SUDHAKAR PURUSHOTTAM BHALERAO,OSMANABAD vs. ITO WARD 1, LATUR, LATUR

ITA 2882/PUN/2026Status: DisposedITAT Pune25 September 2026AY 2020-217 pages
AI SummaryAllowed

What were the facts?

The assessee received enhanced compensation with interest on the compulsory acquisition of land. The Assessing Officer treated this interest as taxable income under Section 56(2)(viii) of the Income Tax Act, 1961. The assessee contended that it was a capital receipt and not taxable.

What did the Tribunal hold?

The Tribunal held that interest received on enhanced compensation under Section 28 of the Land Acquisition Act, 1894, partakes the character of compensation and is not taxable as 'interest' under Section 56(2)(viii). The Tribunal followed the decision of the Gujarat High Court in Movaliya Bhikhubhai Balabhaiv.Income-tax Officer-TDS-1-Surat.

What were the issues?

Whether interest received on enhanced compensation under the Land Acquisition Act is taxable as 'income from other sources' or is a capital receipt. Whether amendments to Section 145A and Section 56(2) affect the taxability of such interest.

Which sections of the Income-tax Act were involved?

Section 56(2)(viii),Section 28,Section 145A,Section 45(5),Section 10(37),Section 147,Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, PUNE BENCH “SMC”, PUNE

Before: SHRI Dr. DIPAK P. RIPOTE & SHRI VINAY BHAMORE

For Appellant: Shri Abhay Avachat
For Respondent: Shri Prashant Barate

PER Dr. DIPAK P. RIPOTE, A.M : This is an appeal filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi [Ld.CIT(A)], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act’) for AY 2020-21 on 29.01.2026, emanating from the Assessment Order u/s 147 r.w.s. 144B of the Act, dated 28.01.2025. 2. There was a delay of 77 days in filing of the appeal before this Tribunal. The assessee filed an affidavit explaining the reasons for delay. We have perused the affidavit and convinced that there was sufficient cause for delay. Substantial justice is more important than procedural delay. No assessee is going to gain by filing the appeal belatedly. Accordingly, delay condoned.

3.

The order continues below.

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