TMI Blog2020 (2) TMI 256X X X X Extracts X X X X X X X X Extracts X X X X ..... LD THAT:- Assessee did not provide any explanation or statement in respect of the cash deposits. One can understand of not having ready availability of the documentary evidence but the assessee was not prevented from explaining the source of deposits which according to him was money received from his mother and uncle. No such explanation was even offered by the assessee before the AO. Thus, the explanation and documentary evidence filed before the ld. CIT(A) are result of afterthought only. The Ld. CIT(A) has rejected the additional evidences as same were not in accordance with Rule 46A of the Rules. In view of the facts and circumstances of the case, we are of the considered opinion that assessee failed to discharge its onus to explain the source of the cash deposits and therefore, Ld. CIT(A) is justified in sustaining the addition. We, accordingly, uphold the same. The grounds of the appeal of the assessee are accordingly dismissed. Penalty u/s 271(1)(c) - non granting of credit of TDS - HELD THAT:- As far as the issue of initiation of the penalty proceeding is concerned, the ground raised is premature at this stage and, therefore, same is dismissed as infructuous. Howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing Officer report wherein the AO has grossly erred while not granted any opportunity to be heard to the appellant and passed the remand report against the principle of natural justice. 7. The CIT (Appeal)-I has further erred in law facts in confirming the levying of interest, initiating the penalty proceeding under section 271(1) (c) of the Act and not granting credit of TDS. 2. Briefly stated facts of the case are that the assessee filed return of income on 31/03/2014, declaring income of ₹ 3,84,480/- including presumptive income of ₹ 2,45,000/- under section 44AE of the Income-tax Act, 1961 (in short the Act ). In the return of income, interest received of ₹ 83,68,370/- on enhanced compensation for agricultural land was treated by the assessee as exempt income. The case of the assessee was selected for the scrutiny assessment and notice under section 143(2) of the Act was issued and served upon the assessee. Though no compliance of notice under section 143(2) of the Act was made, however, subsequent notice issued under section 142(1) of the Act was complied partly by the Authorized Representative of the assessee. The scrutiny assessment unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bserving as under: 4.3 I have carefully considered the appellant s submissions. The only issue to be considered here is whether the interest received u/s 28 of the Land Acquisition Act is in the nature ol interest or is it a part of the enhanced compensation and whether the same is taxable under the head other sources. The issue whether the interest paid under the provisions of section 28 of LA Act is part of the enhanced compensation or is it taxable as interest income has been a debatable issue and has been considered by number of judicial authorities. 4.4 The Hon'ble Supreme Court in the case ofCIT V/s Ghansham (IIUF) (Supra) held that interest paid on the excess amount, u/s 28 of 1894 Act., depends upon a claim by the person whose land is acquired whereas interest u/s 34 is for delay in making payment. Interest u/s 28 is a part of enhanced value of land which is not the case in the matter of payment of interest u/s 34. 4.5 The llon'ble Punjab Haryana High Court considered (his issue in the ease of Manjeet Singh (HUF) Karta Manjeet Singh V/s Union of India and Ors. CWP No. 15506 of 2013 dated 14/01/2014 (2016) 237 taxmann 116. The Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s amount of compensation awarded by it over the amount awarded by the Collector. The compensation awarded by the Court includes the additional compensation awarded under Section 23(1 A) and the solatium under Section 23(2) of the said Act. Section 28 is applicable only in respect of the excess amount, which is determined by the Court after a reference under Section 18 of the 1894 Act. 10. Under Section 34 of the 1894 Ad, the Collector awards interest on the compensation offered at the rate of 9% per annum for a period of one year from the date of tc/kuiq possession and therea fter at the rate of 15% per annum from the date of expiry of one year on the amount o f compensation or part thereof Which remains unpaid or deposited before the date of such expiry. 11. A plain reading of Sections 23(1A), 23(2) as also Section 28 of the 1894 Act clearly spells out that additional benefits are available on the market value of the acquired lands under Section 23(1A) and 23(2) whereas Section 28 is available in respect of the entire compensation. The Constitution Bench of the Supreme Court in Sunder s case (supra) had approved the following observations of the Division Bench of thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m 1.6.1976. It reads thus:- 'interest' means interest payable in any manner in respect of any moneys borrowed or debt incurred (including a deposit, claim or other similar right or obligation) and includes any service fee or other charge in respect of the moneys borrowed or debt incurred or in respect of any credit facility which has not been utilised. The expression 'interest' occurring in subsection (28A) of Section 2 of the Act widens the scope of the term 'interest' for the purposes of the Act. 14. Another three Judges bench of the Apex Court in Bikrnm Singh Vs. Land Acquisition Collector, (1997) 224 ITR 551 following Dr. Shamlal Narula's case (supra) and taking into consideration definition of interest in Section 2(2SA) of the Act had recorded that interest under Section 28 of the 1894 Act was a revenue receipt and is taxable. I/ was held as under:- The controversy is no longer res Integra. This question was considered elaborately by this Court in Dr. Shamlal Nant la vs. CWP Commissioner of Income-tax, Jammu [51 ITR 151]. Therein, K. Subba Rao, J., as he then was, considered the earlier case law on the concept of interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eipt of interest on delayed payment of compensation from taxability. Once it is construed to be a revenue receipt, necessarily, unless there is an exemption under the appropriate provisions of the Act, the revenue receipt is exigible to tax. The amendment is only to bring within its tax net, income received from the transaction covered under the definition of interest. It would mean that the interest received as income on the delayed payment of the compensation determined under Section 28 or 31 of the Acquisition Act is a taxable event. 15. Now, we advert to the judgment of the Apex Court in Ghanshyam (HUF)'s case (supra) on the basis of which learned counsel for the assessee had sought reconsideration of judgment of this Court in CIT Vs. Bir Singh, ITA No. 209 of 200-1 decided on 27.10.2010 where Division Bench of this Court has held that element of interest awarded by the court on enhanced amount of compensation under Section 28 of the 1894 Act falls for taxation under Section 56 as income from other sources' in the year of receipt. 16. The reliance was placed upon following observations in Ghanshyam (HUF)'s case (supra) To sum up, interest is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Panchkula v. Prem Singh decided on 16.12.201 (I while considering, identical issue recorded as under:- 11. In this view of the mutter, the interest component on enhanced compensation under Section 28 is liable to be taxed under Section 56 of the Act even when compensation is treated' as agricultural income. And is not covered by Section 45(c) of the Act. We thus answer the questions in favour of the revenue and modify our order dated 5. 7.2010 accordingly. The amount of interest on enhanced compensation is held to he taxable in the year of receipt irrespective of pendency of proceedings against award of enhanced compensation. 11. The judgment of learned Single Judge in Man dir Nar Singh Puri s case (supra) (Annexare P-10) on which reliance has been placed by the petitioners being contrary to the aforesaid pronouncements cannot be taken to be interpreting the legal provisions correctly and is. thus, overruled. 12. Still further, this Court in Sard r. Haryana State Industrial and Infrastructure Development Corporation Ltd. and others, CWP No. 9739 of 2011 decided on 30.5.2011 dealing with the issue of tax deducted at source under similar circumstances had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gment has been statutorily abrogated by virtue of the amendment. The award of the Collector itself has been passed subsequent to the amendment on November 10. 2010. A Division Bench of this Court in Hari Kishan Versus Union of India 2014 (2) PLR 662 and another judgment in Attar Singh and others Versus State of Haryana and others. CWP No. 10125 of 2015 dated 3.9.2015 have reiterated the position of taxability on enhanced compensation under the Land Acquisition Act on the basis of the amendment and the fact of inapplicability of Ghanshyam 's case (supra), after the amendment to the statute. The decisions already rendered by the Court were parentally wrong, failing to note of the statutory amendment and its effect on the awards in the two decisions, referred to above. 2. The orders already passed are recalled and the review applications are allowed holding that interest on the additional award is taxable under income tax and liable to be deducted at the time of deposit 4.10 From the aforesaid decisions, it is evident that after the amendment of the Income Tax Act by way of insertion of Section 56(2)(viii) and Section 57(I)(v) by Finance Act 2009 w.e.f 01.04.2010, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ghanshyam (HUF) has also been considered. Subsequent to the decisions of the jurisdictional High Court referred above, the Hon ble Supreme Court in the case of CIT Vs. Chet Ram (HUF), dated 12.09.2017 in Civil Appeal No. 13053 of 2017, wherein also the Hon ble Supreme Court has again reiterated the proposition laid down in the case of Ghanshyam (HUF) (supra), which has further been reiterated in the case of Union of India Vs. Hari Singh Others in Civil Appeal No. 1504 of 2017, dated 15.09.2017, as under: (2) While determining as to whether the compensation paid was for 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. 4.5 In view of above decisions of the Hon ble Supreme Court, the interest received on compulsory acquisition of land under section 28 of Land Acquisition Act (LAA) would be in the nature of compensation and not interest, which is taxable under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been duly submitted in appeal proceedings. According to him the assessee was not able to find the bank statement during the course of the assessment proceeding. He submitted that entire transaction of the withdrawals and deposits are duly reflected in the bank account and verifiable from the relevant records. According to him, the assessee has discharge the initial burden casted upon him and, therefore, source of the cash deposit should be accepted. 5.3 On the other hand, Ld. Departmental Representative relied on the order of the lower authorities and submitted that the assessee did not satisfy the conditions for admitting additional evidence as provided under Rule 46A of the Rules and, therefore, the Ld. CIT(A) was justified in not admitting additional evidence and deciding the issue on the basis of the documents available on record. 5.4 We have heard the rival submission and perused the relevant material on record. We find that the assessee was provided ample opportunities to explain the source of cash deposits. The Ld. CIT(A) in para 5.5 of the impugned order has mentioned the details of the opportunities provided to the assessee. The relevant para is extracted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of appeal, iv) Where the AO has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. 5.7 In the appellant s case none of the conditions referred to in Rule 46A is satisfied. The AO did not refuse to admit any evidence. The next issue to be examined is whether the appellant was prevented by sufficient cause from producing the evidence. In this regard the appellant has not been able to justify as to how and why any explanation or evidence could not be produced by him, to explain his contentions, during the course of assessment proceedings. The documentary evidence requested for by the AO pertained to the period ending on 31.03.2013 and the same was called for by the AO during the period ending on 31.12.2015. The appellant has not been able to justify as to what prevented him from producing these evidences for such a long time. 5.9 The only other issues is whether the AO has made the order appealed against without giving sufficient opportunity to the appellant to adduce evidence relevant to any ground of appeal. From the facts on record it is clear that appellant was afforded s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued by the WTO requiring him to furnish returns and other material in support of his wealth-lax statements. After all the assessment proceedings could not be converted into a farce of mockery by him. He ought to have shown due regard to them. In the circumstances, there was no justification, to allow him a second innings by setting aside the assessments and ret/airing the WTO to frame them afresh . For the framing of those best judgment assessments, and the situation in which the assessee found himself rendered, he was himself to blame. He could not, therefore, be heard to make a grievance of his own defaults . What the principles of natural justice postulates is that a reasonable opportunity should be granted to the assessee of being heard. It is for him to avail that. In case, he does not choose to do so, the orders that follow cannot be held violative of those principles or the requirements of law. (emphasis supplied) 5.11 Hon'ble Supreme Court in the case of Segu Buchiah Setty, 77 ITR 539(SC) has held as under: It is inconceivable that the legislature could have ever intended that in case of multiple defaults for each one of which an ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, in the instant case, is the way the Appellate Commissioner has ignored the defiance of the assessee that in spite of the repeated notices and letters it never appeared before the Income-tax Officer with any information or material in response to the notice under section 148 of the Income-tax Act and the letters sent to it in this behalf. The Appellate Tribunal is not a court. Its powers, however, are expressed in the widest possible, terms under section 254 of the Act, may after giving both the parties to the appeal an opportunity of being heard, and pass such orders thereon as it thinks fit . Its powers, thus, are almost similar to the powers of an appellate court under the Code of Civil Procedure. A wide power, however, is not such that it can be exercised in any manner. The Tribunal can interfere with the orders of the lower authorities, but can do so only on judicial considerations and on the basis of reasons that suggest clearly that the lower authorities had committed an error of law or such fact that had vitiated its considerations and gone perverse for such reasons. The appellate courts which exercise wide powers to hear appeals both on issues of law as we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be allowed to call upon the assessing authority to prove conclusively what turnover he had suppressed. That fact must be within his personal knowledge. Hence, the burden of proving that fact is on him .. 5.14 If the facts of the present case are analyzed, it is absolutely that the Assessing Officer gave the assessee many opportunities to furnish explanation with evidence regarding the cash deposits in the bank account but the appellant failed to give any evidence with regard to the cash deposits under reference. The ratio of the above said judicial opinions is on all fours and applicable to the present case. The Assessing Officer has framed the assessment in a very judicious manner and not in arbitrary manner. 5.15 Keeping in view the aforesaid facts and circumstances of the case, additional evidences tiled by the appellant is not admitted. Reference in this regard may be made to the decision of the Hon'ble ITAT Chd.in the case of Dimple Exports Vs. DOT in 11 A No. 159/Chd/2014 dated 11.02.2016. Reference in this regard may also be made to the decision of the Hon'ble ITAT Chd. in the case of Rishi Sagar vs DCIT in ITA No. 10 /Chd./2013 dated ..... X X X X Extracts X X X X X X X X Extracts X X X X
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