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TMI Blog2024 (5) TMI 343X X X X Extracts X X X X X X X X Extracts X X X X ..... t u/s 10(37) of the Act, 1961. 2. CIT(A) has erred in not following Pune ITAT Jurisdictional Tribunal decisions which are binding on him, brought to his Notice. Appellant prays to delete addition sustained by CIT(A). 3. The Order u/s 143(3) passed is Bad in Law and ab-initio invalid as Notice u/s 143(2). Not issued by Jurisdictional Officer (Para- 1 of Assessment Order). Appellant prays for cancellation of Order. 4. CIT(A) is not Just and Fair in not cancelling the Order and Confirming addition. 5. Assessee denies Liability to Interest under subsections of Sec. 234. 6. Appellant prays to add, alter, amend, take additional grounds, submit additional evidence appellate Proceedings." 3. Suffice to say, the assessee's sole substantive grievance raised herein seeks to reverse both the learned lower authorities action assessing it's interest received u/Sec. 28 of the Land Acquisition Act, 1894 granted by the learned Reference Court, u/Sec. 56(2)(viii) r.w.s.145A of the Act qua the amount in question of Rs. 2,65,38,689/- in the Assessing Officer's assessment herein dated 27.12.2018. Both the learned Assessing Officer as well as the NFAC herein are of the opinion that in lig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tain submissions which did not find favour with the Assessing Officer (AO). Treating 50% of the interest income as deductible in terms of section 57(iv), the AO added net interest income of Rs. 34,16,010/- u/s. 56(2)(viii) of the Act. The ld. CIT(A), relying on certain decisions, which we will advert to in the later part of the order, jettisoned the claim of the assessee thereby approving the view of the AO in bringing to tax the interest income u/s. 56(2)(viii) of the Act. Aggrieved thereby, the assessee has approached the Tribunal. 4. We have heard both the sides through virtual court and cogitated over the relevant material on record. Indisputably, the amount of net interest income computed by the AO u/s. 56(2)(viii) of the Act pertains to section 28 of the LAA. The assessee treated such amount as part of the enhanced compensation of land and claimed the same as exempt from tax on the ground that the land itself was agricultural. To buttress the contention that interest u/s 28 of the LAA is a part of compensation and hence not chargeable to tax, the ld. AR chiefly relied on the judgment of the Hon'ble Supreme Court in CIT Vs. Ghanshyam (HUF) (2009) 315 ITR 1 (SC) before the Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A once again came up for consideration before the Hon'ble jurisdictional High Court in a batch of 13 petitions with the lead case of Shivajirao S/o Dnyanoba Ghanwat & Ors. VS. The State of Maharashatra & Ors. (WP No. 5402 of 2013). The petitioners contended that the tax was deducted at source on the entire amount of compensation awarded in Land Acquisition proceedings, including the interest u/s 28 of the Land Acquisition Act, which was not deductible in the light of the judgment of the Hon'ble Supreme Court in Ghanshyam (HUF) (supra). Per contra, the Respondent made out a case that tax at source was rightly deductible as there was no difference between the interest granted u/s 28 and 34 of the LAA. This view was bolstered on the basis of an earlier judgment of the Hon'ble Supreme Court in Bikram Singh (supra) 224 ITR 551 (SC). The Hon'ble Bombay High Court, vide its judgment dated 27.08.2013 (copy at pages 69 onwards of the assessee's paper book), recorded the petitioner's contention in para 8 and that of the respondent in paras 3 read with 4. In para 5 of the judgment, their Lordships found that: 'Section 34 casts obligation upon Collector to pay interest after compensation is wo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied by the Hon'ble Supreme Court. 8. The ld. AR then submitted that the Hon'ble Supreme Court in Union of India and others Vs. Hari Siingh and others (2018) 302 CTR 0458 (SC) has considered a similar issue and decided the same in favour of the assessee. It was then contended that since the judgment of the Hon'ble jurisdictional High Court was rendered prior to that of Hon'ble Supreme Court in Hari Singh and others (supra), the latter should be followed in preference to the former. 9. We are unable to find any relevance of the judgment of Hon'ble Supreme Court in Hari Singh and others (supra), insofar as the issue under consideration is concerned. In that case, the Land Acquisition Collector deducted tax at source from compensation on account of compulsory acquisition of land and deposited the same with the exchequer. A writ petition was filed in the High court urging that no deduction of tax at source was permissible in view of the provisions of section 194LA of the I.T. Act, since the land which was acquired was agricultural land and this provision categorically mentions that in respect of agricultural land, tax at source was not to be deducted. The Hon'ble High Court directe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Respectfully following the judgment of the Hon'ble jurisdictional High Court in Shivajirao (supra) and the judgment of Hon'ble Punjab & Haryana High Court in Manjeet Singh (supra) along with the statutory amendment carried out to section 56(2) inserting clause (viii) w.e.f. 01- 04-2010, it is overt that the ld. CIT(A) has taken an unexceptionable view in the matter pertaining to the A.Y. 2013-14. We, therefore, uphold the same. This ground is not allowed." 5. We have heard the foregoing vehement rival contentions. It transpires that the instant issue of taxability of the assessee's interest income received under section 28 of the Act is covered in assessee's favour as per the hon'ble high court's Bombay bench holding that the same is not taxable under section 56(2)(viii) of the Act as against the Revenue's contentions that the Aurangabad bench of the very hon'ble jurisdictional high court has taken a divergent view against the taxpayer in Shivajirao and Others Vs. State Writ Petition No.5042/2013 dated 27.08.2013(supra). 6. Faced with the situation, we are of the opinion that it is the Bombay and not Aurangabad bench of the hon'ble jurisdictional high court whose decision woul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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