Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI S. S. VISWANETHRA RAVI, JM
ORDER
PER D. KARUNAKARA RAO, AM:
This appeal is filed by the assessee against the order of CIT(A)-2, Aurangabad dated 01.05.2017 for the Assessment Year 2012-13.
The grounds raised by the assessee are as under :- “1) The Ld. AO erred in treating the amount of Rs.3,10,33,961/- received by me u/s 28 of Land Acquisition Act 1984, as interest instead of part and parcel of consideration. 1.1) As the prime asset does not fall under the category of capital asset, the Ld. AO (as well as Ld. CIT(A)) ought not to have levied tax on amount received by me u/s 28 of Land Acquisition Act 1984. 2) The Ld AO erred (Ld CIT(A) erred in confirming) in taxing the income which was effectively not received by the me. 3) The assessee craves the liberty to add, alter or amend any of the grounds of appeal or to take any fresh ground of appeal at the time of hearing.” The core issue relates to the taxation of the sum of Rs.3,10,33,961/-.
3. The relevant facts on the issue for adjudication include that the assessee had agricultural land, which was acquired by the Government in the year 1993. Assessee received compensation for the land, solatium, interest etc. In addition of other sums, the taxation on sum of Rs.3,10,33,960/- is the bone of contention during the assessment proceedings. Accepting the facts that the same sum at Rs.3,10,33,960/- is an interest receivable/received by the assessee under the provisions of section 28 of the Land Acquisition Act, 1984, the said amount was treated as taxable receipt by the Assessing Officer in the assessment. The contents of para 5 of the assessment is relevant in this regard. While taxing the said receipt, the Assessing Officer granted deduction u/s 57 of the Act at the rate of 50% instead of exemptive the entire amount in view of the legal precedent available at that point of time. The CIT(A) confirmed the same without appreciating the said judgments.
4. Aggrieved with the said decision of the CIT(A), the assessee is in appeal before the Tribunal with the above extracted grounds. 5. Before us, at the outset, ld. Counsel for the assessee brought our attention to the order of the Tribunal in the case of Dnyanoba Shajirao Jadhav vs. ITO vide for the assessment year 2011-12 dated 29.01.2018. Referring to the said judgment, in general, and the contents of para 10 of the said order of the Tribunal, in particular, ld. Counsel for the assessee read out the same and mentioned that so long as the interest amount attracts the provisions of section 28 of the Land Acquisition Act, 1984. For the sake of completeness, the contents of para 10 of the order of the Tribunal (supra) are extracted hereunder :- “10. The Commissioner of Income Tax (Appeals) while confirming the order of Assessing Officer has observed that the case of assessee is covered by the Hon’ble Apex Court in the case of Bikram Singh & Ors. Vs. Land Acquisition Collector & Ors. (supra) as the said judgment is delivered by Larger Bench and prevails over the decision rendered in the case of Commissioner of Income Tax Vs. Ghanshyam (HUF) (supra) which is though subsequent in time but is rendered by Division Bench. We do not concur with the findings of Commissioner of Income Tax (Appeals) to make the addition. Undisputedly, while rendering the decision in the case of Commissioner of Income Tax Vs. Ghanshyam (HUF) (supra) the judgment of Larger Bench in the case of Bikram Singh & Ors. Vs. Land Acquisition Collector & Ors. (supra) was not considered. However, we find that there is no conflict of law laid down in both the cases. The Hon’ble Supreme Court in the case of Commissioner of Income Tax Vs. Ghanshyam (HUF) (supra) has clearly marked the distinction between the interest received u/s. 23(1A) and 23(2) r.w.s. 28 of the L.A. Act vis-à-vis interest on delayed payment of compensation u/s. 34 of the L.A. Act. The Larger Bench of Hon’ble Supreme Court of India in the case of Bikram Singh & Ors. Vs. Land Acquisition Collector & Ors. (supra) has held that the interest received u/s. 34 of the Act on delayed payment of compensation is a revenue receipt and is exigible to tax. Both the judgments rendered by the Hon’ble Apex Court have held that payment of interest on delayed payment of compensation u/s. 34 of the L.A. Act are liable to tax under the provisions of Income Tax Act.”
6. From the above, it is evident that it is settled legal proposition at the level of the Tribunal, Pune Benches that the said receipts are not taxable as the same is covered by the provisions of section 28 of the Land Acquisition Act, 1984. The interest received u/s 28 of the said Act is not taxable. In our considered opinion, the Assessing Officer and the CIT(A) made an error in not complying with the judgement of the Hon’ble Supreme Court in the case of CIT vs. Ghanshyam (HUF), 315 ITR 01 (SC) and other decisions mentioned in para 10 of the order of the Tribunal in the case of Dnyanoba Shajirao Jadhav (supra). Accordingly, we direct the Assessing Officer to follow the decision of the Tribunal in the case of Dnyanoba Shajirao Jadhav (supra) as well as the Hon’ble Supreme Court’s judgement in the case of Ghanshyam (HUF) (supra). The Assessing Officer shall decide the issue after granting reasonable opportunity of being heard to the assessee during the remand proceedings and allow the claim after due verification of the calculation, figures and the applicability of the said decisions cited above (supra). Thus, the grounds raised by the assessee are allowed for statistical purposes.