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Facts
The assessee received interest on compensation/enhanced compensation for land acquisition from Noida Authority and created FDRs from these proceeds. The AO made an addition, which was subsequently sustained by the CIT(A) despite the appeal before him being ex parte, relying on a High Court judgment.
Held
The Tribunal noted that while the CIT(A) dismissed the appeal for non-prosecution, the addition was also sustained on merits. Citing the need for factual verification regarding the nature of compensation received and the sources of the FDRs, the Tribunal restored the entire issue to the Assessing Officer for a fresh determination, ensuring the assessee is given adequate opportunity of hearing.
Key Issues
Whether the interest on compensation/enhanced compensation for land acquisition and FDRs created from such proceeds are taxable, and the proper treatment thereof requiring factual verification.
Sections Cited
147, 144, 144B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCHES : H : NEW DELHI
Before: SHRI ANUBHAV SHARMA & SHRI BRAJESH KUMAR SINGH
(Appellant) (Respondent) Assessee by : Shri Satyajeet Goel, CA Revenue by : Shri Amit Katoch, Sr. DR Date of Hearing : 28.10.2024 Date of Pronouncement : 06.11.2024 ORDER
PER ANUBHAV SHARMA, JM:
This appeal is preferred by the assessee against the order dated 26.12.2023 of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in Appeal Nos.NFAC/2012-13/10169787 arising out of the appeal before it against the order dated 31.03.2022 passed u/s 147 r.w.s. 144 r.w.s.144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) by the National Faceless Assessment Centre, Delhi (hereinafter referred to as the Ld. AO).
On hearing both the sides, we find that the assessment order was passed u/s 147 r.w.s. 144 of the Act and the order of the ld. First Appellate Authority is also ex parte. We find that following the decision in Multiplan India (P) Ltd., 38 ITD 320, in para 8.3, the CIT(A) mentions that the appeal of the assessee is liable to be dismissed for want of prosecution. However, the CIT(A) had also sustained the addition on merits.
We find that the issue primarily involved in the case of the assessee is treatment required to be given to the amount received by the assessee in the form of interest on compensation/enhanced compensation received from Noida Authority in lieu of the acquisition of landholding of the assessee by the said authority. The issue also concerns the FDRs created by the assessee which the ld. AR has submitted that same was out of the compensation proceeds only. Ld. AR has tried to distinguish the judgment of the Hon’ble Punjab & Haryana High Court in the case of Mahender Pal Narang vs. CBDT, CWP No.17971 of 2019, order dated 19.02.2020, which is relied by the ld. CIT(A). As the issue requires verification of facts about the heads under which the assessee had received the compensation or sources of creation of FD, we find it an appropriate case to restore the issue for a fresh determination by the AO. Accordingly setting aside the assessment order the issue on merits is restored with the AO for afresh 2 determination. Needless to say, adequate opportunity of hearing shall be given to the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.