TMI Blog1997 (1) TMI 155X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,69,224 3. The assessee, after receipt of the compensation, considered the entire amount, including solatium and interest, as compensatory price and claimed the entire amount as exempt as the total receipt was invested by the assessee in Unit Trust of India. The Assessing Officer accepted the claim of the assessee with respect of compensation and solatium. However, as regards the interest, the Assessing Officer was of the view that the Special Land Acquisition Officer in his order dated 23-9-1986 determined the cost of the land at Rs. 310 per sq. mt. and also awarded interest at 12% on the land from 14-2-1976. The said interest, in the opinion of the Assessing Officer, was awarded on the capital of the assessee and hence, did not form part of the compensation. The interest of Rs. 6,92,073, therefore, was held to be assessable by the Assessing Officer as income from other sources. He accordingly included the said amount as the income of the assessee for the year under consideration. The assessee, however, succeeded before the CIT(A) who held that the interest of Rs. 6,92,073 was part of the compensation and in fact was determined as such by the Special Land Acquisition Officer. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , pointed out that the Statement of Objects and Reasons clearly provide the grant of interest on the acquisition of the land. In the case of the assessee, the interest was granted as per the said Statement of Objects and Reasons and, therefore, did not form part of the compensation. 6. The learned departmental representative has also drawn our attention to the decision of the Supreme Court in the case of Dr. Shamlal Narula v. CIT [1964] 53 ITR 151. In the said decision, he pointed out, it was held that under the scheme of the Land Acquisition Act, 1894, land acquired compulsorily vests absolutely in the Government after the Collector has taken possession of the land, whether before or after making his award determining the compensation. A statutory liability has been imposed upon the Collector to pay interest on the compensation awarded from the time of his taking possession until it is paid or deposited. This amount of interest is not compensation for the land acquired or for depriving the claimant of his right to possession but is paid to the claimant for the use of his money by the State. The statutory interest paid under section 34 of the Land Acquisition Act, 1894 on the amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st on the amount of compensation, it would mean that the assessee was simultaneously holding the ownership of land and was also entitled to receive compensation in respect of the acquired land. This conclusion, in his view, would lead to fallacy and hence, it is incorrect to say that the amount of Rs. 6,92,073 was not connected with the compensation. Since the assessee was the owner of the land till 15-10-1986, the Government cannot be said to have become debtor for the payment of compensation unless the land is vested in the said Government. In such a situation, it would be ironical to say that the owner has received interest on the principal amount of which he was not the owner or creditor during the period for which the so-called interest is calculated. 8. The learned counsel has also drawn our attention to the decision of the Bombay High Court in the case of Union of India v. Smt. Maria Olivia Carvalho, placed at pages 12 to 14 of the paper book. He pointed out that the amended provisions of section 23(1A) were examined by the Bombay High Court and on the similar facts the decision was rendered in favour of the assessee. In fact, the said decision of the Bombay High Court ful ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd as above provided the Court shall in every case award a sum of thirty per centum on such market value, in consideration of the compulsory nature of the acquisition. " In determining the amount of compensation, certain factors are to be taken into account. In addition to the market value of the land, it is also provided that the Court shall in every case award an amount calculated at the rate of 12 per centum per annum on such market value. It is pertinent to note that in sub-section (1A), the Legislature has used the word 'amount' and not the word 'interest'. If an interest is received on the acquisition of land, that interest has to be awarded under the provisions of section 34 of the Act and not under sub-section (1A) of section 23 of the Land Acquisition Act, 1894. The plain reading of section 23, as a whole, goes to show that the said section provides only with the determination of the compensation on the compulsory acquisition of the land. While determining the market value of the land, the Court have to take certain factors into account mentioned in the said section. In addition, the Court also shall award an amount at the rate of 12 per centum per annum and under sub-se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsideration for the acquisition of the land. Under clause (2) of section 23 of the Legislature in express terms states that in addition to the market value of the land the court shall in every case award a sum of 15 per cent of such market value in consideration of the compulsory nature of the acquisition. If interest on the amount of compensation determined under section 23 is considered to be a part of the compensation or given in consideration of the compulsory nature of the acquisition, the Legislature would have provided for it in section 23 itself. But instead, payment of interest is provided for separately under section 34 in Part V of the Act under the heading 'payment'. It is so done, because interest pertains to the domain of payment after the compensation has been ascertained. It is a consideration paid either for the use of the money or for forbearance from demanding it after it has fallen due. Therefore, the Act itself makes a clear distinction between the compensation payable for the land acquired and the interest payable on the compensation awarded. " As already mentioned above, the said decision of the Supreme Court pertains to the period when the provisions of su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se in market value what is required to be paid is differential compensation for removing hardship caused by fixing market value on the prior date of notification. Therefore, the word 'amount' appears to have been used deliberately to indicate the payment of compensation and not the word 'interest' as mentioned in the Objects. Probably, the Legislature was aware that it would be against common-sense to provide for interest for a period during which the concerned person was not the owner of the market value as per sub-section (1) which can be taken as principal for computation of interest. 12. In our view, the provisions of sub-section (1A) of section 23 are very clear and there is no ambiguity, in the said provisions. It is well-settled that in a taxing Act one has to look merely at what is clearly stated. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. There is nothing to be read in, nothing to be implied. One can only look fairly at the language used. In other words, no words need be read into or subtracted from the language used by the Legislature. In other words, an assessee is not to be taxed unless the charging provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the possession was handed over on 15-10-1986. It can thus be seen that the amount of Rs. 6,92,073 is not the interest granted under section 34 in respect of delayed payment of compensation. This amount is neither received under section 28 nor under section 34 of the Land Acquisition Act. Thus, this is not the amount of interest received on the amount of compensation but it forms part of the amount of compensation as such. 14. This issue was also examined by the Bombay High Court in the case of Smt. Maria Olivia Carvalho. The jurisdictional High Court in para 9 of the order have laid down : " We already said that sub-section (1A) of the amended section 23 of the Principal Act provides that the Court shall in every case award an amount calculated at the rate of twelve per centum per annum on such market value for the period commencing on and from the date of publication of the notification under section 4(1) in respect of such land to the date of the Award of the Collector or the date of taking possession of the land, whichever is earlier. The learned District Judge has calculated the market value of the acquired land belonging to the respondents at the rate of Rs. 5 per sq. m ..... X X X X Extracts X X X X X X X X Extracts X X X X
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