CHANDER KANTA,PANCHKULA vs. THE INCOME TAX OFFICER , NFAC

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ITA 690/CHANDI/2026Status: DisposedITAT Chandigarh08 July 2026AY 2015-162 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the taxability of interest on enhanced compensation is a debatable issue with divergent judicial views. Therefore, the assessee cannot be penalized for this issue.

What were the facts?

The assessee received interest on enhanced compensation for land, which was claimed as exempt. The AO reopened the assessment and added 50% of the amount to the income, levying a penalty due to no response from the assessee. The CIT(A) confirmed the penalty.

What were the issues?

Whether penalty can be levied on a debatable issue regarding the taxability of interest on enhanced compensation.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, CHANDIGARH

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, CHANDIGARH HYBRID HEARING HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकरअपीलसं./ ITA No.690/CHANDI/2026 (िनधा�रणवष� / Assessment Year: 2015-16) Chander Kanta ITO Village – Nangal Sodhian NaFAC बनाम/ Vs. Himshika Colony Pinjore, Haryana – 134104 �ायीलेखासं./जीआइआरसं./PAN/GIR No. BSJPK-6949-N (अपीलाथ�/Appellant) : (��थ� / Respondent) अपीलाथ�कीओरसे/ Appellant by : Sh. Lovish Juneja (Advocate) (Virtual) – Ld. AR ��थ�कीओरसे/Respondent by : Sh. Vivek Vardhan (Addl. CIT) - Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 08-07-2026 घोषणाकीतारीख /Date of Pronouncement 09-07-2026 : आदेश / O R D E R 1. Aforesaid appeal by assessee for Assessment Year (AY) 2015- 16 arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 18.01.2026 confirming penalty of Rs.1,07,421/- as levied by Ld. AO vide order dated 11.03.2025. From case records, it emerges that the assessee received interest on enhanced compensation on land for Rs.6,89,347/ which was claimed to be exempt. However, the assessment was reopened and 50% of the said amount was added to the income of the assessee. Consequently, impugned penalty was levied by Ld. AO for

want of any response from the assessee. The Ld. CIT(A) confirmed the penalty for the same very reasons. Aggrieved, the assessee is in further appeal before Tribunal. 2. I am of the considered opinion that the impugned issue of taxability of interest on enhanced compensation of land was debatable issue and divergent views have been expressed in various judicial decisions. Therefore, the assessee could not be saddled with penalty for this issue. Hence, I delete the impugned penalty. 3. The appeal stand allowed. Order pronounced on 09th July, 2026.

-Sd- (MANOJ KUMAR AGGARWAL) ACCOUNTANT MEMBER AS Dated: 09/07/2026 आदेश की �ितिलिप अ�ेिषत /Copy of the Order forwarded to : 1. अपीलाथ�/Appellant 2. ��थ�/Respondent 3. आयकरआयु�/CIT 4. िवभागीय�ितिनिध/DR 5. गाड�फाईल/GF

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