TMI Blog2019 (5) TMI 676X X X X Extracts X X X X X X X X Extracts X X X X ..... OURT] that after examining the facts to apply the provisions contained in the Income-tax Act with a specific reference to the agricultural land stating that in case if it is found that the compensation was received in respect of the agricultural land, the tax deposited with the Income-tax Department shall be refunded to these depositors. What was acquired by the Government was an agricultural land and such a fact is well evident from the assessment order itself . As a matter of fact, AO, by granting exemption under section 10(37) of the Act, refunded a sum of ₹ 1,22,01,723/-. Only question is whether the interest received u/s 28 of the Act assumes the character of enhanced compensation and consequently it is exempt u/s 10(37) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act ) and claimed refund of ₹ 32,75,862/- in the return of income. Learned AO found that as per Form D issued by the Land Acquisition Officer, Panchkula, the assessee had received enhanced compensation of ₹ 7,74,13,335/- which includes principal amount of ₹ 4,46,02,790/- and interest amount of ₹ 3,28,10,545/- from the LAO, Panchkula, during the year and on the enhanced compensation received, TDS amounting to ₹ 1,54,82,777/- was deducted out of which amount of ₹ 1,22,01,723/- was refunded to the assessee and credited in his account. 3. Learned AO passed order u/s 143(3) of the Act, basing on the amendment of sub section (2) of Section 56 and consequent amendment under clause (b) of Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, prayed before the learned CIT(A) that the levy of tax on the interest received u/s 28 of the Land Acquisition Act is illegal and has to be deleted. 5. Learned CIT(A) clearly found that this is a case of receipt of interest on enhanced compensation u/s 28 of the Land Acquisition Act. However, learned CIT(A) held that the decision of the Hon ble Supreme Court in the case of Gobind Bhai Mamaiya (supra) vide para 8 holds that the interest earned u/s 28 of the Land Acquisition Act is on enhanced compensation and be treated as an accretion to the value and part of the compensation making it eligible to tax. On this premise, learned CIT(A) held that inasmuch as the said judgment did not deal with the exemption u/s 10(37) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interim order passed by the High Court in pending appeals relating to the land acquisition has to be assessed for tax not in the year in which the said amount had been received. Learned DR further submitted in the case of Ghanshyam (supra) the Hon ble Apex Court held that even in cases where appeal is pending, the forum permits claimant to withdraw against security or otherwise, enhanced compensation, which is in dispute, the same is liable to be taxed u/s 45(5) in the year of receipt. Basing on this, he argued that the matter is squarely covered by the above decision in favour of the revenue and in all the matters, the Hon ble Supreme Court stated that the interest on the enhanced compensation is also liable to be taxed u/s 45(5) of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion after noticing the decision in the case of Ghanshyam (supra). 9. In this set of circumstances, it does not admit of any doubt as to the nature of receipt by way of interest u/s 28 of the Land Acquisition Act in the hands of the assessee or the applicability of the Income-tax Act to sch amount. When the Hon ble Supreme Court specifically directs in the case of Hari Singh (supra), the learned AO shall examine the facts of the case and then apply the law as contained, CIT(A) has not stated that such an amount shall be brought to tax u/s 45(5) without applying the provisions under 10(37) of the Act, which exempts such receipts from being taxed. It could be noted that Section 45(5) makes no reference to the nature of propert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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