CHANDRA, JM The appeal filed by the assessee is directed against the order dated 28.03.2023 of the Ld. Principal Commissioner of Income Tax, Rohtak ( PCIT ) passed under section 263 of the Income Tax Act, 1961 (the Act ) pertaining to Assessment Year ( AY ) 2018-19. 2. The assessee has raised the following grounds:- 1. That having regard to the facts and circumstances of the case and in law, the order under section 203 of the Income Tax Act 1961 ( the Act ) dated 28.03 2023 passed by the Ld. Principal Commissioner of Income Tax, Rohtak [PCIT), setting aside the assessment order 143(3) r.w.s. 143(3A) 143(3B) of the Act dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t even if the Assessing Officer has not specifically mentioned that he has examined/verified a particular issue in the assessment order, that would not ipso facto mean that there was non-application of mind on the part of the assessing officer on this issue. 3. Briefly stated, the assessee is an individual. He filed his return for AY 2018-19 on 29.08.2018 declaring income of Rs. 6,35,470/-. His return was processed under section 143(1)(a) on 28.06.2019. His case was selected for complete scrutiny assessment under the e-assessment Scheme, 2019 on two issues, namely refund claim and winning from Lottery/crossword puzzle/horse races. The Ld. Assessing Officer ( AO ) served notice under section 143(2) upon the assessee on 22.09.2019 followed by issue of notice under section 142(1) of the Act on 23.11.2020. The Ld. AO completed the assessment on 22.01.2021 under section 143(3) r.w. section 143(3A) and 143(3B) of the Act on income returned with the observation that on aforesaid two issues no addition is made. 4. In exercise of his powers vested in him under section 263 of the Act, the Ld. PCIT held the impugned order of the Ld. AO as erroneous and prejudicial to the interest of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which included interest under section 28 of Land Acquisition Act of Rs. 3,97,56,460/- which was part of enhanced compensation as held by the Hon ble Supreme Court in CIT vs. Ghanshyam HUF (2009) 315 ITR 1 (SC). It was claimed that the assessee was entitled to exemption under section 10(37) of the Act. The explanation of the assessee was accepted by the Ld. AO who passed the impugned assessment order dated 22.01.2021 without making any addition. The assessment was completed after carrying out proper enquiries which he ought to have carried out in respect of the enhanced compensation received by the assessee. It is not a case of lack of enquiry . Merely because in his order the Ld. AO did not make elaborate discussion but was satisfied with the explanation of the assessee, the order could not be held to be erroneous. In support the decisions of Hon ble Delhi High Court in CIT vs. Sunbeam Auto Ltd. (2011) 332 ITR 167 (Del) and decision of Hon ble Rajasthan High Court in CIT vs. Ganpat Ram Bisnoi 296 ITR 292 (Raj.) were cited. 6.2 The Ld. AR invited our attention to Audit Memo at pages 399-402 of Paper Book in the case of the assessee wherein ITO (Audit) Hisar raised an audit obje ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t dismissed the SLP of the assessee filed against the said decision of Hon ble P H High Court in limine and it is a settled law that the dismissal of SLP in limine does not amount to affirmation of the view taken by the High Court. Unless the judgment of the High Court is affirmed, at least, with short reasoning, the same would not amount to binding precedent. 6.7 The Ld. AR elaborated that the insertion of section 145A, section 145B, section 56(2)(viii) and section 57(iv) by the Finance (No.2) Act, 2009 w.e.f. 01.04.2010 does not change the character of interest under section 28 of the Land Acquisition Act granted by the court from capital receipt forming part of enhanced compensation as envisaged in section 45(5) of the Act to revenue receipt chargeable to tax as income from other sources. The view taken by the Ld. AO that interest under section 28 of Land Acquisition Act received by the assessee is exempt under section 10(37) of the Act is not contrary to law. His assessment order is, therefore, not erroneous and not liable to be revised under section 263 of the Act. 7. The Ld. CIT-DR supported the order of the Ld. PCIT. He placed on record a copy of the decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 142(1) of the Act issued by the Ld. AO the assessee submitted that interest of Rs. 3,97,56,460/- received by the assessee formed part of enhanced compensation as held by the Hon ble Supreme Court in Ghanshyam HUF s case (supra) which the assessee claimed as exempt under section 10(37) of the Act. Pages 1 to 61 of the Paper Book refer. In our opinion, in the light of evidence available on records, it cannot be alleged as done by the Ld. PCIT that it is a case of no enquiry or lack of enquiry . No doubt that the Ld. AO did not discuss elaborately in the assessment order but that alone cannot make the order erroneous as held by the Hon ble Delhi High Court in Sunbeam Auto Ltd. s case (supra) and Hon ble Rajasthan High Court in Ganpat Ram Bisnoi s case (supra). An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous as held by the Hon ble Supreme Court in Malabar Industrial Co. Ltd. vs. CIT 243 ITR 83 (SC). None of these elements exist in the case at hand. 10. Perusal of the order of the Ld. PCIT shows that he assumed the revisionary power under section 263 of the Act mainly on the ground that the Ld. AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter. Interest under section 28 is part of the amount of compensation whereas interest under section 34 is only for delay in making payment after the compensation 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. It is thus evident that the view taken by the Ld. AO that interest under section 28 of Land Acquisition Act received by the assessee is exempt under section 10(37) of the Act is not contrary to law. 12. We notice that in CBDT Circular No. 5, dated 03.06.2010 reported in (2010) 324 ITR (St.) 293, it is stated that the Hon ble Supreme Court in the case of Rama Bai Vs. CIT (supra) 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. With a view to mitigate the hardship section 145A has been substituted and clause (viii) in subsection (2) of section 56 has been inserted by the Finance (No.2) Act, 2009 so as to provide that the interest received on compensation or on enhanced compensation referred to in clause (b) of section 145A shall be assessed as in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ertion of sections 56(2)(viii) and 57(iv), the nature of interest under section 28 of the 1894 Act will remain that of compensation and decisions of the Hon ble Supreme Court in the case of Ghanshyam (HUF) and the decision of Hon ble Gujrat High Court in Movaliya Bhikhubhai Balabhai vs. ITO TDS (2016) 388 ITR 343 were relied upon. 14. It may be mentioned that the Hon ble Supreme Court has affirmed its view taken in Ghanshyam HUF s case and the decision of Gujrat High Court in Movaliya s case in its decision in the case of UOI vs. Hari Singh (2018) 91 taxmann.com 20 (SC). The decision of the Hon ble Supreme Court in Hari Singh s case (supra) was not brought to the notice of Hon ble P H High Court while rendering decision in Mahender Pal Narang s case (supra). Hon ble P H High Court has thus rendered the decision in Mahender Pal Narang s case in its peculiar facts and circumstances. Accordingly, the opinion of the Ld. PCIT that the Ld. AO should have passed the assessment in accordance with the amended law and binding decision in Mahender Pal Narang s case (supra) overlooking the decision of Hon ble Supreme Court in Ghanshyam s HUF s case is not sustainable. Reliance of the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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