TMI Blog2017 (11) TMI 65X X X X Extracts X X X X X X X X Extracts X X X X ..... e bifurcated and divided amongst several recipients and the details of such recipients was not available with the AO when he recorded the said reasons. We have considered the contention raised by the Petitioner that the interest element would partake the character of enhanced compensation and is not taxable, on the basis of the ratio in the case of Ghanshyam (HUF)[2009 (7) TMI 12 - SUPREME COURT ] but we are not giving any opinion on the same at this stage. These aspects, we believe, are matters which the AO will have to examine in detail during the course of reassessment proceedings. We would not like to comment on the issues which the AO will have to determine and decide in the course of reassessment proceedings. AO should have been more careful while disposing of the objections/representation made by the Petitioner. - W.P.(C) 8035/2016 - - - Dated:- 27-10-2017 - MR. SANJIV KHANNA MS. PRATHIBAM. SINGH JJ. Petitioner Through: Mr. Balbir Singh, Senior Advocate with Mr. Aneesh Mittal, Advocates. Mr. Arvind Kumar, Advocates. Respondents Through: Mr. Ashok K. Manchanda, Senior Standing Counsel Mr. Anand Chaudhuri, Advocate. SANJIV KHANNA, J. (Oral) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,962/-. However the return was processed u/s 143(1) of the Income Tax Act, 1961 at ₹ 5,52,310/-, on 17.01.2013 by allowing TDS of ₹ 45,796/-. The case was selected for scrutiny under CASS to examine the reasons and genuineness for high claimed of refund out of TDS. However, the Assessing Officer while completing the assessment on 14.02.2014 omitted to considered the taxability of TDS received of ₹ 80,02,471 which was interest on enhanced compensation which has to be taxed in the said assessment year u/s 56(2) (viii) of Income Tax Act, 1961. The Assessing Officer assessed at total income of ₹ 6,28,376/- by making an addition of ₹ 10800/- and ₹ 65266/- on account of difference in gross receipts as per Form 16 issued from Ministry of Labour and Employment and on account of undisclosed bank interest income respectively. On perusal of TDS certificate showing credits amount of ₹ 7,46,90,061 issued on 10.06.2010 by Land Acquisition Office, Panchkula Haryana on enhanced compensation on account of land acquisition in the name of four persons including the assessee jointly, it is revealed that said amounts includes interest on enhanced compens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid and was to be shared between the Legal Representatives / successors-in- interest of the owner of the land. 10. The learned counsel for the Petitioner has also objected to the reasoning given by the AO in the order dated 8th August, 2016 which merely records that on merits the interest component received as enhanced compensation was taxable as per Section 56 (ix) [sic (viii)] read with Clause (b) to Section 145A of the Act. 11. Counsel for the Respondent has submitted that in the present case the AO while passing the original assessment order was not aware and did not have knowledge that enhanced compensation had included an element of interest as also the nature and character of the interest. In these circumstances, there is no question of change of opinion as the question of taxability of the interest element was not considered, examined and opined by the Assessing Officer. It is further stated that the question of taxability of interest would be examined on merits in the reassessment proceedings. Regarding the question of amounts mentioned in the reasons to believe it is submitted that the AO had to proceed on the basis of the documents and papers available on reco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned the TDS certificate placed on record. Under the heading Nature of payment , the word Enhanced Compensation is recorded. The TDS certificate was issued in the name of several persons including the Petitioner. Under the heading Amounts paid/credit , in the subsequent column three amounts are indicated as below: PR (i.e. Principal) - ₹ 4,26,79,407/- INT (i.e. Interest) - ₹ 3,20,09,554/- and Costs - ₹ 1,100/- The TDS certificate shows that tax was deducted at the flat rate of 20%. 17. It is apparent and obvious to us that the AO in the original assessment proceedings did not examine the question of taxability of interest as this aspect appears to have completely escaped his attention. It is not even the case of the Petitioner that the AO had examined the said question in the original assessment proceedings. 18. On the question of figures given in the reasons to believe, we would record that the AO had to proceed on the basis of documents available on record. It is not the case of the Assessee that he had not received interest amount as indicated in the reasons to believe. The figure or quantum is disputed. Even if we are inclined to acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to examine in detail during the course of reassessment proceedings. We would not like to comment on the issues which the AO will have to determine and decide in the course of reassessment proceedings. 23. We would, however, like to observe that the AO should have been more careful while disposing of the objections/representation made by the Petitioner vide order dated 8th August, 2016. Though the Petitioner had raised similar objections at that time and also cited the judgement of the Supreme Court, the same have not been considered in depth and detail. It would have been more appropriate for the AO to clarify that the said submissions and contentions would be examined in depth and on merits during the course of reassessment proceedings. The assessment order should deal and answer the said contentions including the question of nature of interest and the section under which it was paid, and the effect and impact of the decisions relied upon by the petitioner. These issues would be considered and determined in the re-assessment proceedings. We have not made any observations on merits. We also clarify that in case the Petitioner is aggrieved by the final assessment order, he woul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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