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TMI Blog2024 (5) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... aining addition of Rs. 1,80,94,690/- as interest income when such additional compensation and interest accrued thereon has not attained its finality and its receipt is contingent in the hands of the Appellant. 3. The learned Commissionaire of Income Tax (A) erred in law and on facts in sustaining / confirming addition of Rs. 14,84,463/- as interest income, whereas the said income pertains to Appellant's Sister as her share of income. 4. The learned Commissionaire of Income Tax (A) erred in law and on facts in confirming taxation of interest in the hands of the Appellant in view of the Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. 4. Mr. Nayak vehemently argued that both the learned lower authorities have rightly rejected the assessee's claim of assessment of interest income of Rs. 1,80,94,690/- received as a consequence to the learned Reference Court's award enhancing land acquisition compensation as well as latter issue of addition of Rs. 14,84,463/-; respectively. He further quoted the statutory amendments in section 56(2)(viii) r.w.s. 57(iv) r.w.s. 145B(i) inserted by the Finance Act, 2009 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad income from "Other" sources under section 56(2)(viii) of the Act. The assessee's case before us is that such an interest income is part of the land acquisition compensation itself and not taxable, therefore, in light of Ghanshyam(HUF) Vs. CIT [2009] 315 ITR 1 (SC). Learned counsel thereafter quoted [2016] 138 DTR 229 (Guj) Moraliya B Balashai Vs. ITO and [2019] 471 ITR 169 (Bom), Ruesh R.Shah Vs. Union of India and vehemently contended that the learned lower authorities action under challenge is hardly sustainable in law. 4. Mr.Jasnani on the other hand has quoted this tribunal's co-ordinate bench's order in Basweshwar Mallikarjun Bidwe Vs. ITO in ITA No.1012/PUN/2017 dated on 05.10.2020 in department's favour as under : "3. Succinctly, the facts of the case are that the assessee filed his return declaring total income of Rs. 42,370/-. He received enhanced compensation at Rs. 38,19,709/- and interest u/s. 28 of the LAA amounting to Rs. 68,32,020/- on compulsory acquisition from The Special Land Acquisition Officer (MIW), Latur against the land situated at Village Khadgaon, Tq. Latur. In the column of exempt income in the return, the assessee showed figures of total interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of the LAA came up for consideration before Hon'ble Punjab & Haryana High Court in the case of Manjet Singh (HUF) Karta Manjeet Singh Vs. Union of India (2016) 237 Taxman 0116 (P&H). It noted another judgment of three Judges of the Hon'ble Apex Court in Bikram Singh vs. Land Acquisition Collector, (1997) 224 ITR 551(SC) following Dr. Shamlal Narula vs. CIT (1964) 53 ITR 151 (SC) holding that interest under Section 28 of the 1894 Act was a revenue receipt and is taxable. After considering all the available relevant material including the judgment in Ghanshyam (HUF) (Supra) and also the statutory amendments carried out w.e.f. A.Y. 2010-11, the Hon'ble High Court, vide its judgment dated 14.01.2014, decided this issue in favour of the Revenue by holding that interest u/s. 28 of LAA was chargeable to tax u/s. 56(2)(viii) of the Act. The SLP filed against the judgment in the case of Manjet Singh Vs. Union of India has since been dismissed by the Hon'ble Supreme Court on 18-12-2014 (SLP No. 34642 of 2014) holdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 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/s. 28 is not by way of any charge on compensation determined u/s. 23(1). We, therefore, with respect, follow the larger Bench judgment of the Hon'ble Apex Court". Thus it is plentifully lucid that the Hon'ble jurisdictional High Court has categorically held that interest u/s 28 of the Land Acquisition Act is chargeable to tax. 7. The ld. AR submitted that the Hon'ble jurisdictional High Curt has not correctly appreciated the legal position inasmuch as the decision in the case of Ghanshyam (supra) was binding and ought to have been followed. He unsuccessfully tried to convince the Tribunal that the decision rendered by the Hon'ble Bombay High Court should not be preferred over certain other decisions in favour of the assessee. We find that in certain decisions, the issue has been decided in assessee's favour. Notwithstanding any contrary view expressed by a non-jurisdictional Hon'ble High Court, the Tribunal, being an authority inferior in hierarchy to its jurisdictional High Court, is bound by the verdic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. Ghanshyam (HUF) in order to ascertain whether the interest given under the said provision amounts to compensation or not. It is abundantly clear that the judgment in the case of Hari Singh and others (supra) is based an altogether different factual matrix in which the question was as to whether it was the Collector or the AO who will decide as to whether any tax was payable on compensation/enhanced compensation. This issue came to be decided by Hon'ble Supreme Court by holding that the AO was the competent authority. There is no adjudication on the point as to whether interest u/s. 28 of the Land Acquisition Act is chargeable to tax separately or part of enhanced compensation. There is a simple direction to the AO to consider this aspect of the matter. 10. In view of the foregoing discussion, it is manifest that the judgment of the Hon'ble jurisdictional High Court holding that interest u/s. 28 under the LAA is chargeable to tax, is intact and has not been disturbed in any manner by the Hon'ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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