TMI Blog2013 (12) TMI 1527X X X X Extracts X X X X X X X X Extracts X X X X ..... - Dated:- 21-12-2013 - MR. JUSTICE PARAMJEET SINGH Mr. Ajay Kumar Kansal, Advocate, for the petitioner JUDGEMENT Paramjeet Singh, J. All the above mentioned three revision petitions i.e. CR Nos. 7953, of 2013, 7964 and 7970 of 2013 have been listed together for hearing. All the above mentioned revision petitions are being disposed of by a common judgment as the common questions of law and facts are involved in these petitions. All the aforementioned three revision petitions are directed against the orders dated 16.11.2013 passed by learned Additional District Judge, Hisar whereby direction has been issued to the petitioner to deposit entire compensation including the Tax Deducted at Source (for short `TDS') in the Court or in the account of decree-holders on or before 04.12.2013. For facility of reference, facts are being taken from C.R. No. 7953 of 2013. I have heard learned counsel for the petitioner and perused the record. Respondents are owners of agricultural land which has been acquired under Section 28 of the Land Acquisition Act,1894 (hereinafter referred to as the Act ). Compensation has been assessed as per the provisions of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltural land as per Section 194 LA of the Income Tax Act. The provisions of Income Tax Act are, thus, clear regarding imposition of tax liability on amount of compensation received in lieu of acquisition of land. It is in this background that I have to determine whether tax is liable to be deducted at source from amount awarded under various provisions of Land Acquisition Act viz Sections 23, 23(1-A), 28 and 34. The issue of taxability of compensation awarded under these provisions of Land Acquisition Act arose before Hon'ble Supreme Court in Commissioner of Income Tax, Faridabad vs. Ghanshyam (2009) 8 SCC 412 however, in a different context. In that case, Hon'ble Supreme Court has decided the question whether the amount of compensation and interest under Land Acquisition Act is taxable in year of receipt. While dealing with this issue, Hon'ble Supreme Court considered the nature of amount awarded under various provisions of Land Acquisition Act to determine its taxability and observed as under:- 49. As discussed hereinabove, Section 23(1A) provides for additional amount. It takes care of increase in the value at the rate of 12% per annum. Similarly, under Sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtakes the character of compensation and is treated differently. The interest component on enhanced compensation under Section 28 is taxable under Section 56 of the Act as income from other sources . 24. The Apex Court in Ghanshyam (HUF) s case (supra), considered this aspect as under: . The award of interest under Section 28 of the 1894 Act is discretionary. Section 28 applies when the amount originally awarded has been paid or deposited and when the Court awards excess amount. In such cases interest on that excess alone is payable. Section 28 empowers the Court to award interest on the excess amount of compensation awarded by it over the amount awarded by the Collector. The compensation awarded by the Court includes the additional compensation awarded under Section 23(1-A) and the solatium under Section 23(2) of the said Act. This award of interest is not mandatory but is left to the discretion of the Court. Section 28 is applicable only in respect of the excess amount which is determined by the Court after a reference under Section 18 of the 1894 Act. Section 28 does not apply to cases of undue delay in making award for compensation. See: Ram Chand and Ors. etc. v. Unio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compensation it was held that tax had rightly been deducted at source as it was observed that interest in that case would not form part of compensation and exemption in respect of compensation awarded in lieu of acquisition of agricultural land would not be applicable. Thereafter, a Co-ordinate Bench of this Court in Jagmal Singh and another vs. State of Haryana and another, Civil Revision No. 7740 of 2012, decided on 18.07.2013 MANU/Ph/1134/2013, while considering all the aforesaid judgments observed as under:- It is clear from the observations of the Supreme Court that interest under Section 28 is, unlike under Section 34 of the 1894 Act, an accretion in value and regarded as part of the compensation itself which is not the case of interest under Section 34. With a clear statement of law obtaining through the Supreme Court, I would have no difficulty in saying that any component of compensation that goes towards the discharge of liability under Section 28 must be taken as part of the compensation to which Section 194 LA shall apply and that compensation being the value of agricultural land, then the exclusion as provided under the Section shall also be attracted. In thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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