TMI Blog2021 (11) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... onsideration regarding the taxability of interest on enhanced compensation is a debatable issue and do not constitute a mistake apparent on record. In view of the limited and restricted powers of rectification u/s 154 or u/s 254 as the case may be, it cannot be said that any mistake apparent on record had occurred in the order of the Tribunal. In view of the above discussion, these appeals of the assessee are hereby allowed. - ITA No. 7085/Del/2018 - - - Dated:- 25-10-2021 - Sh. Amit Shukla , Judicial Member And Dr. B. R. R. Kumar , Accountant Member Assessee by : Sh. Ved Jain , Adv. Revenue by : Sh. Sanjay Tripathi , Sr. DR ORDER Per Dr. B. R. R. Kumar , Accountant Member The present appeal has been filed by the assessee against the order of the ld. CIT(A)-I, Noida dated 30.07.2018. 2. Following grounds have been raised by the assessee: 1. On the facts and circumstances of the case the order passed by the learned CIT(A) is bad both in the eyes of law and on facts. 2. On the facts and circumstances of the case the learned CIT(A) has erred both on facts and in law in sustaining the addition on account of interest of enhanced compensation to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Gujarat High Court, Hon'ble Punjab Haryana High Court and by the Hon'ble Apex Court. 8. In the case of Inderjit Singh Sodhi (HUF) Vs. ITO in ITA No. 8808/Del/2019, order dated 19.06.2020 authored by one of the Member of this Bench held as under: 13. Undisputedly, the issue 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 acquisition of lands till the receipt of the compensation in the light of the decision of the Inderjit Singh Sodhi 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 interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sation. It is equally true that Section 45(5) of the 1961 Act refers to compensation. But as discussed hereinabove, we have to go by the provisions of the 1894 Act which awards interest both as an accretion in the value of the lands acquired and interest for undue delay. Interest under Section 28 unlike interest under Section 34 is an accretion to the value, hence it is a part of enhanced compensation or consideration which is not the case with interest under Section 34 of the 1894 Act. So also additional amount under Section 23 (1-A) and solatium under Section 23(2) of the 1961 Act forms part of enhanced compensation under Section 45(5)(b) of the 1961 Act. 8. It is clear from 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 an 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... preme Court are mentioned below: The order of the Bikram Singh Vs Land Acquisition Collector is dated 12.09.1996 - Interest of any nature is taxable irrespective of its receipt. The order of Ghanshyam (HUF) is dated 16.07.2009 It is to answer the above questions that we have analysed the provisions of sections 23, 23(1A), 23(2), 28 and 34 of the 1894 Act. As discussed hereinabove, section 23(1A) pro vides for additional amount. It takes care of increase in the value at the rate of 12 per cent per annum. Similarly, under section 23(2) of the 1894 Act, there is a provision for solatium which also represents part of enhanced compensation. Similarly, section 28 empowers the Court in its discretion to award interest on the excess amount of compensation over and above what is awarded by the Collector. It includes additional amount under section 23(1A) and solatium under section 23(2) of the said Act. Section 28 of the 1894 Act applies only in respect of the excess amount determined by the Court after reference under section 18 of the 1894 Act. It depends upon the claim, unlike interest under section 34 which depends on undue delay in making the award. It is true that inte ..... X X X X Extracts X X X X X X X X Extracts X X X X
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