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TMI Blog2024 (8) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... ndividual, filed return of income declaring a total income of Rs.52,879/- and claimed refund of Rs.14,27,712/- on account of TDS. The said return was processed u/s. 143(1) of the Act. Under scrutiny, notices u/s. 143(2) and 142(1) of the Act were issued and the assessee appeared in person before the AO and furnished the documents as called for. According to the AO, the assessee received an amount of Rs.2,10,45,467/- from Special Land Acquisition Officer, Udgir on account of enhanced compensation on compulsory acquisition of agricultural land belonging to the assessee and interest on enhanced compensation vide order dated 22-04-2008 on the file of Civil Judge, S.D., Ahmedpur. The said details were reproduced at page 2 of the assessment order which are reproduced as under for ready reference: S. No. Nature of payment Amount 1 Solatium Rs.71,84,187/- 2 Interest u/s. 28 of L.A. Act @ 9% (17.06.1999 to 16.06.2000). Rs.6,46,577/- 3 Interest u/s. 28 of L.A. Act @ 15% (17.06.2000 to 31.08.2012). Rs.1,31,61,824/- 4 Interest u/s. 34 of L.A. Act. Rs.52,879/- Total Rs.2,10,45,467/- 5. The assessee contended that Sl. No. 1, 2 and 3 above are relating to Sola ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interest on the excess amount of compensation over and above what is awarded by the Collector. The interest u/s. 28 of the Land Acquisition Act is only applicable in respect of excess amount determined by the Court after reference u/s. 18 of the Land Acquisition Act. Further, the Hon'ble Supreme Court deliberated the interest u/s. 28 of the Land Acquisition Act is unlike interest u/s. 34, is an accretion to the value, hence, it is a part of enhanced compensation or consideration, which is not the case with interest u/s. 34 of the Act. 7. The ld. DR, Shri M.G. Jasnani submits that the Co-ordinate Bench of this Tribunal in the case of Bashewar Mallikarjun Bidwe in ITA No.1012/PN/2017 for A.Y. 2013-14 confirmed the order of CIT(A) in holding that the interest u/s. 28 of the Land Acquisition Act is chargeable to tax by placing reliance in the case of Shivajirao of Hon'ble High Court of Bombay at Aurangabad along with statutory amendment carried out to section 56(2) inserting Clause (viii) w.e.f. 01-04-2010. He drew our attention to the para No. 10 of the said order. Further, he submits that the Co-ordinate Bench of this Tribunal in the case of Madhav Pandharinath Kande reported in 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r causes the land to be measured and make a plan for the same u/s. 8 of the Land Acquisition Act. The Collector u/s. 9 of the Land Acquisition Act issues public notice stating that the Government intends to take possession of the land and claims may be made to him u/s. 10 of the Land Acquisition Act. The Collector requires to make the statement containing names of every person possessing any interest in the land. The Collector conducts enquiry and passes order u/s. 11 of the Land Acquisition Act. Any person interested who has not accepted the award passed by the Collector may, by written application to the Collector requesting the matter be referred for determination of Court u/s. 18 of the Land Acquisition Act in respect of amount of compensation etc. within six weeks from the date of the Collector's award. It is pertinent to note that granting of additional amount of compensation is the subject matter under reference u/s. 18 of the Land Acquisition Act. We note that section 25 explains amount of compensation awarded by the Court not to be lower than the amount awarded by the Collector. If Court opines the Collector ought to have awarded as compensation in excess of the sum alread ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e interest u/s. 28 of the Land Acquisition Act is chargeable to tax by placing reliance in the case of Shivajirao of Hon'ble High Court of Bombay at Aurangabad along with statutory amendment carried out to section 56(2) inserting Clause (viii) w.e.f. 01-04-2010. 13. Vide order dated 28-04-2022, the Co-ordinate Bench of this Tribunal in the case of Madhav Pandharinath Kande reported in 140 taxmann.com 105 (Pune-Trib.) by following the decision of Hon'ble Supreme Court rendered by three Judges Bench in the case of T.N.K. Govindaraju Chetty reported in 66 ITR 465 and insertion of 56(2)(viii) through Finance Act, 2009 w.e.f. 01-04-2010 held the law laid down by the Ghanshyam (HUF) (supra) is not applicable and interest received on enhanced compensation referred to in clause (b) of section 145A is income from other sources, chargeable to tax. 14. Vide order dated 27-08-2013, the Division Bench i.e. two Judges Bench of Hon'ble High Court of Bombay at Aurangabad in batch of cases lead case being Shivajirao in Writ Petition No. 5402 of 2013 decided a dispute whether in facts TDS has been deducted only on amount of compensation or then on amount of interest also. The Hon'ble High Court wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orm part of the compensation itself. The Hon'ble High Court in order to come to such conclusion observed that there was three crucial dates i.e. (i) is the date of accident, (ii) is date of filing of the claim petition and (iii) is date of passing of the award by Claims Tribunal vide para 56. The Hon'ble High Court was pleased to hold that the interest awarded in the motor accident claims cases from the date of the Claim Petition till the passing of the award or in case of Appeal, till the judgment of the High Court in such Appeal, would not be exigible to tax, not being an income. Further, categorically held the said position would not change on account of clause (b) of section 145A of the Act as it stood at the relevant time amended by Finance Act, 2009 which provision now finds place in sub-section (1) of section 145B of the Act. Neither clause (b) of section 145A, as it stood at the relevant time, nor clause (viii) of subsection (2) of section 56 of the Act make the interest chargeable to tax whether such interest is income of the recipient or not vide para 57 of the said decision. 17. Vide order dated 16-07-2009, two Judges Bench of Hon'ble Supreme Court in the case of Ghansh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 145A by virtue of Finance Act, 2009. We note that the Hon'ble High Court of Gujarat in the case of Movaliya Bhikhubhai Balabhai (supra) held the substitution of section 145A by Finance (No. 2) Act, 2009 was not in connection with the decision of Hon'ble Supreme Court in the case of Ghanshyam (HUF) (supra), but was brought into with a view to mitigate the hardship caused to the assessee on account of the decision of Hon'ble Supreme Court in the case of Smt. Ramabai reported in 181 ITR 400 (SC), taking into account Circular No. 5/2010 dated 03-06- 2010 issued by the CBDT. It is pertinent to note the law laid down by the Hon'ble Supreme Court in the case of Ghanshyam (HUF) (supra) held, interest u/s. 28 is not like interest granted u/s. 34, the interest granted u/s. 28 is an accretion to the value of land and is a part of enhanced compensation. Further, it also held additional amount granted u/s. 23(1A) and solatium u/s. 23(2) of the Land Acquisition Act is also forms part of enhanced compensation. The Hon'ble High Court of Bombay in view of law laid down by the Hon'ble Supreme Court in the case of Ghanshyam (HUF) (supra) which was followed by the Hon'ble High Court of Gujarat in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed decree on 22-04-2008 in L.A.R. No. 2 of 2004, a reference court, granted enhanced amount of Rs.71,84,186/- to the assessee which is evident from the execution petition filed to realize the decree amount which is on record, clearly shows the interest of Rs.6,46,577/- on enhanced compensation amount of Rs. 71,84,186/- u/s. 28 of the Land Acquisition Act @ 9% from 17-06-1992 to 16-06-2000 (for one year). Further, interest of Rs.92,29,639/- u/s. 28 of the Land Acquisition Act @ 15% from 17-06-2002 to 21-02-2009 (for 103 months). Therefore, respectfully following the decision of Hon'ble Jurisdictional High Court of Bombay in the case of Rupesh Rashmikant Shah (supra), we hold the interest received u/s. 28 of the Land Acquisition Act would not fall within the ambit of the expression interest as envisaged u/s. 145A(b) of the Act, further, hold that the amendment by way of substitution of section 145A by Finance (No. 2) Act, 2009 w.e.f. 01-04-2010 and amendment by way of insertion of clause (iii) in section 56(2) by Finance Act, 2009 would have no applicability to the facts of the present case and in view of the same the order of CIT(A) in confirming the order of AO is not justified. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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