TMI Blog2023 (1) TMI 824X X X X Extracts X X X X X X X X Extracts X X X X ..... e of CIT -vs.- Smt. Aruna Luthra [ 2001 (8) TMI 84 - PUNJAB AND HARYANA HIGH COURT] the Full bench of the Hon ble Punjab Haryana High Court has held that once the jurisdictional High Court or Supreme Court decides a particular issue, the judgment of jurisdictional High Court/Supreme Court would relate back to the date when particular section was inserted in the Act. Coming to the claim of assessee based on the basis of judgment of Hon'ble Supreme Court of India in CIT Vs. Ghanshyam (HUF) [ 2009 (7) TMI 12 - SUPREME COURT] it is pertinent to mention that the same was of 16.07.2009 however, subsequent amendments in the Act have been taken note by Hon ble Punjab and Haryana High Court in the judgment of Mehendra Pal Narang V. CBDT [ 2020 (3) TMI 1115 - PUNJAB AND HARYANA HIGH COURT] and which has been thoroughly relied by the Ld. Tax authorities below. CIT(A) has also taken into consideration the aforesaid observations of Hon ble P H High Court and specifically observed that the Hon ble High Court had considered the decision of the Hon ble Apex Court in the case Ghanshyam (HUF) 2009 (7) TMI 12 - SUPREME COURT] - The SLP filed by the assessee had been dismissed by Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Act read with section 56(2)(viii) of the Act was of the view that interest part of the enhanced compensation amounting to Rs. 5,97,28,560/- was taxable and further extending the benefit of Section 54(4) of the Act of deduction of 50% proposed additions. However, addition of Rs. 2,71,49,345/- was made accepting the submission of assessee that interest of enhanced compensation was Rs. 5,42,98,690/- and not Rs. 5,97,28,560/-. The ld AO particularly relied on the judgment of Hon ble Punjab and Haryana High Court in Mahendra Narang vs. CBDT: 120 taxmann.com 400 (P H). 3. In appeal before the ld CIT(A) the addition was sustained. The assessee is in appeal before this Tribunal raising following grounds of appeal:- 1. That the Commissioner of Income-tax (Appeals) [ CIT(A) ] erred on facts and in law in upholding the order of the assessing officer [ (AO) ] and assessing the income of the Appellant at Rs. 2,71,49,345/- as against Rs.1,96,750/- returned by the Appellant. 2. That the CIT(A) erred on facts and in law in not appreciating that the interest on enhanced compensation paid to Appellant under Section 28 of the Land Acquisition Act, 1894 forms partakes nature of enha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on enhanced compensation partakes nature of compensation received by the Appellant, falling under the head Capital Gains and not Income from Other Sources and is exempt by virtue of Section 10(37) of the Act. 4. Heard and perused the record. 5. On behalf of the assessee it was submitted that the Ld. Tax Authorities below have fallen an error in not taking into consideration the judgment of Hon ble Hon'ble Supreme Court in CIT Vs. Ghanshyam Dass and Ors.315 ITR 1 (SC) and have mechanically relied on the judgment of Punjab and Haryana High Court in case of Mahendra Pal Narang case (supra). It was submitted that in CIT Vs. Ghanshyam (HUF) (supra) it was held that interest received u/s 28 forms part of the enhanced compensation and exempted from tax u/s 10(37) of the Act, therefore, provision of section 145B and section 56(2)(viii) have been wrongly invoked. 6. On the other hand the ld DR submitted that the ld tax authorities below have rightly applied the binding precedent of jurisdictional High Court of Hon ble Punjab and Haryana High Court. 7. Giving thoughtful consideration to the matter on record at the outset the bench is of considered opinion that as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10(37) of the 1961 Act and by insertion of sections 56(2)(viii) and 57(iv), the nature of interest under section 28 of the 1894 Act will remain that of compensation. To fortify the submission, he relies upon the decision of the Supreme Court in CIT v. Ghanshyam (HUF) [2009] 182 Taxman 368/315The contention is that as per the decision of the Apex Court, the interest under section 28 of the 1894 Act is not compensatory for delay but would be treated akin to compensation. He buttresses his contention by relying upon Central Board of Direct Taxes Circular No. 5 of 2010 to contend that the amendment brought in 2010 was to remove the hardships created by the decision of the Supreme Court in Rama Sai v. Taxman 496/[1990] 181 ITR 400. Reliance is placed upon the decision of Gujarat High Court in Movaliya Bhikhubhai Balabhai v. ITO [2016 70 taxmann.com 45/388 ITR 343. 7. Before dealing with the contentions, relevant portion of the circular is quoted below: '46. Rationalizing the provisions of taxation of interest received on delayed compensation or on enhanced compensation. 46.1 The existing provisions of Income-tax Act provide that income chargeable under the head Prof ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sation has undergone a sea change with the insertion of sections 56(2) (viii) and 57(iv)of the 1961 Act. Section 56 deals with income from other sources and a specific provision has been inserted by way of sub-section whereby the interest received on compensation or enhanced compensation, as referred to in clause (b) to section 145A has been included under the head 'Income from other sources'. In clause (iv) to section 57, deduction of fifty per cent is provided on interest received on compensation or enhanced compensation. 10. In view of the amendments, the decision of Apex Court in Ghanshyam's case (supra) does not come to the rescue of the petitioner to claim that interest received under section 28 of the 1894 Act is to be treated as compensation and to be dealt with under Capital gains . The fact that there is no amendment carried out under section 10(37) of the 1961 Act will not change the position. Section 10 deals with deductions and sub-section (37) thereof deals with capital gains arising from transfer of agricultural land, it no where provides as to what is to be included under the head Capital gains . The argument raised is not well founded. 11. L ..... X X X X Extracts X X X X X X X X Extracts X X X X
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