TMI Blog2017 (4) TMI 1503X X X X Extracts X X X X X X X X Extracts X X X X ..... igation of facts on merits of the claim made by the assessee was necessary, the opportunity for which was not given by the Ld.CIT(A) to the AO. In any case, in view of the clear legal position under sections 143(2), 139(1), 139(4) and 139(5) of the Act as discussed earlier in detail; and in view of the facts and circumstances as discussed earlier in detail; and in view of precedents in the cases of Goetze (India) Pvt. Ltd. [ 2006 (3) TMI 75 - SUPREME COURT] and CIT vs Sun Engineering Works (P) Ltd. [ 2006 (3) TMI 75 - SUPREME COURT] we hold that the Ld.CIT(A) erred in favourably considering the claim of the assessee for the aforesaid amount - Accordingly, we set aside the order of the Ld.CIT(A) on this issue and reverse his direction given to the AO to reduce the taxable income - We direct that this amount will continue to be included as income of the assessee in accordance with return filed by the assessee u/s 139(4) of the I.T.Act. Thus, second ground of appeal filed by the Revenue is allowed. Benefit of indexation in respect of long term capital gain - HELD THAT:- We are of the view that the order of Ld.CIT(A) on this issue is a well-reasoned order and in accordance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ACIT, Circle-32(l), New Delhi (hereinafter called the Assessing Officer for short) has erred in holding that ₹ 20,60,810/-received as interest from compulsory acquisition is taxable income. 2) That on the facts and in the circumstances of the case, the Id. Assessing Officer has erred in not allowing a relief of Rs,79,32,289/- wrongly shown as taxable income in the return of income. 3) That on the facts in the circumstances of the case, even if for the sake of argument though not conceding it, the interest income is considered as taxable, Id. Assessing Officer has erred in taxing the interest income on receipt basis instead of accrual basis. 4) That on the facts and in the circumstances of the case the Assessing Officer has erred in disallowing a sum of ₹ 1,32,608/- u/s 48 of the IT Act, 1961 being the indexed cost of acquisition. (B.2). Vide order dated 31.10.2012 the Ld.CIT(A) deleted the aforesaid addition of ₹ 20,60,810/-. Further, in respect of addition of ₹ 1,32,608/- on account of long term capital gains, the Ld.CIT(A) directed the AO to re-compute the long term capital gains. In respect of Ground No.2 of appeal filed by the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to avail the benefits u/s. 10(37) of the Act as the enhanced compensation was received by the appellant after 1/4/2004 and on fulfilling the other conditions, the enhanced additional compensation received by the appellant does not form a part of the total income and was not subjected to capital gains as per the specific provisions laid down u/s. 45(5) of the Income-tax Act, 1961. It was also observed by the AO that no benefit would be available to the appellant in respect of interest received u/s.34 of the Land Acquisition Act on the delayed payment of enhanced/additional compensation and that the same was chargeable to tax as income from other sources. It was also noted by the AO that the entire interest income of ₹ 99,16,799/- received by the appellant was interest on delayed payment u/s.34 of the Land Acquisition Act and was to be treated as income for the assessment year 2008-09. It was also noted by the AO that the appellant reflected only ₹ 78,55,969/- in the return of income. Relying on the judgement by the Hon'ble Supreme Court in the case of CIT Vs. Ghanshyam Dass HUF (2009) 315 ITR 1, the AO brought to tax the difference in the interest income rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e letter was refused to be accepted on the pretext that the order has already been passed whereas the order has been passed on 30th November, 2010. The supreme court has very clearly discussed in the case of Gurpreet Singh vs. Union of India as to when the interest will be considered u/s 28 and when it shall be considered u/s 34 of the Land Acquisition Act, 1894. Para 27 of the order says going by the principle and for the moment keeping out the scheme of the Land acquisition Act, it appears to us that on payment or deposit of the amount awarded by the collector in terms of section 11 read with section 31 of the Act, the claimant can not thereafter claim any interest on that part of the compensation paid to him or deposited for the payment to him once notice of deposit is given to him. Thereafter, when the reference court enhances the compensation with consequential enhancement in solatium and interest under section 23(1A) of the Act and further awards interest on the enhanced compensation in terms of section 28 of the Act, the claimant/decree holder can seek an appropriation of the amounts deposited pursuant to that award decree, only towards the enhanced amount so awarded by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad and decided on her own that the interest received by us is under section 34 of the land Acquisition Act, 1894 without giving us any reasonable opportunity of being heard or even asking us whether the interest received by us was under 28 or 34. In order to give an opportunity the undersigned put forth a query to the AR of the appellant to file categorically the fact as to whether interest on enhanced additional compensation was received u/s.34 or u/s.28 of the Land Acquisition Act. Vide letter dated 8/5/2012, the AR stated that an amount of ₹ 99,16,799/- was interest received during the year u/s.28 of the Land Acquisition Act. Since there arose a dispute between the AO where interest received on compensation was brought to tax u/s.34 of the Land Acquisition Act and the appellant's plea that such interest was received u/s.28 of the Land Acquisition Act, the reply dated 8/5/2012 of the appellant was forwarded to the AO to examine the facts of the case and to comment on the taxability of interest income on enhanced compensation. Vide letter dated 4/9/2012, the AO submitted a reply wherein after considering the facts reiterated the stand taken by the AO in her order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15 ITR 1, held that interest received u/s 28 of the Land Acquisition Act, 1894 is exempt from Tax. Respectfully following the decision of the Hon'ble Apex Court in case of Ghanshyam HUF supra, I hold that the interest received by appellant u/s 28 of the Land acquisition Act is exempt and the addition made by the AO amounting to ₹ 20,60,810/- is hereby deleted. (C.1). At the time of hearing before us, the Ld. Departmental Representative (in short DR ) relied on the order of the AO. However, he was unable to point out any infirmity or defect or error in the order of Ld.CIT(A). On the other hand, the Ld. counsel appearing for the assessee strongly supported the order of the Ld.CIT(A). He also filed a copy of letter of Land Acquisition Officer Urban Estates, Faridabad, the relevant portion which is reproduced as under:- It is informed that interest of enhanced compensation paid in the above noted case in the year 2007-08 has been calculated u/s 28 of the Land Acquisition Act. It is further submitted that interest in all enhancement cases is given under the provisions of section 28 of the Land Acquisition Act. No interest u/s 34 of the Land Acquisition Act, 1894 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lant inter alia objected the action of the AO for non computing the Income as per latest decision of Apex Court in the case of CIT vs. Ghanshyam Dass HUF, while filing the return of income the appellant included interest income of ₹ 79,32,289 as taxable. The AO accepted the Income declared by the appellant and made an addition of ₹ 20,60,810/- which is deleted by me in my this order. The grievance of the appellant is that due to the ignorance of law the appellant offered the exempt income for tax and paid the income tax on exempt interest income, which was received U/s 28 of the land acquisition act, 1894. In the remand report the AO has stated that the appellant voluntarily offered the interest amount for taxation and since the AO was of the view that this is taxable income hence the question of re-computing the income does not arise. I have considered the facts of the case carefully. The Hon'ble Supreme Court of India in the case of Ghanshayam HUF supra has held that the interest received u/s 28 of the Land Acquisition Act is exempt from tax. Admittedly the interest received by appellant is u/s 28 of the Land Acquisition Act, hence is exempt from tax. This is also ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act. Had the assessee filed the return by due date, it would have been a return filed u/s 139(1) of the Act. Provisions regarding filing of revised return are contained in section 139(5) of the Act and its perusal shows that, while the assessee is permitted to file a revised return, if the original return was filed u/s 139(1) of the Act or was filed in response to notice u/s 142(1) of the I.T.Act. However, there is no permission u/s 139(5) for the assessee to file a revised return if the original return was filed belatedly u/s 139(4) of the Act. Thus, the return filed by the assessee u/s 139(5) of the Act is final qua the assessee, as far as claims beneficial to the assessee are concerned. While Revenue is authorized to scrutinize and examine the claims of the assessee by taking action u/s 143 or 147 of the I.T.Act; the assessee has no authority under law to make a claim before the Assessing Officer beneficial to the assessee subsequent to filing of (belated) return u/s 139(4) of the I.T.Act. As the assessee is barred from making any claims even before the Assessing Officer beneficial to him after filing of (belated) return u/s 139(4) of the Act; right of making any such c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sive loss or has not under-paid the tax in any manner, shall serve on the assessee a notice requiring him, on a date to be specified therein, either to attend the office of the Assessing Officer or to produce, or cause to be produced before the Assessing Officer any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished. (C.2.2). From a perusal of the aforesaid provisions of section 143(2) of the Act, it is noticed that the purpose of assessment proceedings is to ensure that the assessee had not understated the income or has not computed excessive loss or has not under paid the tax in any manner. It can be readily inferred that the assessment proceedings are meant for scrutinizing the claims made by the assessee and not for entertaining any claims which have not been made by the assessee. The assessment proceedings are not meant for the benefit of the assessee and cannot be carried out to confer a benefit to the assessee, specially when such claim for benefit was not made by the assessee by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court held that since the proceedings under section 147 of the Act are for the benefit of the Revenue and not for an assessee, and are aimed at gathering the escaped income of an assessee. Though the decision of Hon ble Supreme Court in the case of CIT vs Sun Engineering Works (P) Ltd. [supra] was in the context of proceedings u/s 147 of the Act, the principle is applicable even for proceedings u/s 143(2) of the Act because, as we have seen before, on perusal of provisions u/s 143(2) of the Act, it can be readily inferred that the assessment proceedings u/s 143(2) of the Act are not meant for the benefit of the assessee but are for the benefit of Revenue only so that the AO is able to ensure that the assessee has not understated the income or has not computed excessive loss or has not under paid the tax in any manner. (C.2.3). We have already noticed that the aforesaid claim of ₹ 79,32,289/-, was made by the assessee after the time limit prescribed u/s 139(5) of the Act for revision of return. We have also noticed that, in any case the assessee was not eligible to revise the return because the return filed by the assessee was not returned filed u/s 139(1) of the Act by p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... raphs 5 to 5.5 of the assessment order and paragraphs 7 to 7.3.6 of the impugned order of Ld.CIT(A). The property has been sold by the assessee in this year and long term capital gain has arisen to the assessee. The dispute is whether the benefit of indexation, for the purpose of computation of long term capital gain, is allowable to the assessee from the F.Y. 1987-88 (as held by the AO) or from 1981-82 [as claimed by the assessee and allowed by the Ld.CIT(A) in the impugned order]. The Ld.CIT(A) has discussed the facts of the case and the legal position in detail in her impugned appellate order. She has relied on the order of the Hon ble Delhi High Court in the case of Arun Shungloo Trust vs CIT [2012]. At the time of hearing, the Ld.DR appearing for the Revenue relied on the order of the AO. However, he was unable to point out any infirmity or defect or illegality in the order of Ld.CIT(A). The Ld. counsel for the assessee strongly supported the order of the Ld.CIT(A) and contended that the same should be upheld in view of the order of the Delhi High Court in the case of Arun Shungloo Trust (supra). We have heard both sides attentively. We have also considered all materials caref ..... X X X X Extracts X X X X X X X X Extracts X X X X
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