Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2018 (6) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2018 (6) TMI 1529 - AT - Income TaxTaxability of a sum received as interest on enhanced compensation - assessee claimed that interest received is nothing but compensation and therefore even for the interest portion received, exemption u/s. 10(37) is applicable - as per AO Interest on enhanced compensation was chargeable to tax under the provisions of section 57(iv) r.w.s. 56(2)(viii) r.w.s. 145A(b) - Held that:- It is not disputed by the AO that the land acquired was agricultural land and the conditions laid down u/s. 10(37)(i) to (iv) are applicable to the land which is in question which was compulsorily acquired. It is also not in dispute that the interest in question was interest awarded u/s. 28 of the Land Acquisition Act, 1894. In the given circumstances, we are of the view that the decision of the Hon’ble Gujarat High Court in the case of Movaliya Bhikhubhai Balabhai (2016 (5) TMI 488 - GUJARAT HIGH COURT) will be applicable to the facts of the present case wherein as held that interest under section 28 of the Act of 1894 is an accretion to compensation and forms part of the compensation and, therefore, exigible to tax under section 45(5) of the Act. Interest under section 28 of the Act of 1894 is part of the amount of compensation whereas interest under section 34 thereof is only for delay in making payment after the compensation amount is determined. Interest under section 28 is a part of the enhanced value of the land which is not the case in the matter of payment of interest under section 34 CIT(Appeals) is fully justified in allowing exemption u/s. 10(37) of the Act on the interest received by the assessee u/s. 28 of the Land Acquisition Act, 1894 - decided in favour of assessee
|