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TMI Blog2021 (5) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... 11-12. Following grounds have been raised in this appeal. "1. Whether on the facts and in the circumstances of the case, the Commissioner of Income Tax (Appeals) is right in law in holding that the interest received by the Assessee under section 28 of the Land Acquisition Act, 1894 during the impugned year on the compulsory acquisition of agricultural land is in the nature of compensation and exempt under section 10(37) of the Income Tax Act, 1961 and is not chargeable to tax under the head Income from Other Sources' under section 56 of the Income Tax Act, 1961? 2. Whether on the facts and in the circumstances of the case, the Commissioner of Income Tax (Appeals) is right in law in disregarding the statutory provision of Clause (vii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 10(37) of the Income Tax Act, 1961? 4. It is prayed that the order of Ld. CIT(A) be set-aside 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." 4. From the aforesaid ground, it would be clear that the grievance of the department relates to the changeability of the interest on compensation or enhanced compensation. 5. During the course of hearing, the Ld. Counsel for the assessee at the very outset has stated that an identical issue having similar facts and similar grounds of appeal was a subject matter of the appeal in the case of ITO vs. Shri Lakshmi Chander Gupta (HUF) wherein the issue has been decided by the ITAT Chandigarh Ben ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8/2014, ITA No. 948/Chd/2016 and ITA No. 949/Chd/2016. The Ld. CIT(A) has further reproduced the findings of the order of the coordinate Bench. The findings of the coordinate Bench in the group case discussed above read as under: "7. The core ground involved in these appeals is regarding the taxability of interest received on enhanced compensation u/s. 28 of the Land Acquisition Act, 1894. Now, there are two questions involved in these appeals, first issue is, regarding the year of taxability of the interest income whether it has to taxed in the year of receipt in the light of the decision 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee of the land acquired would be 'income', the enhanced compensation/consideration becomes income by virtue of Section 45(5)(b) of the Income Tax Act. The question was whether it will cover "interest" and if so, what would be the year of taxability. The position in this respect is explained in paras 49 and 50 of the judgment which make the following reading: "49. As discussed hereinabove. Section 23(1-A) provides for additional amount. It takes care of the increase in the value at the rate of 12% per annum. Similarly, under Section 23(2) of the 1894 Act there is a provision for solatium which also represents part of the enhanced compensation. Similarly, Section 28 empowers the court in its discretion to award interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xempt 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. The ratio of the order laid down vide order dt. 09/07/2018 in a group of cases in ITA No. 1413 to 1437/CHD/2016 would apply mutatis-mutandis to the core issue of taxability of interest received on enhanced compensation. 10. In view of the above discussion, these appeals of the assessees are hereby allowed." 8. As pointed out by the Ld. Counsel for the assessee, the Ld. CIT(A) has decided the issue involved in this case in favour of the assessee by following the ratio laid down by the Hon'ble Supreme Court as well as the decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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