TMI Blog2015 (12) TMI 1123X X X X Extracts X X X X X X X X Extracts X X X X ..... period of one year from the date of taking possession and thereafter at the rate of 15% per annum from the date of expiry of one year on the amount of compensation or part thereof which remains unpaid or deposited before the date of such expiry. A plain reading of Sections 23(1A), 23(2) as also Section 28 of the 1894 Act clearly spells out that additional benefits are available on the market value of the acquired lands under Section 23(1A) and 23(2) whereas Section 28 is available in respect of the entire compensation - CWP No.15506 of 2013 - - - Dated:- 14-1-2014 - MR. JUSTICE AJAY KUMAR MITTAL AND MS. JUSTICE ANITA CHAUDHRY Mr. Pankaj Jain, Advocate for the petitioner Mr. Yogesh Putney, Advocate for the respondent JUDGEMENT Ajay Kumar Mittal,J. 1. This order shall dispose of CWP Nos. 15506, 26907, 26921 and 26924 of 2013 as according to the learned counsel for the parties, the issues involved herein are identical. However, the facts have been extracted from CWP No. 15506 of 2013. 2. Briefly, the facts necessary for adjudication of the controversy involved, as narrated in CWP No.15506 of 2013 are that Notifications under sections 4 and 6 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Apex Court in CIT v. Ghanshyam (HUF), (2009) 315 ITR 1, it was claimed that the amount of interest component contained under section 28 of the 1894 Act should form part of enhanced compensation and secondly the concluded matters should not be reopened. The earlier petition filed by the petitioner was dismissed as withdrawn vide order 3.7.2013, Annexure P.10 with liberty to file the fresh one with better particulars. Hence the present petitions with a further prayer to refund the Tax Deduction at source made out of the compensation of the land acquisition amount which is exempt from deduction under Section 194LA of the Act. 3. The claim of the assessee was controverted by the revenue by filing written statement. In the reply, the initiation of proceedings under Section 148 of the Act was sought to be justified by relying upon judgment of this Court in Bir Singh (HUF)'s case (supra). It has also been stated that legislature has introduced Section 56(2) (viii) and also Section 145A(b) of the Act by Finance (No.2) Act, 2009 with effect from 1.4.2010, according to which the interest received by the assessee on compensation or enhanced compensation shall be deemed to be his i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision nowhere holds that solatium is part of market value nor holds that additional amount under Section 23(1A) is payable on the solatium amount. Be that as it may. 15.More importantly, what requires to be noticed is that the entire consideration and analysis in that decision was with reference to the question whether solatium, additional amount and interest are part of 'enhanced compensation' for the purposes of Section 45(5) (b) of the Income Tax Act, 1961. The observations therein should be understood in the context of the provisions of the Income Tax Act. For example the decision also holds that interest payable under Section 28 of the Act is 'enhanced compensation' for the purposes of Section 45(5) (b) of Income Tax Act, which if taken as the interpretation with reference to the Land Acquisition Act, 1894, will be contrary to the Constitution bench decision in Sunder (supra). 16.We may also note that the decision clearly holds that additional amount is awardable only against the market value and not solatium: 'It is clear from reading of Sections 23(1A), 23(2) as also Section 28 of the 1894 Act that additional benefits are available on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ayable from the date of expiry of the said period of one year on the amount of compensation or part thereof which has not been paid or deposited before the date of such expiry. 9. The award of interest under Section 28 of the 1894 Act 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(1A) and the solatium under Section 23(2) of the said Act. 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. 10. Under Section 34 of the 1894 Act, the Collector awards interest on the compensation offered at the rate of 9% per annum for a period of one year from the date of taking possession and thereafter at the rate of 15% per annum from the date of expiry of one year on the amount of compensation or part thereof which remains unpaid or deposited ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ight to retain possession but only compensation payable by the State for keeping back the amount payable to the owner. The principle of Dr.Shamlal Narula's case (supra) had subsequently been applied by three Judges Bench of the Apex Court in a later decision in T.N.K.Govindaraju Chetty v. CIT, (1967) 66 ITR 465. 13. Further Section 2(28A) of the Act defines interest and was inserted by Finance Act, 1976 to be effective from 1.6.1976. It reads thus:- 'interest' means interest 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 bench of the Apex Court in Bikram Singh vs. Land Acquisition Collector, (1997) 224 ITR 551 following Dr. Shamlal Narula's case (supra) and taking into consideration definition of interest in Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 definition of interest was not intended to exclude the revenue receipt of interest on delayed payment of compensation from taxability. Once it is construed to be a revenue receipt, necessarily, unless there is an exemption under the appropriate provisions of the Act, the revenue receipt is exigible to tax. The amendment is only to bring within its tax net, income received from the transaction covered under the definition of interest. It would mean that the interest received as income on the 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, I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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