TMI Blog2019 (10) TMI 921X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Act is in the nature of compensation. - Decided in favour of assessee - ITA No.5500/Del/2016 - - - Dated:- 18-10-2019 - Ms. Sushma Chowla, Judicial Member And Shri Anadee Nath Misshra, Accountant Member For the Appellant : Sh. Naresh Gupta, Assessee For the Respondent : Ms. Rakhi Bimal, Sr.DR ORDER PER SUSHMA CHOWLA, JM: The appeal filed by assessee is against order of CIT(A)-1, New Delhi, dated 07.09.2016 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 Rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed interest u/s 28 of Land Acquisition Act, 1894. The Hon ble Apex Court in the case of CIT vs Ghanshyam(HUF) 182 taxman 368 has clearly held that interest received by the assessee in view of section 28 of Land Acquisition Act 1894 is part of the compensation and therefore was not taxable. The Hon ble Delhi Bench of the Tribunal in the case of Shri Opinder Singh Virk, vide order dated 14/03/2019 has 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) an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order itself . As a matter of fact, learned 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 under section 28 of the Act assumes the character of enhanced compensation and consequently it is exempt under section 10(37) of the Act. In view of the decisions of the Hon ble Supreme Court referred to 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 orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e decision of the High Court in writ petition filed by the asseseees before the High Court. The issue before the High Court was that the assessees had received enhanced compensation on which tax had been deducted at source as per the provision of Section 194LA of the Act. The assessee had contended that no tax was deductible on the same as land was agricultural land and without examining these facts, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the said provision amounts to compensation or not. (3) The direction to refund the amount of Tax Deducted at Source (TDS) to the Land Acquisition Collector is, accordingly, set aside. However, in those cases where the amount has already been refunded, no interference is called for and it will be for the Income Tax Department to proceed in accordance with the provisions 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 compensatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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