TMI Blog2022 (11) TMI 448X X X X Extracts X X X X X X X X Extracts X X X X ..... the coordinate Bench of the Tribunal categorically held that the interest received by the assessee u/s 28 of the Land Acquisition Act, 1984 on enhanced compensation is part and parcel of the compensation, if the agricultural land of the assessee has been acquired under compulsory acquisition and, thus, the same is exempt income u/s 10(37) of the Act. Respectfully following the said proposition, allow ground No.2 of the assessee and the AO is directed to delete the addition. - ITA No.1418/Del/2022 - - - Dated:- 21-9-2022 - Shri C.M. Garg, Judicial Member For the Assessee : Shri Suraj Bhan Nain, Advocate For the Revenue : Shri Mithalesh Kr. Pandey, Sr. DR ORDER This appeal filed by the assessee is directed against the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act received by the appellant which was part of enhanced compensation on - compulsory acquisition of her agricultural land exempt u/s 10(37) of the Act. 3. That the appellant craves the leave to add, modify, amend, or delete any of the grounds of appeal during appellate proceedings. 3. The ld. Counsel of the assessee did not press grounds 1 to 1.2, thus, the same are dismissed as not pressed. Ground No.2 4. The ld. AR submitted that the ld.CIT(A) has erred both in law and on facts in confirming the addition of Rs. 24,88,134/- made by the Assessing Officer as Income from other sources on account of interest u/s 28 of Land Acquisition Act received by the appellant which was part of enhanced compensation received on compu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ld. Sr. DR, placing reliance on the judgement of Punjab Haryana High Court in the case of Mahender Pal Narang vs. CBDT, dated 19.02.2020 in CWP No.17971 of 2019, submitted that the interest received on compensation or enhanced compensation is to be treated as Income from other sources and not under the head Capital gains. Therefore, the same is not exempt u/s 10(37) of the Act. 6. Placing rejoinder to the above, the ld. AR again drew our attention to the copy of the order of ITAT Delhi F Bench in the case of Ram Kishan (supra) and submitted that in this order, the Tribunal has considered lead judgement of the Hon ble Supreme Court in the case CIT vs. Ghanshyam (HUF) (supra) as well as the judgement of the Hon ble Punjab Ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch income. Section 57 (iv) allows deduction of 50% of such income without any proof of such expenditure. The provisions of the sections were introduced to remove an anamoly. At that time the existing provisions of the income tax provided that the income chargeable Under that profits and gains of business or profession or income from other sources shall be computed in accordance with either cash or Mercantile system of accounting regularly employed by the assessee. The honourable Supreme Court in case of Rama Bai versus CIT 181 ITR 400 held that arrears of interest computed on delayed or enhanced compensation shall be taxable on accrual basis. This has caused undue hardship to the taxpayers. With a view to mitigate that hardship provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as decided in favour of revenue. It is a settled law that Statute must be interpreted according to the intention of the legislature and the court should act upon the true intent of the legislation while applying the law and its interpretation. If a statutory provision is open to more than one meaning, the Court has to choose the interpretation which represents the intention of the legislature. In the present case the Department circular number 5/2010 dated 3/6 / 2010 clearly demonstrates the intention of the legislature. Accordingly we hold that interest on u/s 28 of the land acquisition act, 1894 being part of the compensation shall be treated as a tax free in the case of an individual and HUF u/s 10 (37) if transfer is of an agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X
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