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TMI Blog2019 (11) TMI 579X X X X Extracts X X X X X X X X Extracts X X X X ..... to as "the Act") dated 15/03/2016 relevant to Assessment Year (AY) 2008-09. The assessee has raised the following grounds of appeal: 1. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of AO in reopening the assessment u/s 147 of the Act. On the facts and circumstances of the case, learned CIT(A) ought to have held that the action of reopening is without jurisdiction and not permissible cither in law or on facts. 2. The learned C1T(A) has erred both in law and on the facts of the case in confirming addition of Rs. 59,39,819/- as income from other sources. 3. The learned CIT(A) has erred both in law and on the facts of the case in not holding that interest on enhanced compensation is part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll or any of the grounds of appeal at the time of or before the hearing of the appeal. 2. At the outset, the ld. AR for the assessee submitted that he has been instructed by the assessee not press Ground no. 1 challenging the reopening under section 147 of the Act. Therefore we dismissed the same as not pressed. The effective issue raised by the assessee is against the confirmation of the addition of Rs. 59,39,819.00 only by the Ld. CIT-A. 3. The brief facts of the case as culled out from the order of the authorities below are that the assessee is an individual and derives his income from the source of agricultural activities. The assessee, along with other co-owners/ parties, in the year under consideration received an amount of interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation with respect to all the parties. Thus, the total tax was determined at Rs.2,67,640.00 (53,538.00 * 5) with respect to all the parties and for all the assessment years to which such interest income pertains. 3.2 As the TDS certificate of Rs. 6,12,668.00 was issued in the name of the assessee, therefore he has paid the amount of tax through the TDS on behalf of all the parties and claimed the refund of the balance amount of Rs. 3,45,028.00 (Rs. 6,12,668.00 -Rs. 2,67,640.00). 3.3 However, the AO disagreed with the submission of the assessee by observing that the entire interest income belongs to the assessee only for the year under consideration. As such there was no direction in the order of the Hon'ble Gujarat High Court to allocate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irmed. Ground of appeal is dismissed. Being aggrieved by the order of the Ld. CIT (A), the assessee is in appeal before us. 5. The Ld. AR before us filed a paper book running from pages 1 to 24 and submitted that the land acquired by the Government under the compulsory acquisition scheme belongs to 5 parties. The names of such 5 parties are appearing in the order of the Hon'ble Gujarat High Court. 5.1 The Ld. AR also claimed that the impugned interest was awarded to the assessee for a period of 18 years beginning from the assessment year 1991-92 to the year under consideration (i.e. 2008-09). Therefore, the amount of such interest was allocated over a period of 18 years based on mercantile system of accounting and after placing reliance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n whether the impugned interest income is attributable to the period of 18 years beginning from the assessment year 1991-92 and up-to the assessment year 2008-09 as claimed by the assessee. In this regard, we note that the assessee was awarded the interest from the date of publication of the notification under section 4 of land acquisition Act 1894 i.e. 14-10-1990 up to deposit of the awarded amount. This fact can be verified from the order of the Hon'ble Gujarat High Court as discussed above. The relevant finding of the order extracts hereunder: The applicants are also entitled to get 30% amount under the head of Solatium and also entitled to get 9% interest for the first year and thereafter at the rate of 15% for the second year on tot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -11 to provide that the interest received by an assessee on compensation of enhanced compensation shall be deemed to be his income for the year in which it is received irrespective of the method of accounting followed by the assessee. In Smt. Rama Bai v. CIT [1990] 181 ITR 400/[1991] 54 Taxman 496 [also see CIT v. TNK Govindarajulu Chetty[1987] 165 ITR 231] the Supreme Court held that arrears of interest computed on delayed or enhanced compensation shall be taxable on accrual basis. The memorandum explaining the provisions of the Finance (No. 2) Bill, 2009 states that the aforesaid amendment has been made with a view to mitigate the hardship caused to the taxpayer on account of this judgment. The amendment will apply to all assessees in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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