PADMAKAR WAMANRAO HONERAO,,LATUR vs. INCOME-TAX OFFICER ,,

This bunch of appeals relating to connected assessee on similar issues were heard together and are being disposed of by this consolidated order for the sake of convenience. However, in order to adjudicate the issues, we make reference to the facts and issues in ITA No.2580/PUN/2016.

The present appeals were filed after the delay of 112 days. The assessee has filed condonation application in this regard and has pleaded that because of wrong advice of consultant, appeals could not be filed in time. However, he took advice from another consultant and has filed the present appeals. In the totality of the above said facts and circumstances, we find merit in the plea of assessee and the delay in filing the present set of appeals is condoned and we proceed to decide the present appeals after hearing both the learned Authorized Representatives.

The learned Authorized Representative for the assessee pointed out that the only issue which needs to be decided in the present set of appeals is against chargeability of interest received under the Land Acquisition Act (in short ‘LAC Act’). The learned Authorized Representative for the assessee in this regard has pointed out that the award letter itself talks of solatium to be paid @ 30% and the interest calculated under section 28 of LAC Act, which totals to a larger amount but during the year under consideration, the assessee i.e. Satish Wamanrao Honerao has only received ₹ 31,48,770/-. He stressed that the said interest which was the payment under section 28 of LAC Act is to be treated as part of compensation and in line with the ratio laid down by Hon'ble Supreme Court in CIT Vs. Ghanshyam (HUF) (2009) 315 ITR 1 (SC) and also Pune Bench of Tribunal in Shri Madhav Pandharinath Kande Vs. ITO in ITA No.2584/PUN/2016, relating to assessment year 2013-14, order dated 01.07.2019.

The learned Departmental Representative for the Revenue on the other hand, pointed out that the issue stands covered against the assessee by the decision of the Hon'ble Supreme Court in CIT Vs. Chet Ram (HUF) in Civil Appeal No.13053/2017 & Ors. Judgment dated 12.09.2017 and the amount was taxable in the hands of assessee.

The learned Authorized Representative for the assessee in rejoinder pointed out that the Hon’ble Apex Court in CIT Vs. Chet Ram (HUF) (supra) talks of the year of taxability, which is not in dispute. The dispute in the present appeal is whether interest which was received under section 28 of LAC Act is to be treated as part of compensation or not?

We have heard the rival contentions and perused the record. The limited issue which arises in this bunch of appeals with lead appeal in Satish Wamanrao Honerao is the chargeability of interest received by assessee under section 28 of LAC Act on account of compulsory acquisition of land. The contention of assessee in this regard is that the said amount is capital receipt and not chargeable to tax. However, the Hon'ble Supreme Court in CIT Vs. Ghanshyam (HUF) (supra) and in other cases had held that interest awarded under section 28 of LAC Act was in the nature of solatium and was an integral part of compensation. It was further held that interest received under section 34 of LAC Act was on account of delayed payment of compensation and was revenue receipt. Though the amounts received under sections 28 and 34 of LAC Act are termed as interest but two stands at different pedestal in so far as the Income Tax Act is concerned. Such is the proposition laid down by Pune Bench of Tribunal in Shri Madhav Pandharinath Kande Vs. ITO (supra). The Hon’ble Apex Court in CIT Vs. Chet Ram (HUF) talks of the year of taxability which is not in dispute. In the totality of the same, we allow the plea of

The facts and issues in ITA Nos.2581 to 2583/PUN/2016 are similar to the facts and issues in ITA No.2580/PUN/2016 and our decision in ITA No.2580/PUN/2016 shall apply mutatis mutandis to ITA Nos.2581 to 2583/PUN/2016.

In the result, all the appeals of assessee are allowed.