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2020 (3) TMI 1115

..... uo; or “Income from other sources” - HELD THAT:- The scheme with regard to chargeability of interest received on compensation and enhanced compensation has undergone a sea change with the insertion of Sections 56(2)(viii) and 57(iv) of the 1961 Act. Section 56 deals with income from other sources and a specific provision has been inserted by way of sub-section 2(viii), whereby the interest received on compensation or enhanced compensation, as referred to in clause (b) to Section 145A has been included under the head 'Income from other sources'. In clause (iv) to Section 57, deduction of fifty per cent is provided on interest received on compensation or enhanced compensation. In view of the amendments, the decision of Ape .....

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..... ICE AVNEESH JHINGAN Mr. Pankaj Jain, Senior Advocate with Mr. Divya Suri and Mr. Sachin Bhardwaj, Advocates for the petitioner. Mr. Sandeep Goyal, Senior Standing Counsel for the respondents. ORDER AVNEESH JHINGAN, J. Aggrieved of the order dated 30.1.2019 dismissing the revision under Section 264 of the Income Tax Act, 1961 (for short, 'the 1961 Act'), the present petition is filed. The issue involved in narrow circumference is whether after the insertion of Sections 56(2)(viii) and 57(iv) of the Act w.e.f. 1.4.2010, can the assessee claim that interest received under Section 28 of the Land Acquisition Act, 1894 (for short, 'the 1894 Act') will part take the character of the compensation and would fall under the head Capita .....

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..... w, or a transfer the consideration for which is determined or approved by the Central Government or the Reserve Bank of India; (iv) such income has arisen from the compensation or consideration for such transfer received by such assessee on or after the 1st day of April, 2004. Section 56(2)(viii) (inserted by Finance (No.2) Act 2009 w.e.f. 1.4.2010. Income from other sources. 56(2) In particular, and without prejudice to the generality of the provisions of sub-section (1), the following incomes, shall be chargeable to income-tax under the head Income from other sources , namely:- xx xx xx (viii) income by way of interest received on compensation or on enhanced compensation referred to in clause (b) of Section 145A. Section 57(iv) of the 196 .....

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..... (2) of section 56, there would be deduction of fifty per cent. Section 145 provides for accounting method. Clause (b) of Section 145A provides that interest received on compensation or enhanced compensation shall be deemed to be income for the year in which it is received. Learned counsel for the petitioner argued that there is no amendment in Section 10(37) of the 1961 Act and by insertion of Sections 56(2)(viii) and 57(iv), the nature of interest under Section 28 of the 1894 Act will remain that of compensation. To fortify the submission, he relies upon the decision of the Supreme Court in Commissioner of Income-tax v. Ghanshyam (HUF), (2009) 315 ITR 1. The contention is that as per the decision of the Apex Court, the interest under Sect .....

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..... ve of the method of accounting followed by the assessee. 46.3 Further, clause (viii) is inserted in the sub-section (2) of the section 56 so as to provide that income by way of interest received on compensation or on enhanced compensation referred to in clause (b) of section 145A shall be assessed as income from other sources in the year in which it is received. 46.4 Applicability- This amendment has been made applicable with effect from 1st April, 2010, and will accordingly apply in relation to assessment year 2010-11 and subsequent assessment years. Section 45 of the 1961 Act deals with capital gains. By Finance Act, 1987, sub-section (5) was inserted in Section 45 and as per its clause (b), the enhanced compensation shall be chargeable u .....

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..... he decision of Apex Court in Ghanshyam's case (supra) does not come to the rescue of the petitioner to claim that interest received under Section 28 of the 1894 Act is to be treated as compensation and to be dealt with under Capital gains . The fact that there is no amendment carried out under Section 10(37) of the 1961 Act will not change the position. Section 10 deals with deductions and subsection (37) thereof deals with capital gains arising from transfer of agricultural land, it no where provides as to what is to be included under the head Capital gains . The argument raised is not well founded. Learned counsel has relied on Circular No. 5 of 2010 by merely reading clause 46.1. The said clause talks about undue hardship being cause .....

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..... hese decisions exemplify the general rule of statutory construction that words have to be construed strictly according to their ordinary and natural meaning, particularly when the statute is a fiscal one irrespective of the object with which the provision was introduced. Of course if there is ambiguity in the statutory language, reference may be made to the legislative intent to resolve the ambiguity. But if the statutory language is unambiguous then that must be given effect to. The legislature is deemed to intend and mean what it says. The need for interpretation arises only when the words used in the statute are, on their own terms ambivalent and do not manifest the intention of the legislature. In view of the above, it is held that the .....

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