TMI Blog2021 (2) TMI 883X X X X Extracts X X X X X X X X Extracts X X X X ..... iled the present appeal against the order dated 03.10.2019 passed by Commissioner of Income Tax (Appeals), Panchkula [for short the CIT(A) ] for the assessment year 2010-11, vide which, the Ld. CIT(A) has allowed the appeal filed by the assessee against the assessment order passed u/s 143(3) of the Income Tax Act, 1961 [for short the Act ]. 2. Brief facts of the case are that the appellant/assessee being Karta of HUF, filed its return of income for the assessment year under consideration declaring total income of ₹ 6,37,450/- after claiming exemption of ₹ 6,74,61,917/- u/s 10(37) of the Act. The return was processed u/s 143(1) of the Act. Subsequently, the Assessing Officer (AO) issued notice u/s 148 of the Act on the ground that the interest income received by the assessee on enhanced compensation on compulsory acquisition has escaped assessment. The assessee did not file fresh return in response to notice u/s 148 of the Act, however, requested to treat the original return filed as return filed in response to notice u/s 148 of the Act. Accordingly, AO issued notice u/s 143(2) and 142(1) calling for information and details. In response thereof, the Authorised Repre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n law by disregarding the decision of the Hon'ble High Court in the case of Manjeet Singh Vs. UOI Others reported as (2016) 237 Taxman 116 (P H) and decision in the case of CIT, PKL Vs. Prem Singh decided on 16.12.2010 in CM No. 27928-29-CII-2010 wherein the decision of the Hon'ble Apex Court in the CIT Vs. GhanshyamDass (HUF) reported as (12209) 315 ITR 1 SC was considered and it was held that the interest on enhanced compensation u/s 28 is chargeable to tax u/s 56 of the IT Act, as income from other sources. 4. It is prayed that the order of the Ld. CIT(A) be setaside and that of the AO be restored. 5. The appellant craves leave to add or amend the grounds of appeal before the appeal is heard and disposed off. 5. Before us, the Ld. Departmental Representative (DR) relying on the assessment order passed by the AO submitted that provisions of section56(2), 57(iv) and 145A have been amended w.e.f. assessment year 2010-11 and hence, the interest on compensation or enhanced compensation is chargeable to tax under the head income from other sources'. The Ld. DR further submitted that since the impugned order is not in accordance with the judgments of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Hon'ble Supreme Court in the case of Ghanshyam (HUF) (supra) or is to be taxed on the basis of apportionment for each year from the date of acquisition of lands till the receipt of the compensation in the light of the decision of the Hon'ble Supreme Court in the case of Rama Bai (supra); the second issue involved is as to whether the interest awarded u/s 28 of the Land Acquisition Act on enhanced compensation is to be treated as part of the enhanced compensation and will not be taxable separately as interest income under the Head income from other sources ? 8. We find that both these issues are covered by the aforesaid decision of the Hon'ble Supreme Court in the case of Ghanshyam (HUF) (supra) holding the same to be in the nature of compensation itself. The Court also dealt with the other aspect namely, the year of tax and answered this question by holding that it has to be tested on receipt basis, which means it would be taxed in the year in 8 which it is received. The said findings given in the case of Ghanshyam (HUF) (supra) have been reiterated by the Hon'ble Supreme Court in the case of GovindbhaiMamaiya (supra) observing as under: In s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above that whereas interest under Section 34 is not treated as a part of income subject to tax, the interest earned under Section 28, which is on enhanced compensation, is treated as a accretion to the value and therefore, part of the enhanced compensation or consideration making it exigible to tax. After holding that interest on enhanced compensation under Section 28 of 1894 Act is taxable, the Court dealt with the other aspect namely, the year of tax and answered this question by holding that it has to be tested on receipt basis, which means it would be taxed in the year in which it is received. It would mean that converse position i.e. spread over of this interest on accrual basis is not permissible. 9. The Ld. counsels for assessee has further brought our attention the latest decision of the Hon'ble Supreme Court in the case of CIT Vs. Chet Ram (HUF) dated 12.9.2017 in Civil Appeal No.13053/2017 wherein also the Hon'ble Supreme Court has again reiterated the proposition laid down in the case of Ghanshyam (HUF) (supra), which we find has been further reiterated in the case of Union of India vs. Hari Singh others in Civil Appeal No. 1504 of 2017 dated 15.9.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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