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2021 (6) TMI 145 - HC - Income TaxInterest income on amount received on compulsory acquisition of land for constructing a house - compensation received by the land acquisition officer - main contention of the petitioner is that the accrued interest received by him has to be spread over from the date of acquisition and the petitioner's request was not considered - petitioner herein had used the amount received on compulsory acquisition of land for constructing a house and the said claim was supported by a valuation report and held that the Assessing Authority has to give necessary relief to the petitioner on that score - primary contention urged the petitioner is that the interest portion received by the petitioner following his land acquisition should be spread over from the year of acquisition till the year of payment HELD THAT:- We have to necessarily sustain the contention of the petitioner's counsel that even though a sum of ₹ 45,00,000/- was received as interest in the year 2006 for the assessment year 2007-2008, still it cannot be taxed as a single receipt and that the said amount should be spread over from the year of acquisition. We called upon the counsel on either side to file a memo of calculation to demonstrate if by such spreading over, whether the petitioner would be liable to pay any tax at all. The learned Standing Counsel appearing for the respondents filed a statement, which prima facie indicates that the petitioner would definitely have to pay a substantial sum by way of tax. If only the petitioner is able to demonstrate that the petitioner's tax dues will be zero, if the interest amount is spread over from the year of acquisition till the date of payment, this Court can consider granting relief to the petitioner.The petitioner's counsel would contend that it is for the respondent to issue notice of assessment. I cannot countenance such a contention. We would be justified in ordering refund, only if the petitioner can demonstrate that he is not at all liable to pay any sum towards tax for the amount of compensation received by him. As already admitted by the petitioner's counsel, the petitioner received a sum of ₹ 58,00,000/- out of the said amount, ₹ 45,00,000/- alone represented the interest portion. The Standing Counsel has demonstrated that spreading over the interest portion over several years would still attract liability more than what was deducted at source. Since, the petitioner had not demonstrated that the petitioner is not liable to pay any tax, I am not inclined to interfere with the impugned order. The Writ Petition is dismissed.
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