BALWANT SAINI,JIND vs. ITO WARD-1, JIND

The learned Departmental Representative (DR) strongly opposed the condonation of delay and submitted that the assessee has failed to demonstrate sufficient cause warranting such condonation.

We have considered the condonation application as well as the submissions of the learned DR. Upon perusal of the reasons stated therein, we are satisfied that the delay in filing the appeal has occurred due to reasonable and bona fide cause, which was beyond the control of the assessee. It is a settled position of law that a 2 liberal approach should be adopted while considering applications for condonation of delay, particularly when no mala fide can be attributed to the assessee. Accordingly, in the interest of substantial justice, we condone the delay of 29 days and admit the appeal for adjudication on merits.

In the present appeal Assessee has raised the following grounds:

The brief facts of the case are that the assessee is an individual engaged in agricultural activities. The case of the assessee was reopened under section 148 of the Act on the basis of information that the assessee had received interest of Rs.2,86,770/- from the Land Acquisition Officer, Hisar, which was reflected in Form 26AS . In response to the notice, the assessee filed his return of income declaring income of Rs.5,416/- under the head “income from other sources” and agricultural income of Rs.1,50,000/- .

1 During the course of assessment proceedings, the assessee contended that the amount reflected in Form 26AS was not actually received by him and further claimed that the same was not taxable. However, the Assessing Officer, relying upon the information available in Form 26AS and the provisions of section 56(2)(viii) read with section 145B(1) of the Act, held that the interest on compensation is taxable in the year of receipt and further noted that the assessee had claimed credit of TDS on the said amount. The Assessing Officer accordingly allowed deduction of 50% under section 57(iv) and added the balance amount of Rs.1,43,850/- to the income of the assessee .

Aggrieved by the assessment order, the assessee preferred an appeal before the Ld. CIT(A). The Ld. CIT(A), however, dismissed the appeal of the assessee. It was observed by the Ld. CIT(A) that despite opportunities, the assessee failed to substantiate his claim with cogent evidence and did not effectively pursue the appellate proceedings.

1 On merits, the Ld. CIT(A) upheld the action of the Assessing Officer by holding that the interest received on compensation or enhanced compensation is taxable under the head “income from other sources” in view of section 56(2)(viii) read with section 145B(1) of the Act and relying upon the decision of the Hon’ble Supreme Court in the case of Ghanshyam (HUF) and other judicial precedents. The Ld. CIT(A)

Against the order of the Ld. CIT(A) the assessee preferred an appeal before the Tribunal.

Before us, the Ld. AR reiterated the submissions made before the lower authorities and submitted that the addition has been made merely on the basis of Form 26AS without verifying the actual receipt of income. It was contended that the assessee has not received any compensation or interest thereon during the year under consideration and therefore the same cannot be brought to tax. It was further argued that the primary condition for taxing interest on enhanced compensation is actual receipt and in the absence of such receipt, no addition can be sustained. The Ld. AR also submitted that mere deduction of TDS cannot be treated as conclusive evidence of receipt of income.

Per contra, the Ld. DR strongly relied upon the orders of the lower authorities and submitted that the income is duly reflected in Form 26AS and the assessee has also claimed credit of TDS. Therefore, the assessee cannot be permitted to take a contradictory stand that no income has been received. It was further submitted that the issue is covered in favour of the Revenue and the addition has rightly been made and confirmed.

We have heard the rival submissions and perused the material available on record. It is an undisputed position that the addition in the present case has been made solely on the basis of information appearing in Form 26AS regarding interest on compensation allegedly paid by the Land Acquisition Officer. At the same time, the consistent stand of the assessee is that no such amount has actually been received by him. In our considered opinion, the taxability of interest on compensation or enhanced compensation under section 56(2)(viii) read with section 145B(1) of the Act is contingent upon the actual receipt of such income. Therefore, the foundational requirement for bringing such income to tax is the receipt thereof by the assessee.

1 In the present case, no independent verification appears to have been carried out by the Assessing Officer to ascertain whether the assessee has actually received the amount in question. Mere reflection of income in Form 26AS or deduction of TDS cannot be regarded as conclusive proof of receipt of income,

2

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on 22/04/2026 कृणव" सहाय लिलत कुमार (KRINWANT SAHAY) (LALIET KUMAR) लेखा सद"/ ACCOUNTANT MEMBER "ाियक सद" /JUDICIAL MEMBER AG आदेश की "ितिलिप अ"ेिषत/ Copy of the order forwarded to : 1. अपीलाथ"/ The Appellant

""थ"/ The Respondent 3. आयकर आयु"/ CIT 4. आयकर आयु" (अपील)/ The CIT(A) 5. िवभागीय "ितिनिध, आयकर अपीलीय आिधकरण, च"ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड" फाईल/ Guard File