TMI Blog2022 (11) TMI 1201X X X X Extracts X X X X X X X X Extracts X X X X ..... grievance raised in the instant appeal challenges correctness of both the learned lower authorities action assessing his interest income of Rs.56,48,961/- received u/s 28 of the Land Acquisition Act, 1894 as taxable u/s 56(2)(viii) r.w.s. 57(iv) of the Act. The CIT(A) s detail discussion affirming the Assessing Officer s action to this effect reads as follows :- 9. In view of the decisions of the Hon'ble Apex Court in Bikram Singh case (supra) wherein it has been held that the interest received as income on the delayed payment of the compensation determined u/s. 28 or 3l of the Land Acquisition Act, is a taxable event, Manjeet Singh (HUF) case and Balasah Raosaheb Bidwe and others (supra) cited above, I hold that there is no infirmity in the order passed by the Assessing Officer, whereby compensation received u/s.28 of the L.A. Act was brought to tax in terms of section 56(2)(viii) of the I.T. Act. 10. The assessee has also contended that he has received only 25% of the amount deposited in the court out of 50% of the amount which was permitted to be withdrawn by furnishing solvent security. It was stated whether the matter has not reached the final stage, the questi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew enactment in section 145A of the Act the amount of compensation or enhanced compensation shall be taxable in the year of its receipt. Therefore, 1 direct the assessing officer to find out the exact, amount of interest received by the assessee as a result of compensation enhanced compensation and bring only that amount to tax u/s.56(2)iii) of the Act in the year in which it was received. If any amount has been kept as fixed deposits on the direction of the Hon'ble Court, then the same shall also brought to tax due to the fact of the assessee having received the said amount. The amount of interest which has not been received by the assessee cannot be brought to tax by virtue of operation of the provisions of section 145 clause-(b). 12. As far as the reliance of the proviso to section 45(5) after clause (b) of sub-section (5) of section 45 by the Finance (No.2) Act, 2014 with effect from 01/04/2015 is concerned, I hold that the same shall be applicable in respect of compensation received on or after 01.04.2015. This is for the reason that the Act does not specify the retrospective operation of the said proviso. Since in this case it appears that compensation was received b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Supreme Court in CIT Vs. Ghanshyam (HUF) (2009) 315 ITR 1 (SC) before the Tribunal in which it has been held that interest u/s.28 under The Land Acquisition Act, is to be taxed as part of consideration on receipt basis. This judgment was delivered on 16-07-2009. The Finance (No.2) Act, 2009 w.e.f. 01-04-2010 inserted clause (viii) to section 56(2) providing that: income by way of interest received on compensation or on enhanced compensation referred to in sub-section (1) of section 145B shall be chargeable to income-tax under the head Income from other sources . Section 145B(1) provides that: Notwithstanding anything to the contrary contained in section 145, the interest received by an assessee on any compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the previous year in which it is received . Thus it is palpable that post the decision in Ghanshyam (supra), a statutory amendment has been carried out providing that income by way of interest received on compensation or on enhanced compensation shall be chargeable to income-tax under the head Income from other sources . 5. The question of taxability of interest received u/s 28 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 34 casts obligation upon Collector to pay interest after compensation is worked out. Section 28 puts similar obligation upon the Court when the Court finds that the compensation awarded under section 11 was inadequate. Therefore, there is no change in nature of interest either u/s.28 or section 34. Even if court hikes compensation for land and interest is awarded under Section 28 of the Act, upon such increased compensation, in the light of larger Bench judgment, the Department and Disbursing Authorities are bound to effect deduction of TDS . On the interplay between the Hon ble Apex Court judgments in Ghanshyam (supra) Bikram Singh (supra), the Hon ble Bombay High Court in para 4 found the: `issue to be squarely covered by the larger Bench judgment of the Apex court in Bikram Singh (supra). Then it noted in para 9 of the judgment that: We have perused para 24 and 25 of the judgment of the Apex Court in Commissioner of Income Tax Vs. Ghanshyam (supra). We find that the Hon ble Apex Court there, was not called upon to look into the Larger Bench judgment delivered earlier in case of Bikram Singh (supra). In para 7, the Hon ble Larger Bench has found that the interest paid u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural land, tax at source was not to be deducted. The Hon ble High Court directed the Income-tax Department to refund the amount to the collector and held: that the Collector will determine whether the compensation paid is for property other than the agricultural land or otherwise and whether deduction of tax at source was permissible under other provisions of law .. . Aggrieved thereby, the Revenue approached the Hon ble Supreme Court pleading that the matter should have been remitted to the AO for deciding the nature of land acquired and not the Collector as it was the AO who was to come to the conclusion whether land was agricultural or not. Accepting the contention on behalf of the Revenue, the Hon ble Supreme Court held that the claimant should approach the concerned AO and raise the issue that no tax was payable on compensation/enhanced compensation which was received by them as their land was agricultural land. It was further observed that, while determining as to whether the compensation paid was for agricultural land or not, the AO will keep in mind the provisions of Section 28 of the Land Acquisition Act and the law laid down by this Court in CIT, Faridabad Vs. Gha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igatory on the part of the assessee to prove that the land was being used for agricultural purposes in A.Y. 1994-95 and 1995-96. The assessee could not file any proof regarding the cultivation of land in the above years. The 7/12 extracts submitted by the assessee were found to be pertaining to land at Vasangaon Gut no. 11, which was not acquired by the Government. He held that the land at Khadgaon, acquired by the Government, was an asset u/s 2(14) of the Act. He made a reference to the DVO for determining the value of the said land as on 1.4.1981, which was found at Rs.16,000/- per hector. On this basis, he computed long term capital gain at Rs.38,58,365/-. The ld. CIT(A) affirmed the order of the AO on this count. 13. Before us, the ld. AR contended that the authorities below erred in considering the correct piece of land acquired by the assessee. It was submitted that, in fact, land at Gut No.11, Vasangaon was acquired in respect of which the extant compensation was awarded. He submitted that the AO wrongly took note of some different land at Khadgaon, Tq. Latur, which was not acquired. In support of his contention, the ld. AR placed on record a Notice with reference to la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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