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2013 (12) TMI 1527 - HC - Income TaxDeduction of tax at source on the payment of interest on compensation awarded - Held that:- No tax is to be deducted at source from compensation awarded in lieu of acquisition of agricultural land. In respect of `interest' it has to be seen whether interest is a part of compensation. If answer is in affirmative then tax cannot be deducted at source. If, however, it is for delay in making payment it does not form part of compensation and tax may be deducted at source. In view of specific finding of Hon'ble Supreme Court in Ghanshyam's case (2009 (7) TMI 12 - SUPREME COURT ) amount awarded under Section 28 of the Land Acquisition Act is accretion in value of land and interest thereon forms part of compensation; income tax cannot be deducted at source when land acquired is agricultural land. Admittedly, in the instant case the land was agricultural land and enhanced compensation and interest was awarded under Section 28 of the Act.
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