SANJAY,GHAZIABAD vs. WARD 2(1), GHAZIABAD

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ITA 4481/DEL/2025Status: DisposedITAT Delhi27 August 2025AY 2017-18Bench: Sh. Satbeer Singh Godara (Judicial Member)1 pages
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What did the Tribunal hold?

The Tribunal, referring to various High Court decisions and noting the absence of guidance from the jurisdictional High Court, adopted the view favoring the assessee. The Tribunal reversed the action of the lower authorities in assessing interest on enhanced compensation.

What were the facts?

The assessee's appeal for AY 2017-18 arose from an order related to proceedings under Section 147 of the Income Tax Act. The lower authorities treated the assessee's enhanced compensation received from the prescribed authority under the Land Acquisition Act, 1894 as taxable.

What were the issues?

Whether interest on enhanced compensation received under the Land Acquisition Act is taxable under the Income Tax Act, specifically under Section 56(2)(viii) read with Section 57(iv).

Which sections of the Income-tax Act were involved?

Section 147,Section 56(2)(viii),Section 57(iv),Section 28

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Income Tax Appellate Tribunal, DELHI BENCH ‘SMC’, NEW DELHI

Before: Sh. Satbeer Singh Godara

Hearing: 27.08.2025Pronounced: 27.08.2025

Asstt. Year : 2017-18 Sanjay, Vs Income Tax Officer, Village & P.O.-Raispur, Ward-2(1), Ghaziabad, Hapur Road, Ghaziabad, Uttar Pradesh-201002 Uttar Pradesh-201002 (APPELLANT) (RESPONDENT) PAN No. CVIPS0942Q Assessee by: Sh. Sumit Bansal, CA Revenue by : Sh. Manoj Kumar, Sr. DR Date of Hearing: 27.08.2025 Date of Pronouncement: 27.08.2025 ORDER

This assessee’s appeal for Assessment Year 2017-18, arises against the CIT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2025-26/1076782472(1) dated 06.06.2025, in proceedings u/s 147 of the Income Tax Act, 1961 (in short “the Act”).

2.

Heard both the parties at length. Case file perused.

3.

Coming to the sole substantive issue between the parties herein, it emerges that both the learned lower authorities have treated the assessee’s enhanced compensation received from the prescribed authority under the provisions of section 28 of the Land Acquisition Act, 1894 as taxable u/s 56(2)(viii) r.w.s.

4.

Faced with this situation, learned departmental representative vehemently argues that the instant issue already stands decided in the Revenue’s favour in Mahender Pal Narang Vs. CBDT (2020) 423 ITR 13 (P&H) and PCIT Vs. Inderjit Singh Sodhi HUF (2024) 161 taxmann.com 301 (Del.). The assessee on the other hand places strong reliance on case law Rupesh Rashmikant Shah Vs. UOI (2019) 417 ITR 169 (Bom.), Anvar Ali Poolakkodan Vs. ITO (2025) 173 taxmann.com 633 (Kerala) and Movaliya Bhikhubhai Balabhai Vs. ITO (2016) 388 ITR 343 (Guj.) decided the very issue against the department. It is further clear that no valuable guidance has come from hon’ble jurisdictional high court at Allahabad. I accordingly adopt the view which favours the assessee in light of CIT Vs. Vegetable products Ltd. (1971) 80 ITR 14(Cal.) to reverse both the learned lower authorities’ action in question assessing his interest on enhanced compensation u/s 28 of the Act (supra). Ordered accordingly.

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