9911796707
TMI Blog2013 (12) TMI 728X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 22.8.2008 passed by the Income Tax Appellate Tribunal, Delhi in I.T.A. No.810-815/Del/07 for the assessment years 1989-90 to 1994-95. On 12.5.2009, a Coordinate Bench has admitted the appeals on the following substantial questions of law: "A. Whether on the facts and circumstances of the case, the Income Tax Appellate Tribunal was confirmed to confirm the imposition of interest, specially when the assessee has not committed any default under the Income Tax Act so as to attract the provisions of Section 234A, 234B and 234C of the Income Tax Act and still the interest would be chargeable under these provisions because charging of interest under Sections 234A, 234B and 234C of the Act is mandatory ? .... E. Whether the Income Tax Appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Sundar Vs. Union of India dated 19th September, 2001. Resultantly, the assessee has received the interest on the amount of additional compensation, which was spread over during the assessment year under consideration. On 20th November, 2003 the A.O. has issued a notice under Section 148 of the Act. Being aggrieved, the assessee filed a writ petition before Hon'ble Allahabad High Court, which was dismissed vide order dated 31st August, 2004. On 11th October, 2004 the assessee filed returns of income declaring an income of Rs. 6,53,760/- being taxable income in each of the six years the tax was paid under Section 140A of the I.T. Act, 1961. Now, the only dispute remains regarding the chargeability of the interest under Section 234A, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9) 316 I.T.R.-141 (Delhi); Emami Limited Vs. Commissioner of Income Tax (2011) 337 I.T.R.-470 (Cal); Star India P.Ltd. Vs. Commissioner of Central Excise (2006) 280 I.T.R.-321 (S.C.); Commissioner of Income Tax Vs. Shatrusaliaya Digvijaysing Jadeja (2005) 277 I.T.R.-435 (S.C.);and Shanti Sarup Sharma Vs. Commissioner of Income Tax and another (1999) 237 I.T.R.-376 (P&H). Lastly, he prays to set aside the impugned order. On the other hand, Sri Dhananjay Awasthi, learned Standing Counsel for the Department has justified the impugned order and submits that charging of the interest is mandatory. He further submits that ITAT has given a finding in para 36 that the assessee had to pay advance tax in the financial year in which the amount w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61, is this. Section 45 (5) was inserted with effect from April 1, 1988, as an overriding provision. Since compensation under the land Acquisition Act, 1894, arises and is payable in multiple stages, the Legislature stepped in and said that as and when the assessee-claimant is in receipt of enhanced compensation it shall be treated as "deemed income" and taxed on receipt basis. Hence, the year in which enhanced compensation is received is the year of taxability. Consequently, even in cases where pending appeal, the court/tribunal/authority before which the appeal is pending, permits the claimant to withdraw against security or otherwise the enhanced compensation (which is in dispute), the same is liable to be taxed under Section 45 (5) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land which is not the case in the matter of payment of interest under section 34." No doubt the charging of the interest is mandatory. In the case of assessee, the accessibility of the income has not been disputed. Thus, the assessee is liable to pay the advance tax and on delay/failure, interest is chargeable. In the instant case, the assessee has received compensation and interest thereupon only after the judgment of the Hon'ble Supreme Court in the year 2001. Only due to judicial pronouncement, the assessee has become entitled to receive the additional compensation and interest thereupon. The interest can be charged only on the income. No interest can be charged on notional interest. In the Case of CIT Vs. ICD, Syndicate, 285 ITR 310 K ..... X X X X Extracts X X X X X X X X Extracts X X X X
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