New User   Login      
Tax Management India .com TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2015 (12) TMI 1066 - PUNJAB AND HARYANA HIGH COURT

2015 (12) TMI 1066 - PUNJAB AND HARYANA HIGH COURT - TMI - Release of amount of TDS from the compensation of their acquired land seeked - Held that:- Examining the issue of taxability of interest under Section 28 of the Act, in Commissioner of Income Tax v. Bir Singh (HUF) [2010 (10) TMI 581 - PUNJAB & HARYANA HIGH COURT ] it was held by the Division Bench of this Court that the interest awarded by court on enhanced compensation under Section 28 of the Act was chargeable to tax as income from ot .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ryana. AJAY KUMAR MITTAL, J. 1. This order shall dispose of three petitions bearing CWP Nos. 10125, 10135 and 10230 of 2015 as according to learned counsel for the parties the identical issues are involved therein. For brevity, the facts are being extracted from CWP No. 10125 of 2015. 2. CWP No. 10125 of 2015 has been filed by the petitioners under Articles 226/227 of the Constitution of India praying for issuance of a writ in the nature of mandamus directing the respondents to release the amoun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

1894 (in short the Act ) for the public purpose for the development and utilization of Kundli-Manesar-Palwal Road in District Gurgaon. The Land Acquisition Collector vide award dated 10.5.2006 awarded compensation at the rate of ₹ 12.50 lacs per acre. The petitioners filed reference under Section 18 of the Act and the Additional District Judge, Gurgaon vide award dated 27.8.2012 enhanced the compensation at the rate of ₹ 43,17,841/- per acre. The petitioners received Form-D (Annexur .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nder Section 28 of the Act on acquisition of the agricultural land. Reliance was placed upon the judgments of the Apex Court in Commissioner of Income-tax v. Ghanshyam (HUF) (2009) 315 ITR 1 (SC) and of this Court in Civil Revision No. 7740 of 2012 (Jagmal Singh and another v. State of Haryana and another) decided on 18.7.2013 (Annexure P-5). 5. On the other hand, learned State counsel opposed the prayer made by the petitioners by pleading that the TDS was rightly deducted by the respondents on .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

prescribed under Part B of Chapter XVII of the Act. This is in substance, provisions for recovery of tax payable by the assessees and do not in any manner affect the levy or the charge of tax. In certain cases obligation is cast on the person responsible for making such payments to deduct tax at source and deposit in Government Treasury, but under Section 199 of the Act, the deduction so made under Chapter XVII of the Act and paid to the Central Government is to be treated as payment on behalf .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

er than interest on securities . 8. It may also be noticed that amendment was made to subsection (2) of Section 56 of the 1961 Act by Finance (No.2) Act, 2009 w.e.f. 1.4.2010 to the following effect:- viii) Income by way of interest received on compensation or on enhanced compensation referred to in clause (b) of Section 145A. Further, amendment was also carried out in Section 145A of the 1961 Act by inserting clause (b) by Finance (No.2) Act, 2009 w.e.f. 1.4.2010 as under:- (b) interest receive .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

reliance has been placed by learned counsel for the petitioners, it may be noticed that a Division Bench of this Court in Manjeet Singh (HUF) Karta Manjeet Singh v. Union of India and others, CWP No. 15506 of 2013 decided on 14.1.2014 to which one of us (Ajay Kumar Mittal, J.) was a member had dealt with the similar issue holding that the petitioners cannot derive any benefit from Ghanshyam's case (supra) with the following observations:- 12. Adverting to the case law on the subject, inevita .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ion. It was noticed as under:- As we have pointed out earlier, as soon as the Collector has taken possession of the land either before or after the award the title absolutely vests in the Government and thereafter owner of the land so acquired ceases to have any title or right of possession to the land acquired. Under the award he gets compensation for both the rights. Therefore, the interest awarded under s. 28 of the Act, just like under s. 34 thereof, cannot be a compensation or damages for t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nterest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised. The expression 'interest' occurring in sub-section (28A) of Section 2 of the Act widens the scope of the term 'interest' for the purposes of the Act. 14. Another three Judges .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

51 ITR 151]. Therein, K. Subba Rao, J., as he then was, considered the earlier case law on the concept of "interest" laid down by the Privy Council and all other cases and had held at page 158 as under: "In a case where title passes to the State, the statutory interest provided thereafter can only be regarded either as representing the profit which the owner of the land might have made if he had the use of the money or the loss he suffered because he had not that use. In no sense .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ted by this Court in the case of TMK Govindaraju Chetty vs. Commissioner of Incometax, Madras [66 ITR 465], Rama Rai & Ors. vs. CIT, Andhra Pradesh [181 ITR 400] and K.S. Krishna Rao vs. CIT, A.P. [181 ITR 408]. Thus by a catena of judicial pronouncements, it is settled law that the interest received on delayed payment of the compensation is a revenue receipt eligible to income tax. It is true that in amending the definition of "interest" in Section 2(28A) interest was defined to m .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

eceived or payable in any manner in respect of any moneys borrowed or a debt incurred or enumerated analogous transaction would be deemed interest. That was explained by the Board in the circular referred to hereinbefore. But the question is: whether the interest on delayed payment on the acquisition of the immovable property under the Acquisition Act would not be eligible to income-tax? It is seen that this Court has consistently taken the view that it is a revenue receipt. The amended definiti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

delayed payment of the compensation determined under Section 28 or 31 of the Acquisition Act is a taxable event. 15. Now, we advert to the judgment of the Apex Court in Ghanshyam (HUF)'s case (supra) on the basis of which learned counsel for the assessee had sought reconsideration of judgment of this Court in CIT v. Bir Singh, ITA No.209 of 2004 decided on 27.10.2010 where Division Bench of this Court has held that element of interest awarded by the court on enhanced amount of compensation u .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e needs to be kept in mind in deciding this matter. Interest under Section 28 is part of the amount of compensation whereas interest under Section 34 is only for delay in making payment after the compensation amount is determined. Interest under Section 28 is a part of the enhanced value of the land which is not the case in the matter of payment of interest under Section 34. 17. In view of the authoritative pronouncements of the Apex Court in Dr. Sham Lal Narula, T.N.K.Govindaraja Chetty, Amarji .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

find any legal and valid ground for interference. The Special Leave Petitions are dismissed. 11. In view of the above and also the amendments made by the Finance (No.2) Act, 2009 w.e.f. 1.4.2010 noticed hereinbefore, no advantage can be derived by the petitioners from the judgment in Ghanshyam's case (supra). 12. Examining the issue of taxability of interest under Section 28 of the Act, in Commissioner of Income Tax v. Bir Singh (HUF), ITA No. 209 of 2004 decided on 27.10.2010, it was held b .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the Act even when compensation is treated as agricultural income and is not covered by Section 45(c) of the Act. We thus answer the questions in favour of the revenue and modify our order dated 5.7.2010 accordingly. The amount of interest on enhanced compensation is held to be taxable in the year of receipt irrespective of pendency of proceedings against award of enhanced compensation. 13. The judgment of learned Single Judge in Jagmal Singh's case (supra) (Annexure P-5) on which reliance .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version