TMI Blog2002 (9) TMI 292X X X X Extracts X X X X X X X X Extracts X X X X ..... no order passed by it to deduct the tax deducted at source and when there was no such order, no deduction towards tax deducted at source could have been made. The State Commission, therefore, directed that the amount which had been deducted by the GDA towards the tax deducted at source be refunded to the complainant with interest at the rate of 18 per cent. per annum. This order of the State Commission has been challenged by the GDA on the ground that it was a statutory duty imposed on it under section 194A of the Income-tax Act, 1961, to deduct the tax and when it has deposited the tax to the account of the Central Government and has also given a certificate for the tax so deducted to the complainant, it could not be said that there was any deficiency in service on its part or it had contravened the order of the State Commission passed in the complaint filed by the respondent/complainant. Basing reliance on the case of Rama Bai v. CIT [1990] 181 ITR 400 (SC); [1990] SCC 699, "Where interest was paid on an enhanced compensation and tax was deducted at source", it was contended that it was rightful on the part of the GDA to deduct the tax. In the present case, it may, however, be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... double lifts in each block -telephone line in every flat -marble flooring in bathroom/kitchen and kota stone in all public areas -geyser connection in all bathroom/kitchen -independent water supply system -24 hours electricity supply -multi-channel antenna with two close circuit TV channels -provision for centralised air-conditioning in four room apartments -space for car parking and, star infrastructural facilities, as -badminton court -medical aid -swimming pool -club -health club -community centre -primary school -security arrangements -indoor games and children play area in each block. Admittedly, the star infrastructural facilities were not available when the possession of the flat was offered to Dr. Gupta and also most of other facilities. The State Commission held that the representation by the public authority like the GDA to the intending purchasers that a scheme under which they were to purchase the flats contained a provision for certain specific facilities which were not provided and this failure squarely amounted to deficiency in service on its part. The State Commission held that the intending purchasers were fully justified in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any other mode, whichever is earlier, deduct income-tax thereon at the rates in force." Reference was also made to a decision of the Supreme Court in the case of Rama Bai v. CIT [1990] 181 ITR 400 (SC); [1990] SCC 699, wherein the question before the Supreme Court was regarding the point of time at which the interest payable under sections 28 and 34 of The Land Acquisition Act, 1894, accrues or arises, where such interest is payable on enhanced compensation awarded on a reference under section 18 of that Act or further appeal to the High Court and/or Supreme Court. It is not dear to us as to how this judgment has any relevance to the issue before us. Perhaps, the argument is sought to be built is that where interest is paid under the aforesaid provisions of the Land Acquisition Act, 1894, tax deducted at source has to be deducted under section 194A of the Income-tax Act. We do not think there can be any dispute on this. Further, in sections 28 and 34 of the Land Acquisition Act the word "interest" is specified. We may quote one of the sections. Section 34 which reads as under: "When the amount of such compensation is not paid or deposited on or before taking possession of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he amount is paid or deposited. This amount is not, therefore, compensation for the land acquired or for depriving the claimant of his right to possession, but is that paid to the claimant for the use of his money by the State. In this view there cannot be any difference in the legal position between a case where possession has been taken before and that where possession has been taken after the award, for in either case the title vests in the Government only after the possession has been taken. The Legislature expressly used the word 'interest' with its well known connotation under section 34 of the Act. It is, therefore, reasonable to give that expression the natural meaning it bears. There is an illuminating exposition of the expression 'interest' by the House of Lords in Westminister Bank Ltd. v. Riches [1947] 28 TC 159, 189 (HL). The question there was whether, where in an action for recovery of any debt or damages the court exercises its discretionary power under a statute and orders that there shall be included in the sum for which the judgment is given interest on the debt or damages, the sum of interest so included is taxable under the Income Tax Acts. If the said amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pensation for the owner's right to retain possession, for he has no right to retain possession after possession was taken under section 16 or section 17 of the Act. We, therefore, hold that the statutory interest paid under section 34 of the Act is interest paid for the delayed payment of the compensation amount and, therefore, is a revenue receipt liable to tax under the Income-tax Act." Interest has been defined in clause (28A) and interest on securities under clause (28B) of section 2 of the Income-tax Act. These two clauses are reproduced as under: "2(28A) 'interest' means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised; 2(28B) 'interest on securities' means, (i) interest on any security of the Central Government or a State Government; (ii) interest on debentures or other securities for money issued by or on behalf of a local authority or a company or a corporation established by a Central, State or Provincial A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ting to note that the DDA filed a writ petition in the Delhi High Court arising out of the aforesaid judgment of the Appellate Tribunal wherein it demanded interest with reference to sections 244(1A) and 244A of the Income-tax Act. This was on account of the Revenue authorities not refunding the amounts in terms of the order of the Appellate Tribunal. The Division Bench of the Delhi High Court in (Delhi Development Authority v. ITO [1998] 230 ITR 9) consisting of Mr. Justice R.C. Lahoti (as his Lordship then was) and the Mr. Justice J.K. Mehra, held in favour of the DDA that sections 244 and 244A are applicable and directed refund of the amount with interest in view of the order of the Appellate Tribunal. The word "interest" used in the order of the State Commission is not what interest is as defined in section 2(28A). There in the order of the State Commission interest means compensation or damages for delay in construction of the house or handing over possession of the same causing consequential loss to the complainant by way of escalation in the price of the property and also on account of distress, disappointment faced by him. Interest in the order has been used merely as a c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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