Characterization of receipt - interest received by the assessee ...

Income Tax

April 10, 2024

Characterization of receipt - interest received by the assessee u/s 28 and 34 of the Land Acquisition Act, 1894 - The Delhi High Court, in a case concerning the taxability of interest earned on compensation or enhanced compensation under the Land Acquisition Act, 1894, examined the provisions of the Income Tax Act, 1961, and relevant judicial precedents. - The court also examines the applicability of Section 145-B of the Income Tax Act, which deems interest on compensation or enhanced compensation as income of the year in which it is received, subject to tax. - Considering the legislative intent behind the 2009 amendment and the clear language of the statute, the court concludes that interest, whether on compensation or enhanced compensation, should be considered income from other sources and is subject to tax.

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