TMI Blog2013 (12) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... when there is no real income - The interest will have to be charged in the year when income was earned - It cannot be charged retrospectively when there was no receipt in the hands of assessee - Decided in favour of assessee. - Income Tax Appeal No. - 376 of 2008, Income Tax Appeal No. - 559 of 2011, Income Tax Appeal No. - 560 of 2011, Income Tax Appeal No. - 561 of 2011, Income Tax Appeal No. - 562 of 2011, Income Tax Appeal No. - 563 of 2011 - - - Dated:- 13-12-2013 - Hon'ble Dr. Satish Chandra And Hon'ble B. Amit Sthalekar,JJ. For the Appellant : Rakesh Ranjan Agrwawal,B. K. Srivastava,R. R. Kapoor, Vineet Pandey For the Respondent : C.S.C.,A.N. Mahajan, B. Agrawal, D. Awasthi ORDER The present appeals have been fil ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Acquisition Act, which comprised of three components, namely: A. Compensation u/s 23 (1), B. Additional amount of Compensation u/s 23 (1A); and C. Solatium u/s 23 (2). Apart from compensation, the assessee has also received interest on additional compensation and solatium. The assessee has declared the amount of compensation and solatium under VDIS, 1997, but interest on additional compensation received under Section 23 (1A) was not declared by the assessee for the purpose of tax. The Punjab and Haryana High Court vide its judgment dated 17.8.2000 in the case of Union of India Vs. Birbal Ors, Civil Revision No. 1598 of 1999 has held that interest would also be payable on additional amount determined under Section 23 (1A) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 34B provides for levy of the interest for default in payment of tax on the appointed dates of payment. The tax is payable on different dates and through different modes. The specific date of payment of tax are adhered but it cannot be said that the Government is deprived of tax on those dates. Interest is chargeable under Section 234A, 234B, 234C, in order to compensate the working for such deprivation. In the instant case, the payment was received after the judgment of the Hon'ble Supreme Court, which upheld the award pertaining to the interest vide its order dated 19th September, 2001, so it is taxable in the year of the receipt and not in the year when the land was acquired. For the purpose, he relied on the ratio laid down in the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er or reduction even by Settlement Commissioner cannot be conferred to. (2) CIT Vs. Sant Ram Mangat Ram Jewellers and Others reported in 264 ITR 564 (SC) wherein it has been held that "even the settlement commission has no power to waive mandatory interest as contemplated under Section 234A, 234B and 234C of the Income Tax Act. (3) CIT Vs. Hindustan Bulk Carriers-259 ITR 449 (SC)-wherein it has been held that interest u/s 234A, 234B and 234C are mandatory in nature and cannot be waived or reduced even by the settlement commission. We have heard both the parties at length and gone through the material available on record. It may be mentioned that in the case of Commissioner of Income Tax Vs. Ghanshyam (HUF) [2009] 315 ITR 1 (SC), it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or or the court, under reference, has not compensated the owner for the full value of the property as on the date of the notification. Interest is different from compensation. Interest paid on the excess amount under section 28 of the land Acquisition Act, 1894, depends upon a claim made by the person whose land is acquired, whereas interest under Section 34 is for delay in making payment; it postulates award of interest at 9 per cent. Per annum from the date of taking possession only until it is paid or deposited. Interest under Section 28 would include within its ambit both the market valuation and the solatium and is part of the amount of compensation whereas interest under section 34 is only for delay in making payment after the compe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law is applicable retrospectively unless specified in the statute. Interest is compensatory in nature as per the ratio laid down in the case of CIT Vs. Pranoy Roy, 309 ITR 231 Sc. Interest on advance tax is also compensatory in nature as per the ratio laid down in the case of CIT Vs. Insilco Ltd. (2010) 321 ITR 105 Delhi. In view of the above we set aside all the impugned orders passed by the lower authorities including the Tribunal and directed the A.O. to charge the interest under Section 234A, 234B, 234C of the Act, as per the law in the assessment year when the interest earned on the additional compensation was actually received. Hence, the answer to the substantial questions of law is in favour of the assessee and against the Dep ..... X X X X Extracts X X X X X X X X Extracts X X X X
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