SHRI MUKESHKUMAR K. PATEL,AHMEDABAD vs. THE INCOME TAX OFFICER, WARD-14(2), AHMEDABAD

ITA 246/AHD/2015Status: DisposedITAT Ahmedabad26 September 2017AY 2007-086 pages
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What did the Tribunal hold?

The Tribunal followed a coordinate bench's decision which held that interest awarded under the Land Acquisition Act on enhanced compensation for agricultural land is not taxable as capital gains. Therefore, the addition made by the AO was not legally sustainable.

What were the facts?

The assessee received interest income of Rs. 4,53,570/- in FY 2006-07, which was computed from FY 2001-02 to 2006-07. The assessee offered a portion of this interest income in his return, believing it was exempt from tax. The Assessing Officer taxed the entire amount on a receipt basis.

What were the issues?

Whether interest on enhanced compensation for agricultural land acquired under the Land Acquisition Act is taxable on receipt basis, and if the reopening of assessment was valid.

Which sections of the Income-tax Act were involved?

Section 147,Section 234A,Section 234B,Section 234C,Section 271(1)(c)

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Income Tax Appellate Tribunal, “ A ” BENCH, AHMEDABAD

Before: SHRI N.K. BILLAIYA & SHRI MAHAVIR PRASAD

For Respondent: Shri James Kurian, Sr. D.R
Hearing: 26/09/2017

PER SHRI MAHAVIR PRASAD, JUDICIAL MEMBER :

This is an appeal by the assessee against the order of the Commissioner of Income Tax(Appeals)-5, Ahmedabad, dated 30/12/2014 for the Assessment Year (AY) 2007-08, on the following Grounds: i. The learned CIT(A) has erred both in law and on the facts of the case in confirming the action of AO in reopening the assessment u/s.1

The order continues below.

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