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TMI Blog2023 (8) TMI 1517X X X X Extracts X X X X X X X X Extracts X X X X ..... at his regular return was pending for assessment and no section 143(2) notice stood issued during the course of reassessment in question framed by the AO on 15.12.2016. These twin arguments/grounds deserve to be rejected only once it has come on record that the assessee s original return dated 10.02.2014 stood processed on 05.03.2015 followed by the AO s section 148 notice 25.05.2015. And that had also not filed any return in response to section 148 which could trigger section 143(2) show cause at the AO s behest. Accordingly reject assessee s all the forgoing arguments in light of hon'ble high court s jurisdictional bench s judgment which is squarely applicable herein once the AO had framed his re-assessment at Latur. Decided against assessee. - SHRI S.S. GODARA, JUDICIAL MEMBER For the Appellant : Shri P P Kulkarni AR For the Respondent : Shri B.S.Rajpurohit - DR ORDER Per S.S.Godara, JM: This assessee s appeal for Assessment Year 2013-14 arisen directed against the National Faceless Appeal Centre(NFAC), Delhi s DIN Order No. ITBA/NFAC/S/250/2023-14/1053863085(1) dated 22.06.2023, in proceedings under section 250 of the Income Tax Act, 1961 [in short the Act ]. Heard both t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is appeal though for the first time be accepted and justice be done as per law. 7. On the facts and in the circumstances of the case and in law the levy of interest u/s 234A, 234B and 234C is not justified. 8. The appellant craves to leave, add/amend or alter any of the above grounds of appeal. 3. The assessee s sole substantive grievance raised in the instant appeal challenges correctness of both the learned lower authorities action assessing his interest income received under section 28 r.w.s 33 of the Land Acquisition Act, 1894; as the case may be; amounting to Rs.19,40,795/-, under section 56(2)(viii) r.w.s 145A(b) of the Act. Learned counsel vehemently argued first of all that such an interest income carries exemption from assessment under section 96 of the Right to Fair Compensations and Transparency in Land Acquisition, Rehabilitation and Resettlement (RFCTLAAR) Act, 2013 as well as in light of the CBDT landmark circular no.36 of 2016 dated 25.10.2016 clarifying the position in very terms. 4. I find no merit in assessee s instant vehement arguments since the assessment year herein A.Y.2013-14 and the assessee s land stand acquired much earlier and he had received his enhance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereby 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 Tribunal in which it has been held that interest u/s. 28 under The Land Acquisition Act, is to be taxed as part of consideration on receipt basis. This judgment was delivered on 16-07-2009. The Finance (No.2) Act, 2009 w.e.f. 01-04-2010 inserted clause (viii) to section 56(2) providing that: income by way of interest received on compensation or on enhanced compensation referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 worked out. Section 28 puts similar obligation upon the Court when the Court finds that the compensation awarded under section 11 was inadequate. Therefore, there is no change in nature of interest either u/s. 28 or section 34. Even if court hikes compensation for land and interest is awarded under Section 28 of the Act, upon such increased compensation, in the light of larger Bench judgment, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 directed the Income-tax Department to refund the amount to the collector and held: that the Collector will determine whether the compensation paid is for property other than the agricultural land or otherwise and whether deduction of tax at source was permissible under other provisions of law .. . Aggrieved thereby, the Revenue approached the Hon ble Supreme Court pleading that the matter should have been rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, 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 would prevail in the given facts and circumstances as the assessee, his land/capital asset forming subject matter of compulsory acquisition as well as situs of the Assessing Officer who has framed assessment before us dated 28.11.2017, are covered within its territorial jurisdiction notified from time to time. We thus quote PCIT Vs. ABC Paper Limited [2022] 447 ITR 1 (SC) and decide the instant sole substantive ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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