TMI Blog2014 (6) TMI 288X X X X Extracts X X X X X X X X Extracts X X X X ..... e claim was not made before the authorities, but arising from the material available before the AO, requires fresh adjudication by the AO – thus, the claim of the assessee is remitted back to the AO for fresh adjudication – Decided in favour of Assessee. - I.T.A. No.62/Ahd/2011 - - - Dated:- 23-5-2014 - Shri N. S. Saini And Shri Kul Bharat,JJ. For the Appellant : Ms. Urvashi Shodhan, AR For the Respondent : Shri Nimesh Yadav, Sr.DR ORDER Per Shri Kul Bharat, Judicial Member : This appeal by the Assessee is directed against the order of the Ld.Commissioner of Income Tax(Appeals)-XVI, Ahmedabad ( CIT(A) for short) dated 22/10/2010 pertaining to Assessment Year (AY) 2007- 08. The Assessee has raised the following grounds of appeal:- 1. The appellant submits that that in view of the decision of the Hon ble Supreme Court in CIT V/s Ghanshyam HUF (315 ITR 1) the interest awarded ought to have been held to be not taxable at all being merely integral part of compensation to the compulsory acquisition of land. 2. The Ld.CIT(A) has erred in law and on facts in confirming the addition of ₹ 22,93,378 on account of interest awarded on enhanced compens ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the compulsory acquisition of the land. The ld.counsel for the assessee submitted that the land being agricultural land, therefore such amount is not taxable. 4. On the contrary, the ld.Sr.DR supported the orders of the authorities below. 5. We have heard the rival submissions, perused the material available on record and gone through the orders of the authorities below. During the course of hearing, a query was raised to the ld.counsel for the assessee that before the AO as well as the ld.CIT(A) the assessee had not denied the taxability of the interest and not claimed the amount as exempt u/s.10(37) of the Act. On the contrary, the prayer of the assessee was for taxing the amount on accrual basis and spread over of interest. In response to this query, the assessee has submitted a written note, which is reproduced hereinbelow:- Brief Note Original return of income was filed on 16/08/2007 declaring total income of ₹ 39,700/-. Revised return of income was filed on 31/03/2008 showing total income of ₹ 59, 934/-. The appellant claimed exemption of ₹ 14,57,444/- (principal amount) received as additional compensation on compulsory acquisition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant specifically claimed that interest awarded being integral part of compensation received ought to be held as not taxable in judgment of CIT vs Ghanshyam HUF(315 ITR 1). It is further submitted that even if it is held that challenge to the taxability of interest is a 'new ground' raised for the first time before the Hon'ble ITAT it is submitted that the same is a pure question of law which can be decided by the Hon'ble Tribunal on the basis of facts on record. The same view is taken by the Hon'ble Gujarat High Court recently in Tax appeal No. 2562 of 2009 and others vide order dated 02/04/2014 (Copy enclosed: please see page no. 30 31 in Para 40 41 reproduced below) 40. Therefore, any ground, legal contention or even a claim would be permissible to be raised for the first time before the appellate authority or the Tribunal when facts necessary to examine, such ground, contention or claim are already on record. In such a case the situation would be akin to allowing a pure question of law to be raised at any stage of the proceedings. This is precisely what has happened in the present case. The Appellate Commissioner and the Tribunal did not need ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT on page 23 Para 50 holding(Copy enclosed)- 50. In the instant case, we find that assessment was not quashed by the Ld. CIT (A) and further the decision on merits of the issue of Ld. CIT (A) wherever the Department has any grievance was agitated in appeal and the same have been decided on merits. We are of the considered view that the income of the assessee is to be computed as per provisions of the law and simply because an assessee has suffered more amount on tax than what is legally due, then the Department can not assess the income at a higher figure but should assess the income at correct amount as per the provisions of law. We, therefore, do not find arty merit in this ground of appeal of the Revenue and hence, the same is dismissed. It is respectfully submitted that interest received on enhanced compensation being integral part of the compensation is not exigible lo tax since compensation itself is exempt from Long Term Capital Gains u/s 10(37) of the Act. It be so held now. 5.1. The ld.counsel for the assessee placed reliance on the judgement of the Hon ble Jurisdictional High Court rendered in the case of Commissioner of Income Tax s. Mitesh Impex in Tax App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rate of 12 per cent per annum. Similarly, under section 23(2) of the 1894 Act, there is a provision for solatium which also represents part of enhanced compensation. Similarly, section 28 empowers the Court in its discretion to award interest on the excess amount of compensation over and above what is awarded by the Collector. It includes additional amount under section 23(1A) and solatium under section 23(2) of the said Act. Section 28 of the 1894 Act applies only in respect of the excess amount determined by the Court after reference under section 18 of the 1894 Act. It depends upon the claim, unlike interest under section 34 which depends o undue delay in making the award. It is true that interest is not compensation. It is equally true that section 45(5) of the 1961 Act, refers to compensation. But as discussed hereinabove, we have to go by the provisions of the 1894 Act, which awards interest both as an accretion in the value of the lands acquired and interest for undue delay. Interest under section 28 unlike interest under section 34 is an accretion to the value, hence it is a part of enhanced compensation or consideration which is not the case with interest under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also entitled to get 9% interest for the first year and thereafter at the rate of 15% for the second year upto depositing of the awarded amount. The ld.Court has also ordered for 12% increase from the date of publication of the notification u/s.4 i.e. 13.08.1992 to the date of award i.e. 10.04.1995 passed by the Land Acquisition Officer as provided U/s.23(1)(A) of the Act. As per the contention of the ld.counsel for the assessee, all these amounts form part of the compensation in the view of the judgement of Hon ble Supreme Court in the case of CIT vs. Ghanshyam (HUF)[supra]. It is also submitted that since the case is transfer of agricultural land, therefore, this amount is exempt u/s.10(37) of the Act and for the sake of clarity section 10(37) is reproduced hereunder:- Section 10(37):- in the case of an assessee, being an individual or a Hindu undivided family, any income chargeable under the head Capital gains arising from the transfer of agricultural land, where- (i) such land is situate in any area referred to in item (a) or item (b) of subclause (iii) of clause (14) of section 2; (ii) such land, during the period of two years immediately preceding the date of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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