TMI Blog2009 (10) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... consequent upon the acquisition of land, enquiry was conducted and information was obtained and it was found that no deduction has been made under section 194-A of the Act in respect of the interest paid to the owners of the land acquired and accordingly, after sue procedure order was passed by the Tax Recovery Officer, Belgaum under section 201(1) and 201 (1A) of the Act, holding that respondent had contravened the provisions of section 194-a in not deducting the tax at source in respect of payment of interest for belated payment of compensation for the land acquired. Tax was levied amounting to ₹ 1,96,780/- and interest of ₹ 59,260/- was demanded and total demand of ₹ 2,56,040/- was made. Being aggrieved by the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n collector ors. (1997) 139 CTR (SC) 475; (1997) 224 ITR 551 (SC). 5. The learned counsel appearing for the respondent submitted that the said decision is not helpful to the appellants in this case and in fact what has been laid down by the hon ble supreme court in the said case is that interest paid for belated payment of compensation is exigible to income-tax, however Section 194-A would not be applicable for such payment and respondent has followed the circular issued by government of Karnataka dated 20.05.2008 on the basis of the judgement of Hon ble supreme court. 6. We have given careful consideration to the contentions of the learned counsel appearing for the parties and scrutinized the material on record. We answer the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt has clearly laid down in para 7 of the said judgment as follows: 7. But the question is whether the interest on delayed payment on the acquisition of the immovable property under the Acquisition Act would not be exigible 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 cov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n laid down by the Hon ble Supreme Court is that the interest payable for belated payment of compensation for the land acquired is exigible to tax and Hon ble Supreme Court has confirmed the deduction of tax towards payment of interest under section 194-A of the Act and had further observed Section 194-A of the Act has no application for the purpose of this case . In view of the fact that land acquisition Officer had already deducted the amount under section 194-A of the Act, mere fact that the assessee can spread over the income for a period in which payment came to be made would not by itself is a ground to exempt it from section 194A of the Act, as it is always open for the assessee to claim refund of the amount, if tax deducted in exce ..... X X X X Extracts X X X X X X X X Extracts X X X X
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