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Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD
Before: Shri Pramod Kumar]
This appeal is directed against the order dated 29th May 2015 passed by the 1. CIT(A) in the matter of assessment under Section 143(3) r.w.s. 148 of the Income- tax Act, 1961, for the assessment year 2008-09.
It is a case of reopened assessment. The reasons for reopening the assessment, as recorded by the Assessing Officer on 11.12.2012, are as follows:-
“The assessee has filed his return of income for A.Y. 2008-09 on 26/02/2009 vide ack. No. 631007612 declaring total income of Rs.15,000/-. On verification of TDS Certificate, it is observed that the assessee has received payment of Rs.17,20,492/- in the nature of interest for difference in compensation for compulsory acquisition of agriculture land from Sardar Sarovar Nigam Ltd. Chief Engineers S B C 6/3, M S Building Race Course, Rajkot - 360001. However, the assessee has not shown interest income of Rs. 17,05,492/- on the receipt basis in the A.Y. 2008-09. Therefore as per the decision of Hon'ble Supreme Court held in the case of CIT Faridabad Vs Ghanshyam (HUF) (2009) 182 Taxman 368 (SC) Civil Appeal Nos. 4401 to 4420, 4422 to 4426 of
ITA No.2508/Ahd/2015 Amratbhai R Rathod vs. ITO Assessment year: 2008-09 Page 2 of 3 2009 on July 2009. The interest income of Rs.17,05,492/- has escaped income by the assessee.
Therefore, I have reason to believe that the income chargeable to tax exceeding Rs.1 lac has escaped from assessment and the case of the assessee is required to be re-opened for the A.Y. 2008-09 u/s. 147 of the I.T. Act.
In view of the above facts, your Honour is requested to kindly accord necessary approval for issue of notice u/s. 148 in this case for A.Y. 2008-09.”
Aggrieved, inter alia, by the reopening so made, assessee carried the matter in appeal before the CIT(A) but without any success. Not satisfied, the assessee is in further appeal before me.
I have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position.
As learned counsel for the assessee rightly points out that the very fundamental reason of reopening the assessment, i.e. non-consideration of Hon’ble Supreme Court’s judgment in the case of Ghanshyam HUF (supra) is incorrect reasons because the Assessing Officer had duly considered the said decision while framing the assessment which was reopened. It is evident from the following observations made by the Assessing Officer in original assessment order:-
“In view of the judgement of Hon'ble Supreme Court in case of CIT V/s, Ghanshyam HUF in Civil Appeal No.4401 to 4420 and 4422 to 4426 of 2009 did. 16/07/2009, interest amount received by the assessee from Sardar Sarovar Nigam was in the nature of "enhanced compensation u/s. 45(5). Since the enhanced compensation/consideration, including interest becomes payable at difference stages, the receipt of enhanced compensation/ consideration is to be taxed in the year of receipt, subject to adjustment, if any under s. 155(16), later on. Even in cases where pending appeal, the Court/Tribunal/authority permits the claimant to withdrawn the disputed enhanced compensation against security or otherwise, the same is liable to be taxed under section 45(5). Even before the insertion of cl.(c) in s..45(5) and 155(16) w.e.f. 1st April, 2004 the receipt of enhanced compensation was taxable under s, 45 (5)(b) in the year of receipt which is only reinforced by insertion of Cl.(c)."
Payment received by the assessee of Rs. 17,20,491/- is in the nature of interest while making payment of compensation for compulsory acquisition of agriculture land is treated as enhanced compensation, which is taxable u/s 45(5) in view of above judgment and added back to the total income of the assessee”
ITA No.2508/Ahd/2015 Amratbhai R Rathod vs. ITO Assessment year: 2008-09 Page 3 of 3 6. The plea of the assessee is thus indeed well taken. I uphold the plea and hold that the reasons recorded for reopening, being factually incorrect, are unsustainable in law. I, therefore, vacate the impugned reassessment proceedings. As the reassessment itself stands quashed, all other issues raised by the assessee are only academic. The reassessment order thus stands quashed.
In the result, the appeal is allowed in the terms indicated above. Pronounced in the open court today on the 27th October, 2017.
Sd/-
Pramod Kumar (Accountant Member) Ahmedabad, the 27th day of October, 2017 **bt Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad
Date of dictation: ......two pages manuscripts of Hon’ble AM attached....typed on 27.10.2017 2. Date on which the typed draft is placed before the Dictating Member: ... 27.10.2017........ 3. Date on which the approved draft comes to the Sr. P.S./P.S.: .... 27.10.2017... . 4. Date on which the fair order is placed before the Dictating Member for Pronouncement:… 27.10.2017 ... 5. Date on which the file goes to the Bench Clerk : ...30.10.2017... 6. Date on which the file goes to the Head Clerk : ……………………………. 7. The date on which the file goes to the Assistant Registrar for signature on the order: ……