TMI Blog2019 (1) TMI 1712X X X X Extracts X X X X X X X X Extracts X X X X ..... ned year on the compulsory acquisition of its land u/s 28 of the Land Acquisition Act, is in the nature of compensation and not interest which is taxable under the head income from other sources u/s 56 of the Act as held by the authorities below. The compensation being exempt u/s 10(37) of the Act is not disputed. In view of the same the order passed by the CIT(Appeals) upholding the addition made by the AO on account of interest on enhanced compensation is, not sustainable. - Decided in favour of assessee. - ITA No. 1823/Del/2016 - - - Dated:- 31-1-2019 - Shri H.S. Sidhu, Judicial Member And Shri L.P. Sahu, Accountant Member For the Appellant : Sh. Vijay Kumar Gupta, Adv. For the Respondent : Sh. Surender Pal, Sr. DR ORD ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 02-03, which was assessed vide order dated 20.09.2010 u/s 143(3)/147 of the Income-tax Act, 1961. Now the assessee received second enhanced compensation of ₹ 2036576/- from Land Acquisition Officer Urban Estate, Faridabad during the present period, which the assessee added in her capital. Sir, the assessee disclosed this enhanced compensation in her income tax return filed for the period under exempt income because enhanced compensation is exempt u/s 10(37) of the Income-tax Act, 1961. We are enclosing herewith statement of enhanced compensation as per Annexure B for your record . 3. Further, the assessee submitted a copy of statement of enhanced compensation issued by LAC Urban Estate Faridabad, according to which the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r observed that section 57(iv) and 56(2)(viii) were inserted by the Finance Act, 2009 w.e.f. 01.04.2010 and referring to section 145A(b), 50% of interest received on compensation or enhanced compensation is taxable in the year of receipt. He also observed that the decision of Hon ble Supreme Court in the case of CIT v. Ghanshyam HUF, 315 ITR 01 (SC) was prior to insertion of Finance Act, 2009, therefore, he did not give relief to the assessee and taxed 50% of the interest received, i.e., ₹ 7,19,220/- in the hands of the assessee. The assessee appealed before the ld. CIT(A). The ld. CIT(A) observed that no interest has been paid u/s. 34 of the Land Acquisition Act and that according to the amended provisions, the assessee is liable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r agricultural land or not the Assessing Officer(s) will keep in mind the provisions of Section 28 of the Land Acquisition Act and the law laid down by this Court in 'Commissioner of Income Tax. Faridabad v. Ghanshyam (HUF) [2009 (8) SCC 412] in order to ascertain whether the interest given under the said provision amounts to compensation or not. 9.1 The said decision as rightly pointed out by the Ld. counsel for assessee have been rendered by the Hon'ble Apex Court subsequent to the decision passed by the Hon'ble Jurisdictional High Court in the case of Manjeet Singh(HUF) (supra) which had dealt with the decisions of the Hon'ble Apex Court in Ghanshyam, HUF (supra). Therefore, in view of the same, the proposition laid d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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