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2020 (1) TMI 1575 - AT - Income TaxAssessability of interest received on compensation/enhanced compensation awarded under the Land Acquisition Act - Interest received on compensation by the assessee was under section 28 of the Land Acquisition Act, which is to be considered as part of compensation and not interest for late payments - Case of the Revenue is that the interest received by the assessee on compensation/enhanced compensation is assessable under section 56 of the Act, subject to the deduction allowable under section 57(iv) - HELD THAT:- The Hon’ble Supreme Court in its earlier decision in Ghanshyam (HUF)[2009 (7) TMI 12 - SUPREME COURT] had held that the interest received under section 28 of the Land Acquisition Act is part of compensation and the interest received under section 34 of the Land Acquisition Act is to be assessed as other interest in the hands of the recipients. The assessee before us has placed the evidence to the effect that the interest has been received under section 28 of the Land Acquisition Act. The Hon’ble Supreme Court had laid down that the ratio in Ghanshyam (HUF) case is to be applied in order to ascertain whether the interest received by the assessee under the said provision amounts to compensation or not. In view thereof, we direct the Assessing Officer to verify the claim of the assessee that interest had been received under section 28 of the Land Acquisition Act and if that be so, then the same has to be treated as compensation in the hands of the assessee and is not taxable as interest under section 56 of the Act. Accordingly, ground of appeal raised by the assessee is decided in favour of the assessee.
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