SH. SURESH PAL,YAMUNA NAGAR vs. ITO, WARD 5, YAMUNA NAGAR

Order \n15\nThese appeals are filed by the different assessee against the separate\norders passed by the various CIT(A)'s/ NFAC Ld. Commissioner of Income-tax\n(Appeals), National Faceless Appeal Centre, Delhi against the common legal\n16\nground mentioned in the respective appeals. Since all the appeals were\nheard together, they are being disposed of by this consolidated order for the\nsake of convenience and brevity.\n2. It has been brought to our notice that, in certain appeals, there is a\ndelay in filing the same before the Tribunal as pointed out by the Registry.\nConsidering that the issue involved is purely legal in nature, and respectfully\nfollowing the ratio laid down by the Hon'ble Supreme Court in Collector,\nLand Acquisition v. Mst. Katiji& Others [(1987) 167 ITR 471 (SC)]*, which\nemphasizes that substantial justice should prevail over technical\nconsiderations, we condone the delay in filing these appeals.\n3. We shall take appeal of the assessee in for A.Y\n2018-19 as a lead case for discussion wherein assessee has raised the\nfollowing effective grounds:\n1.\nThat having regard to the facts and circumstances of the case\nand in law, the Ld. Commissioner of Income Tax (Appeals) has erred both\nin law and on facts in confirming the addition of Rs.34,65,610/- made by\nthe Ld. Assessing Officer under the head \"Income from other sources\" u/s\n56(viii) of the Income-tax Act 1961 (the Act) on account of interest u/s 28\nof the Land Acquisition Act 1894 of Rs.34,65,610/-received by the\nappellant during the year, which was part of enhanced compensation\nfor compulsory acquisition of his agricultural land exempt u/s 10(37) of the\nIncome Tax Act 1961.\n2.\nWithout prejudice to the above, even if for arguments sake it is\nassumed that interest u/s 28 of the Land Acquisition Act received by the\nappellant is assessable as 'Income from other sources' u/s 56(2)(viii) of the\nAct, the Ld. Assessing Officer as well as Ld. Commissioner of Income Tax\n(Appeals) erred in not allowing statutory deduction u/s 57(iv) of a sum\nequal to fifty percent of the said amount of interest.\n3.\nThat having regard to the facts and circumstances of the case\nand in law, the Ld. Commissioner of Income Tax (Appeals) has erred both\nin law and on facts in confirming the addition of Rs.34,65,610/- made by\nthe Ld. Assessing Officer under the head \"Income from other sources\" u/s\n56(viii) of the Income-tax Act referring to the provisions of section 199 of\nthe Act, which is not relevant to determine nature of receipt of interest\nu/s 28 of the Land Acquisition Act 1894 as to whether it is a capital receipt\nforming part of enhanced compensation or a revenue receipt\nchargeable u/s 56(viii) of the Act.\n4.\nBriefly the facts of the case are that the assessee, Shri Ajay Kumar, filed\nhis original return of income for A.Y. 2018-19 on 29.09.2018 declaring total\nincome of Rs.3,51,090/-, which was processed u/s 143(1). The case was\nsubsequently selected for Complete Scrutiny under the e-Assessment\nScheme, 2019 on two issues, namely, (i) reduction of income in the revised\nreturn coupled with claim of refund, and (ii) mismatch between\ninterest/winnings reported in Form 26AS and the income shown under\n\"Income from Other Sources\" in the return. Statutory notices u/s 143(2) and\n142(1) were issued calling for details.\n5. In response, the assessee submitted that he had received enhanced\ncompensation of Rs.56,34,922/- from the Land Acquisition Officer, Hisar\n(HUDA), Haryana, pursuant to compulsory acquisition of agricultural land. It\nwas explained that the original award was passed on 31.03.2008,\nsubsequently enhanced by the Additional District Judge on 24.12.2013 and\nfurther enhanced by the Hon'ble High Court on 22.07.2015. During the\nrelevant previous year, the assessee received enhanced compensation\nalong with interest of Rs.34,65,610/-, on which TDS of Rs.3,46,561/- was\ndeducted by the Land Acquisition Officer u/s 194A.\n6. It was further stated that in the original return the assessee had\ninadvertently offered the said interest amount to tax, however, upon realising\nthat the interest received was interest u/s 28 of the Land Acquisition Act,\n1894, being part of compensation and exempt u/s 10(37) of the Income-tax\nAct, he revised the return and withdrew the interest income while claiming\nrefund of TDS. The assessee relied on the nature of interest u/s 28 being\nintegral to compensation. During the course of assessment proceedings, the\nAO examined the submissions and found that, although the assessee claimed\nexemption on the interest component in the revised return, he continued to\nclaim credit for TDS deducted thereon, which was duly reflected in Form\n26AS. A show-cause notice dated 10.12.2020 was issued, proposing to treat\n17\nthe interest as taxable u/s 56(2)(viii) read with section 145B(1). In reply, the\nassessee reiterated that interest u/s 28 forms part of compensation and is\nexempt. The AO, however, held that section 10(37) applies only to capital\ngains arising from transfer of agricultural land, and not to interest on delayed\npayment; that interest received on enhanced compensation is deemed to\nbe taxable u/s 56(2)(viii) in the year of receipt; and that the assessee could\nnot reduce income in a revised return while simultaneously claiming full TDS\ncredit u/s 199. Accordingly, the AO held the interest of Rs.34,65,610/- to be\ntaxable, added the same to the returned income, determined assessed\nincome at Rs.38,16,700/-, and initiated penalty proceedings u/s 270A for\nunder-reporting of income.\n7. Feeling aggrieved by the order passed by the Ld. Assessing Officer the\nassessee preferred the appeal before the Ld. CIT(A) / NFAC. The Ld. CIT(A)\nconsidered the assessment order, the written submissions of the assessee, and\nthe material available on record. At the outset, the Ld. CIT(A) observed that\nthe Assessing Officer had made an addition of Rs.34,65,610/- on account of\ninterest on enhanced compensation received by the assessee in respect of\ncompulsory acquisition of agricultural land, and that the assessee had\nclaimed TDS credit on such interest while not offering the corresponding\nincome in the revised return. It was noted that the assessee had initially filed\nthe return, declaring interest income. Subsequently, it revised the return to\nwithdraw the same on the grounds that interest received under Section 28 of\nthe Land Acquisition Act forms part of compensation and is exempt under\nSection 10(37). The Ld. CIT(A) recorded that the Assessing Officer had\nexamined this claim and determined that the assessee's reliance on section\n10(37) was misplaced, as that provision applies to capital gains arising from\ncompulsory acquisition of agricultural land and does not extend to interest\nreceived on delayed payment of compensation.\n18\n8. The appellate authority / CIT(A) further concurred with the AO's\nanalysis that section 145B(1) read with section 56(2)(viii) provides a specific\nstatutory mandate to treat interest received on compensation or enhanced\ncompensation as taxable in the year of receipt under the head income from\nother sources. The Ld. CIT(A) emphasized that interest under section 28 and\ninterest under section 34 were distinct in nature, and the AO had already\nreproduced judicial interpretation explaining that interest under section 28\nmay partake the character of compensation, while interest under section 34\ncompensates for delay; however, in view of the express provisions of section\n145B and section 56, such interest is an enhanced compensation under\nsection 28 of the LA Act is chargeable to tax upon receipt basis. It was\nobserved that the assessee's revised return disclosed a lower income while\nclaiming refund based on the TDS deducted, which was impermissible in light\nof section 199, which requires that for claiming TDS credit, the corresponding\nincome must be offered to tax.\n9. The Ld. CIT(A) also took note that although the assessee contended\nthat the land acquired was agricultural and the interest was part of\ncompensation exempt u/s 10(37), the assessee had not offered any capital\ngains computation in either the original or revised return to demonstrate the\napplicability of section 10(37). It was held that exemption under section\n10(37) cannot be presumed and must be reflected through proper\ncomputation, which was lacking in the present case. The Ld. CIT(A) also\nechoed the AO's view that filing a revised return to exclude the interest\nincome while retaining TDS.\n10. Feeling aggrieved by the order passed by the Ld. CIT(A) the assessee is\nin appeal before us on the grounds mentioned hereinabove.\n11. The Id. AR, Shri Suraj Bhan Nain, Advocatethereafter, placing reliance\non the scheme of the Land Acquisition Act and the judicial position, invited\n19\nour attention to the judgment of the Hon'ble Supreme Court in CIT vs.\nGhanshyam (HUF) [2009] 315 ITR 1 (SC) = 182 Taxman 368 (SC). It was\nsubmitted that the Hon'ble Supreme Court, after dealing with the statutory\nframework of the Land Acquisition Act, particularly Sections 23(1A), 23(2), 28\nand 34, has categorically held that interest awarded under Section 28 forms\npart and parcel of compensation, whereas interest awarded under Section\n34 is in the nature of interest simplicitor, merely compensating for delay in\npayment.\n12. Our attention was specifically drawn to paragraphs 30 to 36 of the said\njudgment. The Id. AR emphasized that the Hon'ble Supreme Court, in\nunequivocal terms, held that the interest awarded u/s 28 has the same colour\nand character as compensation and, therefore, is liable to be treated as part\nof the enhanced compensation for income-tax purposes, whereas interest\nu/s 34 stands on a distinct footing being compensatory in nature on account\nof delay in making payment. It was stressed that the legislative intent behind\nSection 28 is to provide recompense/restitution for the deprivation of property\nand, therefore, it assumes the character of compensation in entirety.\n13. It was further argued that the Apex Court clarified that the entire\nenhanced compensation, including interest u/s 28, becomes taxable in the\nyear of receipt under the provisions of section 45(5) of the Income-tax Act. In\ncontrast, interest u/s 34 is to be taxed as income from other sources. Thus, the\nId. AR submitted that the interest component in the present case-being\ninterest awarded on enhanced compensation under Section 28 of the Land\nAcquisition Act—is to be treated as compensation and not as interest\nsimplicitor.\n14.\nThe Id. AR also pointed out that the Hon'ble Supreme Court\ndistinguished the statutory scheme wherein Section 28 of the LA Act relates to\n20\ncompensation determination, while Section 34 of the LAAct falls within the\nrealm of payment mechanism. Therefore, interest awarded u/s 28 is\nintrinsically linked with the judicial determination of compensation, and is\ninseparable from the award, thereby qualifying as part of the compensation\nitself. In CIT vs. Ghanshyam (HUF) [2009] 315 ITR 1 (SC) = 182 Taxman 368\n(SC)it5 was held as under:-\n\"30. For the said purpose, the cost of acquisition is to be taken as Nil [See:\nExplanation (i)]. Also, where the enhanced compensation is received by any\nperson, other than the transferor by reason of the death of the transferor or for\nany reason, the amount of such additional compensation or additional\nconsideration is to be deemed to be the income of the recipient of the\nprevious year in which such amount is received by him.\n31. Two aspects need to be highlighted. Firstly, section 45(5) of the 1961 Act,\ndeals with transfer(s) by way of compulsory acquisition and not by way of\ntransfers by way of sales etc., covered by section 45(1) of the 1961 Act.\nSecondly, section 45(5) of the 1961 Act talks about enhanced compensation\nor consideration which in terms of L.A. Act, 1894 results in payment of\nadditional compensation.\n32. The issue to be decided before us what is the meaning of the words\n\"enhanced compensation/consideration\" in section 45(5)(b) of the 1961 Act?\nWill it cover \"interest\"? These questions also bring in the concept of the year of\ntaxability.\n33. It is to answer the above questions that we have analysed the provisions of\nsections 23, 23(1A), 23(2), 28 and 34 of the 1894 Act. As discussed hereinabove,\nsection 23(1A) provides for additional amount. It takes care of increase in the\nvalue at the rate of 12 per cent per annum. Similarly, under section 23(2) of the\n1894 Act, there is a provision for solatium which also represents part of\nenhanced compensation. Similarly, section 28 empowers the Court in its\ndiscretion to award interest on the excess amount of compensation over and\nabove what is awarded by the Collector. It includes additional amount under\nsection 23(1 A) and solatium under section 23(2) of the said Act. Section 28 of\nthe 1894 Act applies only in respect of the excess amount determined by the\nCourt after reference under section 18 of the 1894 Act. It depends upon the\nclaim, unlike interest under section 34 which depends on undue delay in\nmaking the award. It is true that \"interest\" is not compensation. It is equally true\nthat section 45(5) of the 1961 Act, refers to compensation. But as discussed\nhereinabove, we have to go by the provisions of the 1894 Act, which awards\n\"interest\" both as an accretion in the value of the lands acquired and interest\nfor undue delay. Interest under section 28 unlike interest under section 34 is an\naccretion to the value, hence it is a part of enhanced compensation or\nconsideration which is not the case with interest under section 34 of the 1894\nAct. So also additional amount under section 23(1A) and solatium under\nsection 23(2) of the 1961 Act forms part of enhanced compensation under\nsection 45(5)(b) of the 1961 Act. In fact, what we have stated hereinabove is\nreinforced by the newly inserted clause (c) in section 45(5) by the Finance Act,\n2003 with effect from 1-4-2004. This newly added clause envisages a situation\nwhere in the assessment for any year,-\n- the capital gain arising from the transfer of a capital asset is\n21\ncomputed by taking the -\n- compensation or consideration referred to in clause (a) of section\n45(5) or, as the case may be,\n- enhanced compensation or consideration referred to in clause (b)\nof section 45(5), and subsequently such compensation or\nconsideration is reduced by any Court, Tribunal or other authority.\n34. In such a situation, such assessed capital gain of that year shall be\nrecomputed by taking the compensation or consideration as so reduced by\nsuch Court, Tribunal or other authority to be the full value of the\nconsideration. For giving effect to such recomputation, the provisions of the\nnewly inserted (with effect from 1-4-2004) section 155(16) by the Finance Act,\n2003 (32 of 2003), have been enacted.\n35. It was urged on behalf of the assessee that section 45(5)(b) of the 1961\nAct deals only with re-working, its object is not to convert the amount of\nenhanced compensation into deemed income on receipt. We find no merit\nin this argument. The scheme of section 45(5) of the 1961 Act was inserted\nwith effect from 1-4-1988 as an overriding provision. As stated above,\ncompensation under the L.A. Act, 1894, arises and is payable in multiple\nstages which does not happen in cases of transfers by sale etc. Hence, the\nlegislature had to step in and say that as and when the assessee-claimant is\nin receipt of enhanced compensation it shall be treated as \"deemed\nincome\" and taxed on receipt basis. Our above understanding is supported\nby insertion of clause (c) in section 45(5) with effect from 1-4-2004 and\nsection 155(16) which refers to a situation of a subsequent reduction by the\nCourt, Tribunal or other authority and recomputation/amendment of the\nassessment order. Section 45(5) read as a whole (including clause \"c\") not\nonly deals with reworking as urged on behalf of the assessee but also with the\nchange in the full value of the consideration (computation) and since the\nenhanced compensation/consideration (including interest under section 28\nof the 1894 Act) becomes payable/ paid under 1894 Act at different stages,\nthe receipt of such enhanced compensation/consideration is to be taxed in\nthe year of receipt subject to adjustment, if any, under section 155(16) of the\n1961 Act, later on. Hence, the year in which enhanced compensation is\nreceived is the year of taxability. Consequently, even in cases where\npending appeal, the Court/Tribunal/Authority before which appeal is\npending, permits the claimant to withdraw against security or otherwise the\nenhanced compensation (which is in dispute), the same is liable to be taxed\nunder section 45(5) of the 1961 Act. This is the scheme of section 45(5) and\nsection 155(16) of the 1961 Act. We may clarify that even before the insertion\nof section 45(5)(c) and section 155(16) with effect from 1-4-2004, the receipt\nof enhanced compensation under section 45(5)(b) was taxable in the year\nof receipt which is only reinforced by insertion of clause (c) because the right\nto receive payment under the 1894 Act is not in doubt. It is important to note\nthat compensation, including enhanced compensation/consideration under\nthe 1894 Act, is based on the full value of property as on date of notification\nunder section 4 of that Act. When the Court/Tribunal directs payment of\nenhanced compensation under section 23(1A), or section 23(2) or under\nsection 28 of the 1894 Act it is on the basis that award of Collector or the\nCourt, under reference, has not compensated the owner for the full value of\nthe property as on date of notification.\n36. Having settled the controversy going on for last two decades, we are of\nthe view that in this batch of cases which relate back to assessment years\n1991-92 and 1992-93, possibly the proceedings under the 1894\nAct have ended. In number of cases we find that proceedings under the 1894\nAct have been concluded and taxes have been paid. Therefore, by this\njudgment we have settled the law but we direct that since matters are\ndecade old and since we are not aware of what has happened in Land\nAcquisition Act proceedings in pending appeals, the recomputation on the\nbasis of our judgment herein, particularly in the context of type of interest\nunder section 28 vis-a-vis interest under section 34, additional compensation\nunder section 23(1A) and solatium under section 23(2) of the 1894 Act, would\nbe extremely difficult after all these years, will not be done.\n15.\nThe Id. AR submitted that the sum and substance of the judgment of\nthe Hon'ble Supreme Court in Ghanshyam (HUF) (supra) is that interest\nawarded on enhanced compensation—irrespective of whether it is\ndescribed as interest or solatium—forms an integral part of the compensation\nand is, therefore, liable to be taxed under section 45(5)(b) of the Income-tax\nAct, 1961 (“the Act”). It was further submitted that the said decision was\ndelivered by the Hon'ble Supreme Court on 16.07.2009.\nThe decision of the Hon'ble Supreme Court in the case of 'Ghanshyam' was\nlater on followed in the case of ‘CIT, Rajkot vs Govindbhai Mamalya' [2014]\n52 taxmann.com 270 (SC).\n\"6. In the present case, the admitted facts are that the property in question\nwhich was acquired by the Government, came to the respondents on\ninheritance from their father i.e. by the operation of law. Furthermore, even\nthe income which is earned in the form of interest is not because of any\nbusiness venture of the three assesseesbut it is the result of the act of the\nGovernment in compulsorily acquiring the said land. In these circumstances,\nthe case is squarely covered by the ratio of the judgment laid down in Meera\n& Co. (supra) inasmuch as it is not a case where any \"Association of Persons\"\nwas formed by volition of the parties for the purpose of generation of\nincome. This basic test to determine the status of AoP is absent in the present\ncase.\n7. Insofar as the second question is concerned, that is also covered by\nanother judgment of this Court in CIT v. Ghanshyam (HUF) [2009] 8 SCC 412,\nalbeit, in favour of the Revenue. In that case, the court drew distinction\nbetween the \"interest\" earned under Section 28 of the Land Acquisition Act\nand the \"interest\" which is under Section 34 of the said Act. The Court clarified\nthat whereas compensation given to the assessee of the land acquired\nwould be 'income', the enhanced compensation/consideration becomes\nincome by virtue of Section 45(5)(b) of the Income Tax Act. The question was\nwhether it will cover \"interest\" and if so, what would be the year of taxability.\nThe position in this respect is explained in paras 49 and 50 of the judgment\nwhich make the following reading:\n\"49. As discussed hereinabove, Section 23(1-A) provides for additional\namount. It takes care of the increase in the value at the rate of 12% per\n23\nannum. Similarly, under Section 23(2) of the 1894 Act there is a provision for\nsolatium which also represents part of the enhanced compensation. Similarly,\nSection 28 empowers the court in its discretion to award interest on the\nexcess amount of compensation over and above what is awarded by the\nCollector. It includes additional amount under Section 23(1-A) and solatium\nunder Section 23(2) of the said Act. Section 28 of the 1894 Act applies only in\nrespect of the excess amount determined by the court after reference under\nSection 18 of the 1894 Act. It depends upon the claim, unlike interest under\nsection 34 which depends on undue delay in making the award.\n50. It is true that \"interest\" is not compensation. It is equally true that Section\n45(5) of the 1961 Act refers to compensation. But as discussed hereinabove,\nwe have to go by the provisions of the 1894 Act which awards \"interest\" both\nas an accretion in the value of the lands acquired and interest for undue\ndelay. Interest under Section 28 unlike interest under Section 34 is an\naccretion to the value, hence it is a part of enhanced compensation or\nconsideration which is not the case with interest under Section 34 of the 1894\nAct. So also additional amount under Section 23 (1-A) and solatium under\nSection 23(2) of the 1961 Act forms part of enhanced compensation under\nSection 45(5)(b) of the 1961 Act.\n8. It is clear from the above that whereas interest under Section 34 is not\ntreated as a part of income subject to tax, the interest earned under Section\n28, which is on enhanced compensation, is treated as a accretion to the\nvalue and therefore, part of the enhanced compensation or consideration\nmaking it exigible to tax. After holding that interest on enhanced\ncompensation under Section 28 of 1894 Act is taxable, the Court dealt with\nthe other aspect namely, the year of tax and answered this question by\nholding that it has to be tested on receipt basis, which means it would be\ntaxed in the year in which it is received. It would mean that converse position\ni.e. spread over of this interest on accrual basis is not permissible. Here again,\nwe would like to reproduce the discussion contained in paras 53 and 54\nwhich gives the rational in coming to the said conclusion. Paras 53 and 54\nread as under:\n\"53. The scheme of Section 45(5) of the 1961 Act was inserted w.e.f. 1-4-1988\nas an overriding provision. As stated above, compensation under the L.A.Act,\n1894, arises and is payable in multiple stages which does not happen in\ncases of transfers by sale, etc. Hence, the legislature had to step in and say\nthat as and when the assessee claimant is in receipt of enhanced\ncompensation it shall be treated as \"deemed income\" and taxed on receipt\nbasis. Our above understanding is supported by insertion of clause (c) in\nSection 45(5) w.e.f. 1-4-2004 and Section 155(16) which refers to a situation of\na subsequent reduction by the court, tribunal or other authority and\nrecomputation/ amendment of the assessment order.\n54. Section 45 (5) read as a whole [including clause (c)] not only deals with\nreworking as urged on behalf of the assessee but also with the change in the\nfull value of the consideration (computation) and since the enhanced\ncompensation/consideration (including interest under Section 28 of the 1894\nAct) becomes payable/ paid under the 1894 Act at different stages, the\nreceipt of such enhanced compensation/ consideration is to be taxed in the\nyear of receipt subject to adjustment, if any, under Section 155(16) of the\n1961 Act, later on. Hence, the year in which enhanced compensation is\nreceived is the year of taxability. Consequently, even in cases where\npending appeal, the court/tribunal/authority before which appeal is\npending, permits the claimant to withdraw against security or otherwise the\n24\n25\nenhanced compensation (which is in dispute), the same is liable to be taxed\nunder Section 45(5) of the 1961 Act. This is the scheme of Section 45(5) and\nSection 155(16) of the 1961 Act. We may clarify that even before the insertion\nof Section 45(5)(c) and Section 155(16) w.e.f. 1-4-2004, the receipt of\nenhanced compensation under Section 45(5)(b) was taxable in the year of\nreceipt which is only reinforced by insertion of clause (c) because the right to\nreceive payment under the 1894 Act is not in doubt.\"\n16.\nThe Id. AR further submitted that the aforesaid legal position has\nsubsequently been reaffirmed by the Hon'ble Supreme Court in Chet Ram\n(supra). Our attention was also invited to page 265 of the paper book, which\ncontains the judgment of the Hon'ble Punjab & Haryana High Court in\nHaryana State Industrial Development Corporation Ltd. (CR No. 2509 of 2012-\nO&M) vs. Savitri Devi. Referring to page 275 of the paper book, it was pointed\nout that the Hon'ble High Court, vide judgment dated 29.11.2013, expressly\ndirected the authorities to follow the ratio laid down by the Hon'ble Supreme\nCourt in Ghanshyam (HUF) (supra), by observing as under:\n\"Admittedly, in the instant case the land was agricultural land and\nenhanced compensation and interest was awarded under Section 28. Thus,\nin view of specific finding of Hon'ble Supreme Court in Ghanshyam's case\n(supra) that amount awarded under Section 28 of the Land Acquisition Act is\naccretion in value of land and interest therein forms part of compensation;\nincome tax cannot be deducted at source since land acquired is\nagricultural land.\nIn view of above, I do not find any illegality or perversity in the impugned\norder.\"\n17.\nThe Id. AR further submitted that against the judgment of the Hon'ble\nPunjab & Haryana High Court in the case of Haryana State Industrial\nDevelopment Corporation Ltd. (supra), a Special Leave Petition was\npreferred before the Hon'ble Supreme Court. It was pointed out that the\nHon'ble Supreme Court, vide order dated 31.03.2016, has been pleased to\n26\ndispose of the said SLP, thereby leaving the decision of the Hon'ble High\nCourt undisturbed.\n18. The Id. AR thereafter invited our attention to the legislative\ndevelopments post the judgment in Ghanshyam (HUF) (supra). It was\nsubmitted that w.e.f. 01.04.2010, the Legislature, through the Finance (No. 2)\nAct, 2009, inserted section 145A (subsequently renumbered as section 145B)\nand simultaneously amended section 56(2) by inserting clause (viii) to\nspecifically deal with taxability of interest on compensation or enhanced\ncompensation. The Id. AR submitted that the CBDT also issued a clarificatory\nCircular explaining the intent and scope of these amendments. In this\nconnection, our attention was drawn to paragraph 11 of the judgment of the\nHon'ble Gujarat High Court in MavaliyaBhikhubhaiBalabhai vs. ITO (TDS)\n[2016] 70 taxmann.com 45 (Guj.), SCA No. 17944 of 2015, dated 31.03.2016\n(placed at page 278 of the paper book), wherein the Hon'ble Court\nreproduced the relevant CBDT Circular and explained the legislative purpose\nin the following terms:\n11. It has been vehemently contended on behalf of the first respondent that\nthe above decision has been rendered prior to the substitution of section\n145A of the I.T. Act by Finance (No. 2) Act, 2009 with effect from 1st April,\n2010, and hence, would have no applicability to the facts of the present\ncase. The scope and effect of the substitution (with effect from 1st April,\n2010) of section 145A, as also amendment made in section 56(2) by Act 33 of\n2009 have been elaborated in the following portion of the departmental\ncircular No. 5/2010, dated 3.6.2010, as follows:\n\"Rationalizing the provisions for taxation of interest received on delayed\ncompensation or on enhanced compensation.-\n46.1 The existing provisions of Income Tax Act, 1961, provide that income chargeable\nunder the head \"Profits and gains of business or profession\" or \"Income from other\nsources\", shall be computed in accordance with either cash or mercantile system\nof accounting regularly employed by the assessee. Further the Hon'ble Supreme\nCourt in the case of Smt. Rama Bai v. CIT (1990) 84 CTR (SC) 164 : (1990) 181 ITR\n400 (SC) has held that arrears of interest computed on delayed or enhanced\ncompensation shall be taxable on accrual basis. This has caused undue hardship\nto the taxpayers.\n46.2 With a view to mitigate the hardship, section 145A is amended to provide that\nthe interest received by an assessee on compensation or enhanced\ncompensation shall be deemed to be his income for the year in which it was\n27\nreceived, irrespective of the method of accounting followed by the assessee.\n46.3 Further, clause (viii) is inserted in sub-section (2) of the section 56 so as to provide\nthat income by way of interest received on compensation or enhanced\ncompensation referred to in clause (b) of section 145A shall be assessed as\n\"income from other sources\" in the year in which it is received.\n46.4 Applicability. - This amendment has been made applicable with effect from 1st\nApril, 2010, and it will accordingly apply in relation to assessment year 2010-11\nand subsequent assessment years.\nThus, the substitution of section 145A by Finance (No. 2) Act, 2009 was not in\nconnection with the decision of the Supreme Court in Ghanshyam\n(HUF)'s case (supra) but was brought in to mitigate the hardship caused to\nthe assessee on account of the decision of the Supreme Court in Rama\nBai v. CIT [1990] 181 ITR 400/[1991] 54 Taxman 496 whereby it was held that\narrears of interest computed on delayed or enhanced compensation shall\nbe taxable on accrual basis. Therefore, when one reads the words \"interest\nreceived on compensation or enhanced compensation\" in section 145A of\nthe I.T. Act, the same have to be construed in the manner interpreted by the\nSupreme Court in Ghanshyam (HUF)'s case (supra).\n12. On behalf of the first respondent, reliance has been placed upon\ndecisions of different High Courts taking a different view. This court is not in\nagreement with the view adopted by the other High Courts which are not\nconsistent with the law laid down in the case of Ghanshyam (HUF) (supra).\nIn Manjet Singh (HUF) Karta Manjeet Singh's case (supra), the Punjab and\nHaryana High Court has chosen to place reliance upon various decisions of\nthe Supreme Court rendered during the period 1964 to 1997 and has chosen\nto brush aside the subsequent decision of the Supreme Court in Ghanshyam\n(HUF)'s case (supra) which is directly on the issue by observing that the\nassessee cannot derive any benefit from the observations made by the\nSupreme Court as quoted therein. In Hari Kishan's case (supra), the Punjab\nand Haryana High Court has placed reliance upon its earlier decision in the\ncase of Manjet Singh (HUF) Karta Manjeet Singh (supra). In Bir Singh\n(HUF)'s case (supra), the Punjab and Haryana High Court has held that under\nthe scheme of the 1894 Act, interest under section 34 is part of compensation\nwhile interest under section 28 is not the interest which partakes the\ncharacter of compensation and is treated differently. In the opinion of this\ncourt, the above view of the Punjab and Haryana High Court is contrary to\nwhat has been held in the decision of the Supreme Court in Ghanshyam\n(HUF)'s case (supra) wherein it has been held that interest under section 28\nunlike interest under section 34 is an accretion to the value, hence it is a part\nof enhanced compensation or consideration which is not the case with\ninterest under section 34 of the 1894 Act. This court is in agreement with the\nview adopted by the Punjab and Haryana High Court in Jagmal Singh's case\n(supra), which has been extensively referred to in paragraph 4.1 above. The\ndecision of the Delhi High Court in Sharda Kochhar's case (supra), having\nbeen rendered in the context of a different controversy would have no\napplicability to the facts of the present case.\n13. The upshot of the above discussion is that since interest under section 28\nof the Act of 1894, partakes the character of compensation, it does not fall\nwithin the ambit of the expression \"interest\" as contemplated in section 145A\n28\nof the I.T. Act. The first respondent - Income Tax Officer was, therefore, not\njustified in refusing to grant a certificate under section 197 of the I.T. Act to\nthe petitioner for non-deduction of tax at source, inasmuch as, the petitioner\nis not liable to pay any tax under the head \"income from other sources\" on\nthe interest paid to it under section 28 of the Act of 1894\".\nA copy of the judgment and order dated 31.03.2016 passed by the Hon'ble\nHigh Court of Gujarat in Special Civil Application No. 17944/2015 is produced\nas Annexure-P-18 (pg. 304 to 326).\n29\n20. Subsequently, the Id. AR invited our attention to page 352 of the paper\nbook, pointing to the reliefs sought by the assessee in the writ petition.\nParticular emphasis was placed on Ground (b) at page 352, which reads as\nunder:\nb) issue writ of mandamus or in the nature of mandamus or any other writ or\ndirection directing that the interest component under Section 28 of the Land\nAcquisition Act is not exigible to tax under Section 56 (2) (viii) r/w Section 145A\n(b) of the Income Tax Act as \"income from other sources\"; and /or...\n21.\nThe Id. AR thereafter invited our attention to page 364 of the paper\nbook, wherein a consolidated order passed by the Hon'ble Supreme Court is\nplaced on record. Further reference was made to page 366 of the paper\nbook, where the Hon'ble Supreme Court made the following observations:-\ni)\nCivil appeal No. 15094/2017 (arising out of SLP ( C) No. 19887/2014) -HSIDCL\nvs Savitri and another\nii)\nWP (C) No. 590/2016 (page 291) – Brahamaprakash& Ors.\niii)\nCivil Appeal No. 15145/2017 (arising out of SLP ( C) No. 18495/2017) -\nMovaliyaBhikubhgaiBalabhai\n22. It was submitted that the operative part of the direction of the Hon'ble\nSupreme Court dated 15.9.2017 reads as under:-\n2) While determining as to whether the compensation paid was for\nagricultural land or not, the Assessing Officer(s) will keep in mind the\nprovisions of Section 28 of the Land Acquisition Act and the law laid down by\nthis Court in Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF)\n23\n[2009 (8) SCC 412] in order to ascertain whether the interest given under the\nsaid provision amounts to compensation or not.\"\n23. On the basis of the submissions made before us, as reproduced\nhereinabove, the Learned Authorised Representative (Ld. AR) has\nemphasized that the ratio laid down by the Hon'ble Supreme Court in the\ncase of Ghanshyamdas (HUF) (supra) continues to hold the field and has\nbeen consistently followed by the Hon'ble Supreme Court itself, without any\nreservations or qualifications, even after the subsequent amendments to the\nAct.\n24. It was submitted that the Hon'ble Gujarat High Court, relying upon the\ndecision in the case of MovaliyaBhikubhaiBalabhai vs ITO, has decided\nanother writ petition in favour of the Assessee, and our attention was drawn\nto page 375 in the case‘Mukta Nand Giri Mahesh Giri vs Direct District\nDevelopment officer'.\n25. The Ld. AR had further drawn our attention to the decision of the\nHon'ble Supreme Court in the case of Mukta Nand Giri Mahesh Giri vs Direct\nDistrict Development officer' where again the Hon'ble Supreme Court had\nreiterated the applicability and enforceability of the decision of the Hon'ble\nSupreme Court in the case of Ghanshyam HUF. It was submitted that a Misc.\npetition was filed by the Revenue in the decision of 'Brahamaparkash vs\nState of Haryana State Industrial and Infrastructure Development\nCorporation Ltd.' (supra) by the Revenue. However, the said Misc.\napplication was withdrawn by the Revenue.\n26. The Ld. AR, thereafter, had drawn our attention to page 389 of the\npaper book, where another writ petition is placed and in the title Jai\nBhagwan Singh vs HSIDC, wherein the following prayer has been sought at\npage 416.\n\"Prayer\nIn the facts and circumstance of the case, it is prayed that this Hon'ble\nCourt may be pleased to;\n30\na) issue writ of mandamus or in the nature of mandamus or any other\nwrit or direction directing the respondents to apply the judgment and\norder dated 15.09.2017 in C.A. No. 15041/2017 (Union of India & Ors. Vs.\nHari Singh & Ors) to the case of all the land owners and rectify the\nmistake by refunding the tax amount along with interest to the\npetitioners as the tax is not payable on compensation including interest\nunder Section 28 of L.A. Act received against the acquisition of rural\nagricultural lands And/or\nb) pass such order or orders as this Hon'ble Court may deem fit in the\nfacts and circumstances of the case.\"\n27. The Hon'ble Supreme Court after considering the submissions of the\nparties have passed the following order at page 420 and 421 of paper book\n\"We are not inclined to entertain the writ petition under Article 32 of the\nConstitution.\nThe writ petition is accordingly dismissed. It shall, be without prejudice to any\nof the remedies available to the petitioners including praying for a fresh\ndecision on the return filed in pursuance of the judgment of this Court in Civil\nAppeal 15041 of 2017 titled Union of India & Ors. v. Hari Singh & Ors. decided\non 15.09.2017. Learned ASG submits that the review petition which was earlier\nfiled to review the judgment datedor passing the fresh assessment order on\nthe return filed by the 15.09.2017 has already been withdrawn hence, steps\nwill be taken petitioner\n28. Thereafter, a communication dated 22.5.2016 was brought to our\nnotice whereby the PCIT was asked to comply with the direction. The Ld. AR\nhad drawn our attention to various orders passed by the Tribunal whereby\nthe Tribunal followed the decision of the ‘Ghanhsyan' (supra). It as\nsubmission of the Ld. AR that the decision in the case of 'Ghanshyam'\n(supra) be followed.\n\"2) While determining as to whether the compensation paid was for\nagricultural land or not, the Assessing Officer(s) will keep in mind the\nprovisions of Section 28 of the Land Acquisition Act and the law laid down by\nthis Court in 'Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF)\n[2009 (8) SCC 412) in order to ascertain whether the interest given under the\nsaid provision amounts to compensation or not.\n29.\nThe Ld. Authorised Representative (AR) submitted that there is no\nspecific provision in Section 2(24) of the Income-tax Act, 1961, incorporating\nwithin its ambit any “other income" referred to in Section 56(2)(viii) of the\nAct. It was contended that unless a particular receipt is expressly brought\nwithin the inclusive definition of “income" under Section 2(24), the same\n31\ncannot be subjected to tax under Section 56(2)(viii). The Ld. AR pointed out\nthat Section 56(2)(viii) does not have any corresponding mention in Section\n2(24)(xvi) or elsewhere, and hence, any amount described under that\nclause would not automatically form part of taxable income.\n30. It was further contended that the decision of the Hon'ble Punjab &\nHaryana High Court in the case of Mahender Singh Narang was rendered\nper incurium, since the Hon'ble Court did not take into account the binding\nprecedents of the Hon'ble Supreme Court in the cases of Hari Singh v. UOI\n(2018) 91 taxmann.com 20 (SC), Savitri Devi v. CIT, and other connected\nmatters. Therefore, it was argued that this Tribunal is not bound to follow a\nper incurium decision. The Ld. AR emphasised that the interest received on\nenhanced compensation under Section 28 of the Land Acquisition Act,\n1894, cannot be taxed as “Income from other sources,” since there exists no\ncharging provision in the Income-tax Act which brings such receipts to tax\nunder Section 56(2) (viii).\n31. It was also submitted that the amendment to Section 145A(b) was\nintroduced by the Finance (No. 2) Act, 2009 with effect from 1 April 2010\n(notification dated 09/07/2009), subsequent to the Supreme Court judgment\nin CIT v. Ghanshyam (HUF) (2009) 315 ITR 1 (SC). Therefore, the legislature did\nnot have the benefit of considering the said decision while enacting the\namendment. According to the Ld. AR, this is not a case of legislative\noverruling of the judicial pronouncement, and consequently, the law as laid\ndown in Ghanshyam (HUF) continues to govern the field. The Ld. AR further\nreferred to the Explanatory Notes to the Finance (No. 2) Act, 2009, wherein\nthe amendment was stated to address the hardship arising from the\ndecision in Ramabai (supra) and similar cases, and notably, there was no\nreference to Ghanshyam (HUF) therein, which supports the assessee's\ninterpretation that the amendment had a limited curative scope.\n32\nof the I.T. Act. The first respondent - Income Tax Officer was, therefore, not\njustified in refusing to grant a certificate under section 197 of the I.T. Act to\nthe petitioner for non-deduction of tax at source, inasmuch as, the petitioner\nis not liable to pay any tax under the head \"income from other sources\" on\nthe interest paid to it under section 28 of the Act of 1894\".\nA copy of the judgment and order dated 31.03.2016 passed by the Hon'ble\nHigh Court of Gujarat in Special Civil Application No. 17944/2015 is produced\nas Annexure-P-18 (pg. 304 to 326).\n20. Subsequently, the Id. AR invited our attention to page 352 of the paper\nbook, pointing to the reliefs sought by the assessee in the writ petition.\nParticular emphasis was placed on Ground (b) at page 352, which reads as\nunder:\nb) issue writ of mandamus or in the nature of mandamus or any other writ or\ndirection directing that the interest component under Section 28 of the Land\nAcquisition Act is not exigible to tax under Section 56 (2) (viii) r/w Section 145A\n(b) of the Income Tax Act as \"income from other sources\"; and /or...\n21. The Id. AR thereafter invited our attention to page 364 of the paper\nbook, wherein a consolidated order passed by the Hon'ble Supreme Court is\nplaced on record. Further reference was made to page 366 of the paper\nbook, where the Hon'ble Supreme Court made the following observations:-\ni)\nCivil appeal No. 15094/2017 (arising out of SLP ( C) No. 19887/2014) -HSIDCL\nvs Savitri and another\nii)\nWP (C) No. 590/2016 (page 291) – Brahamaprakash& Ors.\niii)\nCivil Appeal No. 15145/2017 (arising out of SLP ( C) No. 18495/2017) -\nMovaliyaBhikubhgaiBalabhai\n22. It was submitted that the operative part of the direction of the Hon'ble\nSupreme Court dated 15.9.2017 reads as under:-\n2) While determining as to whether the compensation paid was for\nagricultural land or not, the Assessing Officer(s) will keep in mind the\nprovisions of Section 28 of the Land Acquisition Act and the law laid down by\nthis Court in 'Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF)\n[2009 (8) SCC 412) in order to ascertain whether the interest given under the\nsaid provision amounts to compensation or not.\"\n23. On the basis of the submissions made before us, as reproduced\nhereinabove, the Learned Authorised Representative (Ld. AR) has\nemphasized that the ratio laid down by the Hon'ble Supreme Court in the\ncase of Ghanshyamdas (HUF) (supra) continues to hold the field and has\nbeen consistently followed by the Hon'ble Supreme Court itself, without any\nreservations or qualifications, even after the subsequent amendments to the\nAct.\n24. It was submitted that the Hon'ble Gujarat High Court, relying upon the\ndecision in the case of MovaliyaBhikubhaiBalabhai vs ITO, has decided\nanother writ petition in favour of the Assessee, and our attention was drawn\nto page 375 in the case‘Mukta Nand Giri Mahesh Giri vs Direct District\nDevelopment officer'.\n25. The Ld. AR had further drawn our attention to the decision of the\nHon'ble Supreme Court in the case of Mukta Nand Giri Mahesh Giri vs Direct\nDistrict Development officer' where again the Hon'ble Supreme Court had\nreiterated the applicability and enforceability of the decision of the Hon'ble\nSupreme Court in the case of Ghanshyam HUF. It was submitted that a Misc.\npetition was filed by the Revenue in the decision of 'Brahamaparkash vs\nState of Haryana State Industrial and Infrastructure Development\nCorporation Ltd.' (supra) by the Revenue. However, the said Misc.\napplication was withdrawn by the Revenue.\n26. The Ld. AR, thereafter, had drawn our attention to page 389 of the\npaper book, where another writ petition is placed and in the title Jai\nBhagwan Singh vs HSIDC, wherein the following prayer has been sought at\npage 416.\n\"Prayer\nIn the facts and circumstance of the case, it is prayed that this Hon'ble\nCourt may be pleased to;\n30\na) issue writ of mandamus or in the nature of mandamus or any other\nwrit or direction directing the respondents to apply the judgment and\norder dated 15.09.2017 in C.A. No. 15041/2017 (Union of India & Ors. Vs.\nHari Singh & Ors) to the case of all the land owners and rectify the\nmistake by refunding the tax amount along with interest to the\npetitioners as the tax is not payable on compensation including interest\nunder Section 28 of L.A. Act received against the acquisition of rural\nagricultural lands And/or\nb) pass such order or orders as this Hon'ble Court may deem fit in the\nfacts and circumstances of the case.\"\n27. The Hon'ble Supreme Court after considering the submissions of the\nparties have passed the following order at page 420 and 421 of paper book\n\"We are not inclined to entertain the writ petition under Article 32 of the\nConstitution.\nThe writ petition is accordingly dismissed. It shall, be without prejudice to any\nof the remedies available to the petitioners including praying for a fresh\ndecision on the return filed in pursuance of the judgment of this Court in Civil\nAppeal 15041 of 2017 titled Union of India & Ors. v. Hari Singh & Ors. decided\non 15.09.2017. Learned ASG submits that the review petition which was earlier\nfiled to review the judgment datedor passing the fresh assessment order on\nthe return filed by the 15.09.2017 has already been withdrawn hence, steps\nwill be taken petitioner\n28. Thereafter, a communication dated 22.5.2016 was brought to our\nnotice whereby the PCIT was asked to comply with the direction. The Ld. AR\nhad drawn our attention to various orders passed by the Tribunal whereby\nthe Tribunal followed the decision of the ‘Ghanhsyan' (supra). It as\nsubmission of the Ld. AR that the decision in the case of 'Ghanshyam'\n(supra) be followed.\n\"2) While determining as to whether the compensation paid was for\nagricultural land or not, the Assessing Officer(s) will keep in mind the\nprovisions of Section 28 of the Land Acquisition Act and the law laid down by\nthis Court in 'Commissioner of Income Tax, Faridabad v. Ghanshyam (HUF)\n[2009 (8) SCC 412) in order to ascertain whether the interest given under the\nsaid provision amounts to compensation or not.\n29.\nThe Ld. Authorised Representative (AR) submitted that there is no\nspecific provision in Section 2(24) of the Income-tax Act, 1961, incorporating\nwithin its ambit any “other income" referred to in Section 56(2)(viii) of the\nAct. It was contended that unless a particular receipt is expressly brought\nwithin the inclusive definition of “income" under Section 2(24), the same\n31\ncannot be subjected to tax under Section 56(2)(viii). The Ld. AR pointed out\nthat Section 56(2)(viii) does not have any corresponding mention in Section\n2(24)(xvi) or elsewhere, and hence, any amount described under that\nclause would not automatically form part of taxable income.\n30. It was further contended that the decision of the Hon'ble Punjab &\nHaryana High Court in the case of Mahender Singh Narang was rendered\nper incurium, since the Hon'ble Court did not take into account the binding\nprecedents of the Hon'ble Supreme Court in the cases of Hari Singh v. UOI\n(2018) 91 taxmann.com 20 (SC), Savitri Devi v. CIT, and other connected\nmatters. Therefore, it was argued that this Tribunal is not bound to follow a\nper incurium decision. The Ld. AR emphasised that the interest received on\nenhanced compensation under Section 28 of the Land Acquisition Act,\n1894, cannot be taxed as “Income from other sources,” since there exists no\ncharging provision in the Income-tax Act which brings such receipts to tax\nunder Section 56(2) (viii).\n31. It was also submitted that the amendment to Section 145A(b) was\nintroduced by the Finance (No. 2) Act, 2009 with effect from 1 April 2010\n(notification dated 09/07/2009), subsequent to the Supreme Court judgment\nin CIT v. Ghanshyam (HUF) (2009) 315 ITR 1 (SC). Therefore, the legislature did\nnot have the benefit of considering the said decision while enacting the\namendment. According to the Ld. AR, this is not a case of legislative\noverruling of the judicial pronouncement, and consequently, the law as laid\ndown in Ghanshyam (HUF) continues to govern the field. The Ld. AR further\nreferred to the Explanatory Notes to the Finance (No. 2) Act, 2009, wherein\nthe amendment was stated to address the hardship arising from the\ndecision in Ramabai (supra) and similar cases, and notably, there was no\nreference to Ghanshyam (HUF) therein, which supports the assessee's\ninterpretation that the amendment had a limited curative scope.\n32\n32. Lastly, on the basis of the orders passed by the Hon'ble Supreme\nCourt in the case of Brahm Prakash (supra), the subsequent orders in the\nmiscellaneous petitions filed therein, the withdrawal order in the case of Jai\nBhagwan, the decision rendered in the case of Hari Singh, as well as the\norder of the Hon'ble High Court and the communication issued by the\nLearned Additional Solicitor General, the Ld. Authorised Representative\nsubmitted that the ratio laid down by the Hon'ble Supreme Court has\nremained undisturbed. On the contrary, it has been reinforced and\nreiterated by the Hon'ble Supreme Court on multiple occasions.\nAccordingly, it was contended that the impugned order passed by the\nlower authorities, being contrary to the binding decision of the Hon'ble\nSupreme Court, deserves to be set aside and the additions made are liable\nto be deleted.\n33. The Id. Counsel, Shri Dharminder Singh, Advocate, appearing in Item\nNo. 56, submitted that the award of the LAC was passed on 20.02.2008;\nthereafter, the learned Additional District Judge enhanced the\ncompensation vide order dated 09.10.2014;at page 103 of PB it was held as\nunder:-\n30. In view of findings recorded on the issues above, the present petitions are\nhereby accepted partly with costs in favour of the petitioners and against\nthe respondents. The market value of the acquired land is assessed at\nRs.28,65,500/- per acre i.e. at the rate of Rs.592,045 per sq. yards as on the\nday of issuance of the notification under Section 4 of the Act. The petitioners\nare also held entitled to all the statutory benefits including solatium at the\nrate of 30% and additional amount at the rate of 12% per annum and\ninterest at the rate of 9% per annum for the first year and at the rate of 15%\nper annum for the subsequent period, in accordance with Sections 23(1-A),\n23(2) and 28 of the Land Acquisition Act. However the relief as sought by the\npetitioners for enhancement of compensation amount with regard to the\ntrees, buildings/structures and tubewells etc. stand declined.\nAnd subsequently, on further appeal, the Hon'ble High Court again\nenhanced the compensation vide order dated 20.03.2021, at page 107-108\nHon'ble High Court held as under:-\n\"The market value assessed in Tara Chand's case (supra) was Rs.904/- per square\nyard. Granting the benefit of 12% annual increase on the abovesaid market value of\n33\nRs.904/- per square yard, to the land owners of instant set of appeals, for this time\ngap of one year, the market value comes to Rs.1012.50, which is rounded off to\nRs.1013/- per square yard. Accordingly, the land owners are held entitled to receive\nthe amount of compensation at the uniform rate of Rs.1013/- per square yard for\ntheir acquired land, from the date of notification under Section 4 of the Act.\nLet it be specifically recorded here that no better evidence or any judicial\nprecedent was pressed into service nor any other argument was raised on behalf of\neither of the parties.\nConsidering the peculiar facts and circumstances of the cases noted above,\ncoupled with the reasons aforementioned, this Court is of the considered view that\nso far as the appeals filed by the beneficiary department i.e. HSIIDC are concerned,\nthe same have been found wholly misconceived, bereft of merit and without any\nsubstance, thus, these must fail and are hereby dismissed. The appeals filed by the\nland owners deserve to be partly accepted and the same are allowed to the extent\nindicated above. The land ownersare held entitled to receive the compensation for\ntheir acquired land at the rate of Rs.1013/- per square yard, from the date of\nnotification under Section 4 of the Act. Besides this, the land owners shall also be\nentitled to all the statutory benefits available to them, under the relevant provisions\nof the Act.\nResultantly, with the observations made above, all these 134 appeals stand\ndisposed of, in the abovesaid terms, however, with no order as to costs\".\n34.\nIt was submitted that both the learned ADJ and the Hon'ble High\nCourt granted enhanced compensation under section 28 of the Land\nAcquisition Act and not under section 34. Accordingly, the amount\nawarded under Section 28 partakes the character of compensation, not\ninterest simpliciter.\n35. In ITA No. 486, the Id. AR also advanced an alternative submission\nadopting the arguments of Shri Suraj Bhan, submitting that there is no\ndispute regarding the tax character of the interest received by the assessee\nup to 01.04.2010, since the field stood governed by the law laid down by the\nHon'ble Supreme Court in Ghanshyam (HUF) (supra). It was contended that\nthe interest is required to be bifurcated on a pro-rata basis, i.e., the portion\nrelatable to the period up to 01.04.2010 is to be treated as part of the\ncompensation, while the portion accruing thereafter may, if applicable, be\nassessed in terms of section 56(2)(viii) of the Act.\n36.\nIn Item No. 32, in the case of Shri Avtar Singh, Shri Vineet Krishan, the\nlearned AR appearing for the assessee, submitted that the law declared by\n34\nthe Hon'ble Supreme Court under Article 141 of the Constitution of India is\nbinding on all Courts and authorities. It was contended that once the\nHon'ble Supreme Court in Ghanshyam (HUF) (supra) has categorically held\nthat interest on enhanced compensation partakes the character of\ncompensation, the subsequent statutory amendment cannot retrospectively\nalter the settled legal position to the detriment of the assessee. The learned\nAR further submitted that several assessees similarly situated have not been\nsubjected to tax under the head “Income from Other Sources” in respect of\nsuch interest. Reliance was placed on the judgment of the Hon'ble Punjab\n& Haryana High Court in Jaswant Rai v. CIT [107 ITR 466], as well as a\ndecision of the Hon'ble Kerala High Court, in support of the contention that\nthe interest awarded on enhanced compensation has to be treated as part\nof compensation and not as independent interest income.\n37. Per contra, the learned DR, Shri Manav Bansal, appearing for the\nRevenue, submitted that sections 11, 23 and 24 of the Land Acquisition Act\nare required to be read strictly in the context of the enquiry relating to the\ndetermination of compensation. It was contended that, on a plain reading\nof section 28 of the LAC, the provision contemplates two distinct\ncomponents: first, the determination of the amount payable in excess of the\ncompensation awarded initially by the Collector; and second, the grant of\ninterest on such excess amount at the statutory rate of 9%. According to the\nlearned DR, the statute consciously employs separate terminology\n- one\nabout \"enhanced amount/award\" and the other to \"interest on such\nexcess amount\" and therefore, both elements must be treated distinctly\nin law.\n38. The learned DR further placed reliance on section 2(24) of the\nIncome-tax Act, which defines “income”, and section 2(28A), which defines\n"interest”, to contend that the statutory definition squarely encompasses\nany interest received pursuant to a claim, and hence such receipt\nconstitutes income. Having referred to the definition clause, the learned DR\n35\ndrew attention to section 56(2)(viii) of the Act, which expressly provides that\ninterest on compensation or enhanced compensation is taxable under the\nhead \"Income from Other Sources”. It was thus argued that the legislative\nscheme clearly mandates separate taxation of the interest component,\nindependent of the compensation..\n39. The learned DR further submitted that the ratio laid down by the\nHon'ble Supreme Court in Ghanshyam (HUF) (supra) has been subsequently\nconsidered and followed by the jurisdictional Punjab & Haryana High Court\nin the case of Mohinder Pal Narang as well as by the Hon'ble Delhi High\nCourt in the case of Interjesh Singh Sodhi. The relevant portions of the\naforesaid judgments are reproduced elsewhere.\n40. The learned DR submitted that the decision in the case of Hari Singh\n(supra) pertains to an entirely different issue and, therefore, has no\napplication to the present controversy. In this regard, he drew our attention\nto page 366 of the paper book filed by the learned AR, which records the\nfollowing observations:\n\"An admitted fact which is common in all these appeals that while disbursing\nthe compensation, the Land Acquisition Collector had deducted the tax at\nsource and deposited the same with the Income Tax Department. These\nappellants preferred the writ petition in the High Court stating that no such\ndeduction at source was permissible in view of the provisions of Section 194LA\nof the Income Tax land and this provision categorically mentions that in Act,\n1961, since the land which was acquired was agricultural respect of\nagricultural land, tax at source is not to be deducted.\n41.\nSimilarly, the learned DR submitted that the writ petition filed by Jai\nBhagwan Singh pertained to deduction of tax at source under section 194LA\nof the Act and the applicability of exemption under section 10(37) of the\nAct. It was contended that the scope and ambit of the decisions in Hari\nSingh as well as in Jai Bhagwan Singh were confined to the interpretation of\nsection 194LA and section 10(37) of the Income-tax Act, and did not deal\nwith section 56(2)(viii), section 145A/145B of the Act, or section 28 of the\nLand Acquisition Act. Therefore, according to the learned DR, those\n36\ndecisions have no bearing on the present dispute.It was submitted that\nSection 194LA of the Income-tax Act, 1961 mandates deduction of tax at\nsource (TDS) by the payer at the time of making payment for compulsory\nacquisition of immovable property other than agricultural land. It was further\ncontended that in the case of Hari Singh v. Union of India [2018] 91\ntaxmann.com 20 (SC)the issue of chargeability of interest to tax was not the\nlis before the Hon'ble Supreme Court. The only question before the Hon'ble\nCourt was whether the disbursing authority was required to deduct tax at\nsource under Section 194LA while releasing the award amount pertaining to\nagricultural land, which is otherwise excluded from the ambit of the said\nprovision. He had drawn our attention to para 2&3 of the judgement of the\nHon'ble Supreme Court which is to the following effect:\n2. In all these appeals the short question of law which needs consideration is\nas to whether the tax at source is to be deducted on the amounts which are\npaid as compensation or enhanced compensation, etc., on account of\ncompulsory acquisition of land under the provisions of Land Acquisition Act,\n1894.\n3. An admitted fact which is common in all these appeals is that while\ndisbursing the compensation, the Land Acquisition Collector had deducted\nthe tax at source and deposited the same with the Income Tax Department.\nThese appellants preferred the writ petition in the High Court stating that no\nsuch deduction at source was permissible in view of the provisions of Section\n194LA of the Income Tax Act, 1961, since the land which was acquired was\nagricultural land and this provision categorically mentions that in respect of\nagricultural land, tax at source is not to be deducted.\n42. The learned DR further submitted that when the Hon'ble Supreme\nCourt rendered its decision in Ghanshyam (HUF) (supra), the Court did not\nhave the benefit of considering the subsequent statutory amendments\nbrought into effect from 01.04.2010 by insertion of section 56(2)(viii) and\nsection 145A/145B. It was also pointed out that the CBDT, vide Circular\ndated 03.06.2010, in paragraphs 46.1to 46.4, has clearly clarified the\nlegislative intent behind the said amendments, which reads as under:-\nCIRCULAR NO. 5/2010/[F. NO. 142/13/2010-SO(TPL)]\nFINANCE (NO. 2) ACT, 2009 - EXPLANATORY NOTES TO THE PROVISIONS OF THE\nFINANCE (NO. 2) ACT, 2009\nCIRCULAR NO. 5/2010/[F. NO. 142/13/2010-SO(TPL)], DATED 3-6-2010\n37\n[AS CORRECTED BY CORRIGENDUM NO.5/2010 [F.NO.142/13/2010-SO(TPL)],\nDATED 30-9-2010]\n46. Rationalizing the provisions for taxation of interest received on delayed\ncompensation or on enhanced compensation\n46.1 The existing provisions of Income-tax Act provide that income\nchargeable under the head \"Profits and gains of business or profession\" or\n\"Income from other sources\", shall be computed in accordance with either\ncash or mercantile system of accounting regularly employed by the\nassessee. Further, the Hon'ble Supreme Court in the case of Rama\nBai v.CIT (181 ITR 400) has held that arrears of interest computed on delayed\nor enhanced compensation shall be taxable on accrual basis. This has\ncaused undue hardship to the taxpayers.\n46.2 With a view to mitigate the hardship, section 145A is amended to\nprovide that the interest received by an assessee on compensation or\nenhanced compensation shall be deemed to be his income for the year in\nwhich it was received, irrespective of the method of accounting followed by\nthe assessee.\n46.3 Further, clause (viii) is inserted in the sub-section (2) of the section 56 so\nas to provide that income by way of interest received on compensation or\non enhanced compensation referred to in clause (b) of section 145A shall be\nassessed as \"income from other sources\" in the year in which it is received.\n46.4 Applicability - This amendment has been made applicable with effect\nfrom 1st April, 2010, and will accordingly, apply in relation to assessment year\n2010-11 and subsequent assessment years.\n38\n43. In sum and substance, the learned DR submitted that a plain reading\nof section 56(2)(viii) of the Act clearly provides that interest received on\ncompensation or on enhanced compensation is taxable under the head\n\"Income from Other Sources”, and therefore the assessees are liable to pay\ntax on such receipts.\n44. Rebutting the submissions advanced by the learned AR, it was\ncontended that the absence of any specific reference to section 56(2)(viii)\nin section 2(24) of the Act, which defines “income”, is of no consequence.\nThe definition in section 2(24) is inclusive in nature, and several categories of\nincome or deemed income chargeable to tax do not find express mention\ntherein. Further, the Ld. DR refer to Section 4 and 14 of the Income Tax Act,\n1961 to support the case of the Revenue. It was submitted that the deemed\nincome is chargeable under section 4 of the Act, and Section 14 provide\nthe heads of income and Clause F provide income from other sources and\nincome from other sources is provided under section 56 of the Act. Thus,\nonce the interest on enhanced compensation is included as income from\nother sources under section 56 then the same is chargeable to tax under\nsection 4 being the deemed income.\n45. It was further argued that where the statutory language is clear and\nunambiguous, literal interpretation must prevail. Lastly, the learned DR\nsubmitted that the taxability of the impugned receipts must be determined\nstrictly in accordance with the provisions of the Income-tax Act and not on\nthe basis ofthe definition of compensation under the Land Acquisition Act.\nThe Income-tax Act being a special statute governing taxation will prevail\nover the meaning assigned to compensation under section 28 of the Land\nAcquisition Act.\n46. The Ld. Departmental Representative (DR) drew attention to the\nExplanatory Notes to the Finance (No. 2) Act, 2009, emphasising that the\nlegislative intent was to bring uniformity in taxation of interest on\ncompensation or enhanced compensation and to mitigate practical\nhardship in such cases. The Ld. DR submitted that the omission of any\nreference to Ghanshyam (HUF) in the said Notes does not dilute the\nlegislative intent. According to the Ld. DR, the insertion of clause (viii) in\nSection 56(2) and corresponding amendments in Section 145A were\ndesigned to codify the law and provide a specific charging mechanism for\ninterest on compensation, whether under Section 28 or 34 of the Land\nAcquisition Act. Hence, the receipt of interest in question squarely falls within\nthe purview of taxable income.\n47. He had drawn our attention to the following two decision of the\nPunjab & Haryana High Court in the case of Mahnder Pal Naran Vs. CBDT,\nNew Delhi in C.W.P. No. 17971 of 2019 dt. 19/02/2020 [2020] 120 taxmann.co\nm 400 has held as under :\n39\n7. Before dealing with the contentions, relevant portion of the circular is quoted\nbelow:\n'46. Rationalizing the provisions of taxation of interest received on delayed\ncompensation or on enhanced compensation.\n46.1 The existing provisions of Income-tax Act provide that income chargeable under\nthe head \"Profits and gains of business or profession\" or \"Income from other sources\",\nshall be computed in accordance with either cash or mercantile system of\naccounting regularly employed by the assessee. Further, the Hon'ble Supreme Court\nin the case of Rama Sai v. CIT (181 ITR 400) has held that arrears of interest computed\non delayed or enhanced compensation shall be taxable on accrual basis. This has\ncaused undue hardship to the taxpayers.\n46.2 With a view to mitigate the hardship, section 145A is amended to provide that\nthe interest received by an assessee on compensation or enhanced compensation\nshall be deemed to be his income for the year in which it was received, irrespective of\nthe method of accounting followed by the assessee.\n46.3 Further, clause (viii) is inserted in the sub-section (2) of the section 56 so as to\nprovide that income by way of interest received on compensation or on enhanced\ncompensation referred to in clause (b) of section 145A shall be assessed as \"income\nfrom other sources\" in the year in which it is received.\n46.4 Applicability- This amendment has been made applicable with effect from 1st\nApril, 2010, and will accordingly apply in relation to assessment year 2010-11 and\nsubsequent assessment years.'\n8. Section 45 of the 1961 Act deals with capital gains. By Finance Act, 1987, sub-\nsection (5) was inserted in Section 45 and as per its clause (b), the enhanced\ncompensation shall be chargeable under the head \"Capital gains\" of the previous\nyear in which the amount is received by the assessee. This issue came up before Apex\nCourt in Ghanshyam's case (supra). Considering Sections 45(5) and 155(16) of the\n1961 Act, it was held that enhanced compensation received under the 1894 Act may\nbe received in multiple stages but the same is to be treated as \"deemed income\" at\nthe time when it is received and is to be taxed on receipt basis. It was further held, the\nfact that enhanced compensation is in dispute and the withdrawal is conditional will\nnot make a difference. While dealing with the said issue, it was held that interest on\nenhanced value of land forms part of compensation and is exigible to tax in the year\nof receipt whereas interest on delayed payment of enhanced compensation is\nincome in a different nature.\n9. The scheme with regard to chargeability of interest received on compensation and\nenhanced compensation has undergone a sea change with the insertion of sections\n56(2) (viii) and 57(iv) of the 1961 Act. Section 56 deals with income from other sources\nand a specific provision has been inserted by way of sub-section 2(viii), whereby the\ninterest received on compensation or enhanced compensation, as referred to in\nclause (b) to section 145A has been included under the head 'Income from other\nsources'. In clause (iv) to section 57, deduction of fifty per cent is provided on interest\nreceived on compensation or enhanced compensation.\n10. In view of the amendments, the decision of Apex Court in Ghanshyam's case\n(supra) does not come to the rescue of the petitioner to claim that interest received\nunder section 28 of the 1894 Act is to be treated as compensation and to be dealt\nwith under \"Capital gains\". The fact that there is no amendment carried out under\nsection 10(37) of the 1961 Act will not change the position. Section 10 deals with\ndeductions and sub-section (37) thereof deals with capital gains arising from transfer\nof agricultural land, it no where provides as to what is to be included under the head\n\"Capital gains\". The argument raised is not well founded.\n11. Learned counsel has relied on Circular No. 5 of 2010 by merely reading clause\n46.