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2018 (10) TMI 865 - AT - Income TaxCapital Gain on compulsory acquisition of urban Agricultural Land - Whether interest awarded u/s.28 of the Act of 1894 is akin to compensation and chargeable to tax u/s.45(5) of the Act or under the head “Income from other sources” u/s.57(iv) read with Sec.56(2)(viii) and 145A(b)? - 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). Referring on decision of Hon’ble Supreme Court in the case of CIT v. Ghanshyam (HUF)[2009 (7) TMI 12 - SUPREME COURT], wherein it was held that interest under section 28 of the Act of 1894 is part of the amount of compensation whereas interest u/s 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. Allowing exemption u/s. 10(37) on the interest received by the assessee u/s. 28 of the Land Acquisition Act, 1894. We find no grounds to interfere with the impugned orders of the CIT(Appeals). Appeal of the revenue is dismissed.
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