TMI Blog2014 (3) TMI 1199X X X X Extracts X X X X X X X X Extracts X X X X ..... ed under section 28 is part of the amount of compensation whereas interest u/s 34 is only for delay in making payment after compensation. In the present case, the amount is received u/s 28 of the Land Acquisition Act, 1894 and therefore, according to us this is a compensation and cannot take part of the compensation u/s 45(5) and is exempt u/s 10(37) of the Income Tax Act, 1961. Accordingly, the Ld. CIT(A) is not justified in confirming the action of the A.O. we direct the A.O. to delete the addition made. Thus, all the grounds of the assessee are allowed. - I.T.A. No.755(Asr)/2013 - - - Dated:- 18-3-2014 - SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER Appellant by : Sh. J. S. Bhasin, Adv. Respondent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .T.Act, 1961, is another act of ld. CIT(A), which is opposed to the near facts and the settled legal position. 5. That the ld. CIT(A) s stand is contemptuous not only for defying the decision of Hon ble Apex Court supra, but also in ignoring the subsequent decisions of Hon ble P H High Court and various other High Court s cited before the ld. CIT(A), fully accepting and following the mandate of Hon ble Supreme Court, supra, on identical issue. 6. That by any reckoning, the impugned order of ld. CIT(A) being contrary to law and the facts of the case, deserves not to be sustained. 7. That having been put to undue litigation, the assessee prays to be granted appropriate cost in the matter. 2. The brief facts of the case as per AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... P..Parmanand. Since the assessee has filed a certificate dated 23.08.2012 from the Sub Divisional Magistrate, Gurdaspur, certifying therein that land acquired by the aforesaid authorities was situated beyond the two kilometers from the local limit of Municipal Committee, Dinanagar and was being used as an Agricultural land, capital gains on the said is exempt u/s 10(37) of the Act, being compulsory acquisition of agriculture land. It is worth while to mention here that by virtue of amendment in section 145A(b) of the Act vide Finance (No.2) Act of 2009, it has been provided that interest received by the assessee on compensation or on enhanced compensation as the case may be, shall be deemed to be the income of the year in which it is rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated 02.11.2012 and found that interest of Rs.17,78,766/- was awarded to the assessee on the enhanced compensation by the Addl. Distt. Judge vide his order dated 14.03.2008 u/s 28 of theLand Acquisition Act. By virtue of amendment in section 145A(b) of the Act vide Finance (No.2) of 2009 which is effective from 01.04.2009 (A.Y. 2010-11), interest received by an assessee on compensation or on enhanced compensation as the case may be, forms part of the assessee s income of the year in which same is received under the head Income from other sources under clause (viii) of sub section (2) of section 56 of the Act. The contention taken by the assessee s counsel that amendment made by the Finance (No.2) Act, 2009 is not clear with regard to char ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... @ 50% as provided in clause iv of section 57 of the Act. 4. The Ld. CIT(A) confirmed the action of the Assessing Officer. 5. The Ld. counsel for the assessee read the decision of the Hon ble Supreme Court in the case of CIT vs.Ghanshyam (HUF) (2009) 182 Taxman 368 (SC) and argued that the amount received by the assessee is under section 28 of the Land Acquisition Act, 1894 and not u/s 34 of the said Act. The relevant para of the decision of Hon ble Supreme Court in the case of CIT vs. Ghanshyam (HUF) (2009) 315 ITR 1 is reproduced as under: 24. To sum up , interest is different from compensation. However, interest paid on the excess amount u/s 28 of the 1894 Act depends upon a claim by the person whose land is acquired whereas in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the value of the lands acquired and interest for undue delay. Interest u/s 28 unlike interest u/s 34 is an accretion to the value, hence, it is a part of enhanced compensation or consideration which is not the case with the interest u/s 34 of the 1894 Act. So also additional amount u/s 23(IA) and solatium u/s 23(2) of the 1961 (sic-1894) Act forms part of enhanced compensation u/s 45(5)(b) of the 1961 Act. In fact, what we have stated hereinabove is reinforced by the newly inserted clause (c) of section 45(5) by the Finance Act, 2003 w.e.f. 1.4.2004. The newly inserted clause envisages a situation wherein the assessment for any year:- -the capital gain arising from the transfer of a capital asset is computed by taking the -compen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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