9911796707
TMI Blog2024 (4) TMI 408X X X X Extracts X X X X X X X X Extracts X X X X ..... nos. 5 and 5.1, which read as under:- "5. The central issue which arises for consideration is: whether interest received by the respondent/assessee under Section 28 and 34 of the Land Acquisition Act, 1894 would fall under the provisions of Section 10(37) and Section 56(2)(viii) of the Income Tax Act, 1961 [in short, "Act"]? 5.1. We may note that it would also be necessary to examine the provisions of Section 45(5)(c) of the Act." 4. At the outset, we are formally admitting the instant appeal on the following substantial question of law:- Whether the ITAT has erred in setting aside the concurrent view of the AO and the Commissioner of Income Tax (Appeals) ["CIT(A)"] which held that after amendment of Section 56 of the Act vide Finance (No. 2) Act, 2009 (w.e.f. 01.04.2010), no benefit can be derived by the respondent-assessee from the decision of the Hon'ble Supreme Court in the case of CIT v. Ghanshyam (HUF) [(2009) 315 ITR 1 (SC)]? 5. The facts of the case would show that the respondent-assessee had filed its Income Tax Return ["ITR"] on 05.08.2016, declaring the income to the tune of Rs. 3,08,920/-. The said ITR filed by the respondent-assessee was selected for scruti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 019. The CIT(A) found that since Section 56 of the Act was amended by the Finance (No. 2) Act, 2009, which led to the introduction of Section 56(2)(viii) of the Act with effect from 01.04.2010, therefore, the decision relied upon by the respondent-assessee herein was not applicable as the same pertained to the year prior to the said amendment. 11. Against the order of the CIT(A), the respondent-assessee preferred an appeal before the ITAT, whereby, vide order dated 19.06.2020, the appeal of the respondent-assessee was allowed. While relying upon the judgment of the Hon'ble Supreme Court in the case of Ghanshyam (supra), the ITAT drew an equivalence between the interest received under Section 28 of the 1894 Act and the enhanced compensation. It was further held that since the interest amounts to accretion to the value of compensation, therefore, the same must be treated as a part of compensation. 12. It is in the aforesaid context that the Revenue has preferred the instant appeal against the order of the ITAT. 13. Learned counsel appearing on behalf of the Revenue submitted that the ITAT has erroneously rejected the concomitant findings of the AO and the CIT(A) that the issue at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act of 1894, which deal with the payment of interest on compensation, and read as under:- "28. Collector may be directed to pay interest on excess compensation.- If the sum which, in the opinion of the court, the Collector ought to have awarded as compensation is in excess of the sum which the Collector did award as compensation, the award of the Court may direct that the Collector shall pay interest on such excess at the rate of [nine per centum] per annum from the date on which he took possession of the land to the date of payment of such excess into Court." *** "34. Payment of interest.- When the amount of such compensation is not paid or deposited on or before taking possession of the land, the Collector shall pay the amount awarded with interest thereon at the rate of nine per centum per annum from the time of so taking possession until it shall have been so paid or deposited. Provided that if such compensation or any part thereof is not paid or deposited within a period of one year from the date on which possession is taken, interest at the rate of fifteen per centum per annum shall be payable from the date of expiry of the said period of one year on the am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsation referred to in [sub-section (1) of Section 145-B].]" 23. For the sake of clarity, Section 145-B of the Act is reproduced as under:- "[145-B. Taxability of certain income.-(1) 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. (2) Any claim for escalation of price in a contract or export incentives shall be deemed to be the income of the previous year in which reasonable certainty of its realisation is achieved. (3) The income referred to in sub-clause (xviii) of clause (24) of Section 2 shall be deemed to be the income of the previous year in which it is received, if not charged to income-tax in any earlier previous year.]" 24. A conjoint reading of the aforementioned provisions i.e., Sections 56(2)(viii) and 145-B of the Act vividly stipulate that the income received by way of interest on compensation or on enhanced compensation shall be chargeable to tax under the head "income from other sources". Therefore, since the position with respect to the imposition of ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oversy is no longer res integra. This question was considered elaborately by this Court in Sham Lal Narula (Dr) v. CIT [(1964) 53 ITR 151 : AIR 1964 SC 1878]. Therein, K. Subba Rao, J., as he then was, considered the earlier case-law on the concept of "interest" laid down by the Privy Council and all other cases and had held at p. 158 as under: "In a case where title passes to the State, the statutory interest provided thereafter can only be regarded either as representing the profit which the owner of the land might have made if he had the use of the money or the loss he suffered because he had not that use. In no sense of the term can it be described as damages or compensation for the owner's right to retain possession, for he has no right to retain possession after possession was taken under Section 16 or Section 17 of the Act. We, therefore, hold that the statutory interest paid under Section 34 of the Act is interest paid for the delayed payment of the compensation amount and, therefore, is a revenue receipt liable to tax under the Income Tax Act." 9. This position of law has been consistently reiterated by this Court in the case of T.N.K. Govindaraju Chetty v. CIT [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion." 21. The Assessing Officer in I. T. A. No. 132 of 2018 where the assessee had received Rs. 11,30,561 as interest income, held that the interest payment received on compensation/enhanced compensation to the tune of Rs. 5,65,280 (50 per cent. of Rs. 11,30,561) is taxable as income from other sources as per provisions of sections 56(2)(viii) read with 57(iv) and section 145A(b) of the Act for the assessment year 2010-11. The Commissioner of Income-tax (Appeals) and the Tribunal had upheld the order of the Assessing Officer in that regard. 22. No illegality or perversity could be pointed out by learned counsel for the assessee in the concurrent findings of fact recorded by the authorities below which may warrant interference by this court. No question of law, much less, substantial question of law arise in these appeals. 23. Accordingly, finding no merit in the appeals, the same are hereby dismissed." [Emphasis supplied] 29. Considering the foregoing discussion, we affirm the concurrent findings of the AO and CIT(A) and find that the view taken by the ITAT is unsustainable, as the same is based on an incorrect appreciation of law. The 2010 amendment was a conscious d ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
