RAJESH SAHU,GURGAON vs. ASSESSING OFFICER, NFAU

ITA 78/DEL/2026Status: DisposedITAT Delhi09 February 2026AY 2018-19Bench: SHRI SATBEER SINGH GODARA (Judicial Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the PCIT's order under Section 263 was not sustainable. The AO's assessment, based on Supreme Court decisions affirming interest under Section 28 as part of enhanced compensation, was considered valid, even if debatable.

What were the facts?

The assessee received interest on land acquisition compensation. The Assessing Officer (AO) accepted this as part of enhanced compensation and exempt under Section 10(37). The Principal Commissioner (PCIT) invoked Section 263, deeming the AO's order erroneous and prejudicial to revenue, citing High Court decisions that interest should be taxed as income from other sources.

What were the issues?

Whether interest received on land acquisition compensation under Section 28 of the Land Acquisition Act is taxable as income from other sources or part of enhanced compensation exempt under Section 10(37). Whether the PCIT's revisionary order under Section 263 was justified when the AO followed a Supreme Court decision.

Which sections of the Income-tax Act were involved?

Section 10(37),Section 56(2)(viii),Section 57(iv),Section 145A,Section 263

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Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI

Before: SHRI SATBEER SINGH GODARA

Hearing: 09.02.2026Pronounced: 09.02.2026

This assessee’s appeal for assessment year 2018-19, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1082329643(1), dated 06.11.2025 involving proceedings under section 143(3) r.w.s. 263 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.

2.

It emerges during the course of hearing that the sole substantive issue between the parties is that of correctness of the learned lower authorities action assessing the assessee’s interest component of land acquisition compensation u/s 28 of the Land Acquisition Act, 1894, while invoking section 57(iv) r.w.s. 56(1)(a) r.w.s. 145A(b) of the Act.

3.

Learned Sr. DR represe

The order continues below.

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