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2011 (12) TMI 382 - AT - Income TaxLTCG or other sources - Taxability of interest income - what the same is part of full value of consideration in computing long term capital gains or taxable as income from other sources - Buy back of share - held that:- Supreme Court in the case of CIT v. Ghanshyam (HUF) (2009 -TMI - 34152 - SUPREME COURT) - has given a detailed finding on the issue of interest payable u/s 23, 28 as well as section 34 of the Land Acquisition Act. The Hon'ble Supreme Court has analysed the issue whether the interest paid on enhanced compensation u/s 23,28 and interest u/s 34 would be treated as part of compensation u/s 45(5) of the I T Act 1961. Thus, when the amount is paid as a compensation for enhancement in the value of the asset transferred, the same will be part of full consideration; but when the interest is paid as compensation to loss of interest, then it cannot be treated part of sale consideration. Accordingly, the interest received by the assessee, as held by the Hon'ble Supreme Court while deciding the dispute of rate of interest is only a compensation for loss of interest due to delay in public offer and payments and not the compensation for enhancement in the value of the asset. The interest received by the assessee as per the directions of the SEBI and in pursuance of the decision of the Hon'ble Supreme Court (supra) cannot be treated as part of sale consideration of shares and accordingly, the lower authorities have rightly treated the income from other sources.
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