TMI Blog2019 (10) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... JM: The appeal filed by assessee is against order of CIT(A)-1, New Delhi, dated 30.08.2016 relating to assessment year 2013-14 passed under section 143(3) of the Income-tax Act, 1961. 2. The only issue raised in the present appeal is against the assessibility of the amount received u/s 28 of the Land Acquisition Act (in short Act ). 3. The Ld.AR for the assessee pointed out that land of the assessee was acquired against which it received compensation u/s 28 of the Act, which was part of additional compensation received and not taxable. He also pointed out that portion of similar land was acquired in the case of his cousin brother Sh. Satish Kumar Gupta and the issue has been decided by the Tribunal. 4. The Ld. DR for the Revenue placed reliance on the orders of the authorities below. 5. We have heard the rival contentions and perused the record. The issue which arises in the present appeal is against the amount received u/s 28 of the LAC Act i.e. enhanced compensation. The claim of the assessee is that such enhanced compensation was part of the compensation and was not taxable in his hands. However, the c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dealt with the decision of the Hon ble Supreme Court in the case of Chet Ram (HUF) as well as the case laws of Ghanshyamdas and after analysing the same has again held that interest receipt on enhanced compensation u/s 28 of the Land Acquisition Act is in the nature of compensation. The finding of the Hon ble Tribunal as reproduced below:- 8. We have gone through the orders of the authorities below in the light of the arguments on either side and the decisions of the Hon ble Apex Court cited above. In the case of Ghanshyam (supra), the Hon ble Supreme Court held in unequivocal terms that the additional amount u/s 23(1A), solatium under section 23(2) and interest on excess compensation u/s 28 of the Land Acquisition Act form part of enhanced compensation u/s 45(5)(b) and, therefore, is subject to tax u/s 45(5) in the year of receipt. No contrary view is taken by the Supreme Court in the subsequent judgments and as on the date, law is fairly settled that the amount of interest received u/s 28 of the land Acquisition Act is in the nature of capital gain. In the case of Hari Singh (supra) while dealing with the similar question under identical set of facts while setti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o above, we do not have any doubt in our mind as to the law in this aspect and while respectfully following the ratio laid down by the Hon ble Supreme Court in the case of Ghanshyam (supra) and Hari Singh (supra) above, direct the ld. AO to refund the TDS amount that was deducted on account of the interest received under section 28 of the Land Acquisition Act Also. With these directions, we allow the appeal of the assessee. 11. In the result, the appeal of the assessee is allowed. 5. Further, we find that the Hon ble Chandigarh Bench of the Tribunal vide order dated 11/01/2019 has dealt with the case law of Manjit Singh and relying on the order of the Hon ble Supreme Court in the case of Hari Singh has allowed relief to the assessee by cancelling order u/s 263 by holding as under:- 6. During the course of hearing before us, Id. counsel for the assessee pointed out that subsequent to the decision passed by the Hon ble jurisdictional High Court in the case of Naresh Jain (supra),which was heavily relied upon by the Id. Pr. CIT in his order for stating that the proposition laid down by the Apex Court in the case of Ghanshyam, HUF sto ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... taxes had been deducted at source. The Hon'ble High Court had directed refund of the taxes to the assessees and had directed the Land Acquisition Officer/Collector to examine whether their lands were agricultural or not and decide whether taxes were liable to be deducted therefrom as per the provisions of the Act. The Union of India had come in appeal before the Hon'ble Supreme Court against this order of the High Court stating that it was the Assessing Officer who was capable of determining the nature of land as being agricultural or not for the purposes of taxability under the Income Tax Act, 1961. The same was agreed to by the Hon'ble Apex Court and they had, therefore, directed the AO to examine this aspect and further categorically stated that the proposition laid down by it in Ghanshyam, HUF(supra) vis a vis interest received u/s 28 of the LAA, 1894 be kept in mind to ascertain whether the interest received amounts to compensation or not. The relevant findings of the Hon'ble Supreme Court in this regard are as under : We find force in the submission of the learned Additional Solicitor General insofar as the challenge to the direction given to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of Income Tax Act. (4) Where such notices have not already been issued or assessments have not already been made, if such'an action is taken within a period of two months from today, issue of limitation would not come in the way of the Income Tax Department. This order is passed having regard to the fact that the present proceedings were pending in this Court because of which it was not possible for the Income Tax Department to issue these notices earlier. 9. In view of the categorical affirmation of the proposition laid down by the apex court in the case of Ghanshyam HUF(supra) ,in its latest decision in the case of Hari singh (supra), we hold that there is no error in the order of the AO treating the interest received by them u/s 28 of the LAA,1894,as compensation following the proposition laid down by the apex court in Ghanshyam HUF(supra).The order passed by the Ld.Pr.CIT u/s 263 is therefore set aside. 10. The appeal of the assessee therefore stands allowed . 6. The argument of the Ld. DR that the case law of Chet Ram (HUF) decided by the Hon ble Apex Court will be applicable do not hold any force in v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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