“enhanced compensation”

Capital GainsSection 45(5)Section 45(5)344 judgments

The decision most relied on for enhanced compensation is CIT v. Ghanshyam (HUF) (315 ITR 1), cited in 363 judgments on BharatTax.

Leading authorities on enhanced compensation

CIT v. Ghanshyam (HUF)

315 ITR 1 · 2009 · Supreme Court

363

citing judgments

Interest received under Section 28 of the Land Acquisition Act, 1894, is considered part of the enhanced compensation on compulsory acquisition of land. It is taxable as 'capital gains' and not separately as 'interest income' under the head Income from Other Sources.

CIT v. Govindbhai Mamaiya

91 Taxmann.com 20 · 2018 · Supreme Court

205

citing judgments

Interest on enhanced compensation received under Section 28 of the Land Acquisition Act, 1894, is considered part of the compensation, not merely interest income, and is exigible to tax on a receipt basis.

Mahender Pal Narang v. CBDT

161 Taxmann.com 301 · 2024 · High Court

178

citing judgments

Interest received as enhanced compensation under Section 28 of the Land Acquisition Act, 1894, for compulsory acquisition of land is taxable as "income from other sources" under Sections 56(2)(viii) and 57(iv) of the Income-tax Act, 1961, and is not exempt under Section 10(37).

CIT v. Ganpat Ram Bisnoi

296 ITR 292 · 2008 · High Court

145

citing judgments

An assessment order cannot be revised under Section 263 for being erroneous due to a perceived lack of enquiry if the Assessing Officer has already conducted an enquiry, applied their mind, and accepted the assessee's explanation.

Sarla Verma & Ors. v. Delhi Transport Corporation & Anr.

6 SCC 121 · 2009 · Reported

140

citing judgments

This case establishes the principles for calculating compensation in motor accident and personal injury claims, including the selection of the multiplier based on the deceased's age, assessment of loss of dependency, consideration of future prospects, and deductions for personal expenses.

Movaliya Bhikhubhai Balabhai v. ITO TDS

388 ITR 343 · 2016 · High Court

128

citing judgments

Interest paid on compensation or enhanced compensation for compulsory acquisition of land forms part of the compensation itself and is not taxable as interest income under section 56(2)(viii) or section 145A.

Sham Lal Narula (Dr.) v. CIT

53 ITR 151 · 1964 · Supreme Court

100

citing judgments

Interest received under Section 28 of the Land Acquisition Act, 1894, on enhanced compensation does not form part of the compensation itself but is taxable as 'income from other sources', analogous to interest under Section 34 of the Act.

MavaliyaBhikhubhaiBalabhai v. ITO (TDS)\n

70 Taxmann.com 45 · 2016 · High Court

citing judgments

Interest received under Section 28 of the Land Acquisition Act, 1894, forms an integral part of enhanced compensation and is not taxable as "Income from Other Sources" under Section 56(2)(viii) of the Income-tax Act, 1961. The Finance Act, 2009 amendments do not alter the compensatory nature of such interest.

Judgments citing enhanced compensation

Sh. Manjeet Singh, Karnal vs. ITO, Karnal

In the result, the appeals of the assessees are allowed

ITA 1391/DEL/2017[2011-12]Status: DisposedITAT Delhi25 Jan 2023AY 2011-12

Bench: Dr. B. R. R. Kumarsh. Yogesh Kumar Us

For Appellant: Sh. Aditya Srinivasan, CAFor Respondent: Sh. K. K. Mishra, Sr. DR

Section 10(37)Section 145ASection 2Section 23(1)Section 28Section 4Section 56Section 56(2)(viii)

against the facts. 2. That the ld CIT(A) erred in law in confirming the orders of ITO treating the interest received on enhanced compensation as Income of the appellant where as the Apex Court in the case of CIT Vs. Govind Bhai Mamaiya has clearly held that interest received ... assessee was owner of agricultural land and the same was taken under compulsory acquisition by Government of Haryana. The assessee claimed the entire enhanced compensation inclusive of interest as residual part of compulsory acquisition of agricultural land and claimed it as exempted u/s 10(37). However

Sh. Puneet Singh, Karnal vs. ACIT, Karnal

In the result, the appeals of the assessees are allowed

ITA 1389/DEL/2017[2011-12]Status: DisposedITAT Delhi25 Jan 2023AY 2011-12

Bench: Dr. B. R. R. Kumarsh. Yogesh Kumar Us

For Appellant: Sh. Aditya Srinivasan, CAFor Respondent: Sh. K. K. Mishra, Sr. DR

Section 10(37)Section 145ASection 2Section 23(1)Section 28Section 4Section 56Section 56(2)(viii)

ITO, Ward-3, Karnal vs. Opinder Singh Virk, Karnal

In the result, the appeal filed by the Revenue is dismissed

ITA 2497/DEL/2019[2011-12]Status: DisposedITAT Delhi23 Jan 2023AY 2011-12

For Appellant: NoneFor Respondent: Shri Jitender Chand, Sr. DR

Section 145ASection 56Section 56(2)

case, the CIT(A) has erred in deleting the penalty of Rs.50,89,002/- made on account of addition of interest received on enhanced compensation claiming as exempt by the assessee by merely relying on the decision of Apex Court in the case of CIT Faridabad Vs Ghanshaym Dass ... with section 145A(b) of the I.T. Act, 1961 has also been introduced w.e.f. 01.04.2010 clearly mandating 50% of interest earned on compensation or enhanced compensation as taxable. 2 ITA No.2497/Del./2019 2. Whether on the facts and in the circumstances of the case, the CIT(A) has erred

Sana Shah, Panipat vs. ITO, Ward-1, Panipat

Appeal stands dismissed

ITA 1702/DEL/2022[2018=-19]Status: DisposedITAT Delhi17 Jan 2023

Bench: Shri N.K. Billaiya & Shri Anubhav Sharmasana Shah, Vs. Ito, 744-745, Model Town, Ward-1, Panipat, Haryana Panipat (Appellant) (Respondent) Pan: Bopps2855R

For Appellant: Ms. Aditi S. Mann, AdvFor Respondent: Ms. Kajal Singh, Sr. DR

Section 10Section 10(37)Section 143(3)Section 145BSection 28Section 5Section 54(4)Section 56Section 56(2)(viii)

Section 145B of the Act read with section 56(2)(viii) of the Act was of the view that interest part of the enhanced compensation amounting to Rs. 5,97,28,560/- was taxable and further extending the benefit of Section 54(4) of the Act of deduction ... proposed additions. However, addition of Rs. 2,71,49,345/- was made accepting the submission of assessee that interest of enhanced compensation was Rs. 5,42,98,690/- and not Rs. 5,97,28,560/-. The ld AO particularly relied on the judgment of Hon’ble Punjab and Haryana High

ITO, Ward- 2(4), Faridabad vs. The New Vikas Co-Op House Building Society Ltd., Ballabhgarh

In the result, the appeal of the Revenue in ITA No

ITA 708/DEL/2018[2010-11]Status: DisposedITAT Delhi13 Jan 2023AY 2010-11

Bench: Shri N.K. Billaiya & Shri Anubhav Sharma

For Appellant: Shri Vijay Kumar Gupta, AdvFor Respondent: Ms. Kajal Singh, Sr. DR

Section 143(3)Section 271(1)(c)

penalty lie in the assessment order dated 13.02.2013 framed u/s 143(3) of the Act wherein it was found that the assessee had received enhanced compensation on land and interest on enhanced compensation amounting to Rs. 2,64,07,962/-. 4. The Assessing Officer noticed that the assessee ... offered enhanced compensation and interest thereon for tax, though at the same time, has given the following note in computation of income: “During the present period i.e. A.Y. 2010-11 the present society received enhanced compensation of Rs. 1,97,03,406/- on account of compulsory acquisition of agricultural land

ACIT, Ncc - 11 (1), Chennai vs. Shri Anil Kumar Shantichand Mehta, Chennai

In the result, the appeal filed by the Revenue is dismissed

ITA 302/CHNY/2020[2016-17]Status: DisposedITAT Chennai28 Sept 2022AY 2016-17

Bench: Shri V. Durga Rao & Shri G. Manjunathaआयकर अपील सं./I.T.A. No.302/Chny/2020 िनधा"रण वष"/Assessment Year: 2016-17 The Assistant Commissioner Of Vs. Shri Anil Kumar Shantichand Mehta, Income Tax, No. 196, Govindappa Naicken Street, Non Corporate Circle 11(1), George Town, Chennai 600 001. Chennai 600 006. [Pan:Aavps4928E] (अपीलाथ"/Appellant) (""थ"/Respondent) अपीलाथ" की ओर से / Appellant By : Shri P. Sajit Kumar, Jcit ""थ" की ओर से/Respondent By : Shri D. Anand, Advdocate सुनवाई की तारीख/ Date Of Hearing : 02.08.2022 घोषणा की तारीख /Date Of Pronouncement : 28.09.2022 आदेश /O R D E R Per V. Durga Rao: This Appeal Filed By The Revenue Is Directed Against The Order Of The Ld. Commissioner Of Income Tax (Appeals) 13, Chennai, Dated 21.11.2019 Relevant To The Assessment Year 2016-17. The Revenue Has Raised The Following Grounds: 1. The Order Of The Learned Cit (A) Is Contrary To Facts & Circumstances Of The Case. 2. The Cit(A) Erroneously Held That The Assessee Had Not Claimed Exemption U/S.10(37) [P.8.2] Though The Assessee, Vide His Letter Dated 26-12-2018 Stated "The Compensation Of Rs.7,62,40,126/- Received Was Claimed Exempt U/S.10(37), However, It Was Erroneously Omitted To Be Mentioned In The Return Of Income Filed."

For Appellant: Shri P. Sajit Kumar, JCITFor Respondent: Shri D. Anand, Advdocate

Section 10(37)Section 2(14)(iii)Section 34Section 45Section 57

Land Acquisition Act as corroborated by the working sheet of the special Tehsildar to prove that the interest granted on the enhanced compensation which the AR has claimed to be exempt and therefore by natural and logical corollary the interest on such compensation would also be exempt from ... entire amount of interest and only claimed 50% of interest as exemption in the return of income filed and the interest received on enhanced compensation being part of compensation as stated earlier, the entire amount of interest received was therefore exempt on the enhanced compensation. 12.1 In this background

Salunki Govindrao Sambhaji, Dharwad vs. Deputy Commissioner of Income Tax, CPC, Bangalore

In the result, appeal of the assessee is partly allowed for statistical purposes

ITA 504/BANG/2022[2017-18]Status: DisposedITAT Bangalore18 Aug 2022AY 2017-18

Bench: Shri Chandra Poojariassessment Year: 2017-18

For Appellant: Shri G. Sathyanarayana, A.RFor Respondent: Shri Ganesh R. Ghale, Standing Counsel

Section 10Section 139(1)Section 139(5)Section 143(1)Section 143(1)(vi)Section 154Section 57

grounds:- 1. Illegal order: The order passed by CPC is illegal, baseless an d opposed to the facts of the case. 2. Interest on enhanced compensation: The assessee received interest from compensation on land acquisition. The CPC has erred in making addition of entire income from interest on land acquisition ... before or at the time of hearing. Salunki Govindrao Sambhaji, Dharwad Page 2 of 3 4. Interest on enhancd compensation: The interest received on enhanced compensation is also part of compensation and hence is exempt, as compensation is on acquisition of agricultural land. 2. Facts of the case are that

M/S. Hanumanthappa Chandrashekar, Bangalore vs. Assistant Commissioner of Income Tax, Circle - 3(2)(1), Bangalore

In the result, the appeal filed by the assessee is allowed for statistical purposes

ITA 1223/BANG/2019[2016-17]Status: DisposedITAT Bangalore16 Aug 2022AY 2016-17

Bench: Shri Chandra Poojari

For Appellant: Sri.K.R.Vasudevan, AdvocateFor Respondent: Sri.Ganesh R.Ghale, Standing Counsel

Section 46Section 96

accounts of the beneficiaries, then all the beneficiaries specified in the notification under Section 4 of the Act of 1894 shall get the enhanced compensation under the provisions of the Act of 2013.” (underlining by us) 50. In the circumstances, we find that the learned Single Judge was right

Anil Bhagwan Advani, Mumbai vs. ITO (It) 1(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 4385/MUM/2015[2011-12]Status: DisposedITAT Mumbai28 Jul 2022AY 2011-12

Bench: Shri Amit Shukla & Shri Gagan Goyal

For Appellant: Sh. Tapas MisraFor Respondent: Smt. Shailja Rai, CIT-DR

Section 154Section 251(1)Section 45(5)(b)Section 48Section 55A

erred in holding that Interest under Land Acquisition Act, 1894,on Award received by the assessee be treated as 'enhanced compensation' u/s 45(5)(b) of the Act and be taxed under the head 'Capital Gain' instead of treating the same as income under the head 'Income from other sources ... pursuant to the order of the Bombay High Court/Supreme Court as such there can be no question of delay in payment of compensation or enhanced compensation… Now to address the issue of whether such compensation should be taxed i.e. under the head "Capital Gains" or as "Income from Other Sources

Umesh B Balikai, Hubli vs. Principal Commissioner of Income Tax, Hubli

In the result, the appeal filed by the assessee is dismissed

ITA 505/BANG/2022[2017-18]Status: DisposedITAT Bangalore20 Jul 2022AY 2017-18

Bench: Shri George George K, Jm & Shri Laxmi Prasad Sahu, Am

For Appellant: --- None ---For Respondent: Dr.Manjunath Karkihalli, CIT-DR

Section 253Section 264Section 57

facts of the case. Proper opportunity of being heard has not been given by said authority. 2. The assessee has received interest on enhanced compensation on compulsory acquisition which is part of compensation and is exempt from tax. Hence TDS made on the same to be refunded. 2 ITA No.505/Bang/2022 ... Sri.Umesh B.Balikai. 3. The interest on enhanced compensation on compulsory acquisition is exempt from tax. However if it is treated as income then deduction u/s 57(iv) to the extent of 50% of the interest ought to have been given by the PCIT since interest related to more than

Leila Advani, Mumbai vs. ACIT - 16(2), Mumbai

In the result, appeal of the revenue is dismissed

ITA 2270/MUM/2016[2011-12]Status: DisposedITAT Mumbai18 Jul 2022AY 2011-12

For Appellant: Sh. Tapas MishraFor Respondent: Smt. Shailja Rai, CIT-DR

Section 143Section 143(2)Section 45(5)(b)Section 48Section 48(1)Section 54F

pursuant to the order of the Bombay High Court/Supreme Court as such there can be no question of delay in payment of compensation or enhanced compensation… Now to address the issue of whether such compensation should be taxed i.e. under the head "Capital Gains" or as "Income from Other Sources ... April, 1988; iii) Where by reason of the death of the person who made the transfer, or for any other reason, the enhanced compensation or consideration is received by any other person, the amount referred to in clause shall be deemed to be the income, chargeable to tax under

M/S. Ozone Urban Infra Developers Private Limited, Bangalore vs. The Assistant Commissioner of Income Tax TDS, Circel-2(1), Bangalore

In the result, appeal is allowed in favour of the assessee

ITA 225/BANG/2022[2019-20]Status: DisposedITAT Bangalore12 Jul 2022AY 2019-20

Bench: Shri. George George K & Ms. Padmavathy Sassessment Year : 2019-20 M/S. Ozone Urbana Infra Developers Pvt. Ltd., Vs. Acit Tds, No.30, Ulsoor Road, Bengaluru North, Circle – 2(1), Bengaluru – 560 042. Bengaluru. Pan : Aaecm 5394 G Appellant Respondent Assessee By : Shri. Narendra Kumar Jain, Advocate Revenue By : Dr. Manjunath Karkihalli, Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 05.07.2022 Date Of Pronouncement : 12.07.2022

For Appellant: Shri. Narendra Kumar Jain, AdvocateFor Respondent: Dr. Manjunath Karkihalli, CIT(DR)(ITAT), Bengaluru

Section 131Section 133ASection 194ASection 2Section 201Section 201(1)Section 250

this new section tax deduction at source is permissible in respect of interest on compensation on compulsory acquisition of land and also accrued on enhanced compensation under section 18 of the Land Acquisition Act where the total income assessable to tax exceeds taxable limit, interest accrued after order from ... date of delivery of possession of land till the date of order granting enhanced compensation and its yearwise break-up shall be taken into account. This section has to be read in conjunction with section 204 which furnishes the meaning of "person responsible for paying". Where land is compulsorily acquired

Tata Communications Ltd, Mumbai vs. DCIT 1(3), Mumbai

In the result, the appeals of the assessee are allowed

ITA 1014/MUM/2015[2004-05]Status: DisposedITAT Mumbai31 May 2022AY 2004-05

Bench: Shri Vikas Awasthy & Shri Amarjit Singhita No.1014/Mum/2015 Tata Communication Vs. Deputy Commissioner Of Limited, (Formerly Videsh Income Tax-1(3) Sanchar Nigan Limited) Aayakar Bhavan, Videsh Sanchar Bhavan, Maharshi Karve Road, M.G. Road, Fort, Mumbai – 400 020 Mumbai – 400 001 स्थायी लेखा सं./ जीआइआर सं./ Pan/Gir No: Aaacv2808C Appellant .. Respondent

For Appellant: J.D. Mistry &For Respondent: Achal Sharma &

Section 143(3)Section 147Section 148Section 234DSection 35D

Electric Supply Co. Ltd. Vs. ITO, Company Circle –X, New Delhi, held that there was no lack of disclosure by assessee inasmuch issue of enhanced compensation was settled only when Supreme Court pronounced its 3 Appeal, Tata Communication Ltd. Vs. DCIT-1(3) 9 AYs.2003-04 2005-06 judgment ... receipt of enhanced compensation assessee had disclosed same in its return for that year. The Hon’ble Bombay High Court in the case of Sterling & Wilson P. Ltd. Vs. ACIT, Central-14(3)(2) held that where assessee filed details regarding claim of depreciation on goodwill in original assessment proceedings

Tata Communications Ltd, Mumbai vs. DCIT 1(3), Mumbai

In the result, the appeals of the assessee are allowed

ITA 5185/MUM/2014[2005-06]Status: DisposedITAT Mumbai31 May 2022AY 2005-06

For Appellant: J.D. Mistry &For Respondent: Achal Sharma &

Section 143(3)Section 147Section 148Section 234DSection 35D

Tata Communicatiosn Ltd ( Formerly Videsh Sanchar Nigam Ltd), Mumbai vs. DCIT 1(3), Mumbai

In the result, the appeals of the assessee are allowed

ITA 4486/MUM/2013[2003-04]Status: DisposedITAT Mumbai31 May 2022AY 2003-04

For Appellant: J.D. Mistry &For Respondent: Achal Sharma &

Section 143(3)Section 147Section 148Section 234DSection 35D

Mr.Nanjunda Renuka Aradhya, Bangalore vs. The Assistant Commissioner of Income Tax Circle-7(2)(1), Bangalore

In the result, appeal of the assessee is treated as partly allowed for statistical purposes

ITA 397/BANG/2018[2010-11]Status: DisposedITAT Bangalore31 May 2022AY 2010-11

Bench: Shri Chandra Poojari, Am & Shri George George K, Jm

For Appellant: Sri.Nitish Ranjan, CAFor Respondent: Smt.Priyadarshini Basaganni, Addl.CIT-DR

Section 143(2)Section 194CSection 194C(2)Section 206ASection 40Section 43B

payments, notwithstanding any right arising as a consequence to such payments. Sub-clause (b) talks of interest received by the assessee on compensation or enhanced compensation, which is not relatable to the issue before us. The aforesaid provisions of section 145A of the Act have been substituted by the Finance ... gains of business or profession and no clause (b) was provided i.e. in respect of income received by the assessee on compensation or on enhanced compensation. In view of the amended provisions of the Act, which came into effect from 01.04.1999 for valuing the purchases and sales of goods

Shri Muniyappa Narashimaiah, Bangalore vs. Income Tax Officer, Ward- 6(2)(3), Bangalore

In the result, appeal of the assesseeis treated as allowed for statistical purposes

ITA 26/BANG/2021[2013-14]Status: DisposedITAT Bangalore27 Apr 2022AY 2013-14

Bench: Shri N. V. Vasudevan & Ms. S. Padmavathyassessment Year :2013-14 Shri. Muniyappa Narashimaiah, Vs. Ito, No.120/1, Hessarghatta Main Road, Ward – 6(2)(3), Bhuvaneshwari Nagar, T Dasarahalli, Bengaluru. Bengaluru – 560 057. Pan : Abmpn 5245 R Appellant Respondent Assessee By : Shri. Mahesh Kumar, Advocate Revenue By : Shri. Priyadarshini Mishra, Addl. Cit(Dr)(Itat), Bengaluru. Date Of Hearing : 25.04.2022 Date Of Pronouncement : 27.04.2022 O R D E R Per N. V. Vasudevan: . V. Vasudevan

For Appellant: Shri. Mahesh Kumar, AdvocateFor Respondent: Shri. Priyadarshini Mishra, Addl. CIT(DR)(ITAT), Bengaluru

Section 10(37)Section 143(3)Section 263Section 54Section 54B

previous year relevant to Assessment Year 2012-13. In so far as Assessment Year 2013-14 is concerned, the assessee received enhanced compensation of Rs.44,77,379/-. The assessment for Assessment Year 2012-13 was concluded by the AO on 30.09.2016. In so far Assessment Year 2013-14 is concerned ... assessee’s land has been compulsorily acquired by the government for a public purpose. The assessee wants to claim relief in respect of enhanced compensation which he received in Assessment Year 2013-14. The impugned order of the CIT(A) is dated 30.11.2017 and as we have already observed

Shri. Boraiah Shivananjaiah, Bengaluru vs. Assistant Commissioner of Income Tax, Circle- 3(2)(1), Bangalore

In the result, appeal of the assessee is treated as partly allowed for statistical purposes

ITA 680/BANG/2020[2014-15]Status: DisposedITAT Bangalore11 Apr 2022AY 2014-15

Bench: Shri Chandra Poojari, Am & Smt. Beena Pillai, Jm Boraiah Shivananjaiah, Asst.Commissioner Of K. Janatha Colony, Income Tax, Bidadi Hobli, Vs. Circle - 3(2)(1) Ramnagara Dist., Bengaluru Bengaluru Pan – Anaps2762E Appellant Respondent

For Respondent: Assessee by Sri Sreehari Kutsa, Advocate

Section 143(3)Section 234ASection 250Section 36(1)(va)Section 43ASection 43B

M/S Maharishi Construction Pvt Ltd., Mumbai vs. ITO 12(3)(3), Mumbai

In the result, this appeal by the assessee is partly allowed

ITA 916/MUM/2020[2012-13]Status: DisposedITAT Mumbai17 Mar 2022AY 2012-13

Bench: Shri Shamim Yahya

type of immovable property. Any person, who is responsible for paying to a resident, any sum, being in the nature of compensation or the enhanced compensation or the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being in force, of any immovable

Perfect Thread Mills Ltd, Mumbai vs. ITO WD 8(2)(4), Mumbai

In the result, appeal filed by the assessee is allowed

ITA 349/MUM/2011[2007-08]Status: DisposedITAT Mumbai24 Feb 2022AY 2007-08

Bench: S. Rifaur Rahman, Hon'Ble & Shri Amarjit Singh, Hon'Ble&

For Appellant: Department by Shri Mehul Jain

perfecting title is also not acceptable in view of above decisions. (iii) Regarding the contention that further appeals are pending and the receipt of enhanced compensation cannot be assessed, it is seen that in Dy. CIT vs. Padarna Prakash (HUF) (2007) (2008) [288 ITR 1] (Del Trib), the land ... before the civil court to claim higher compensation. The civil court (Addl. Distt. Judge) awarded higher compensation along with interest in all the cases. Enhanced compensation along with interest and certain other amounts was received by the assessee was assessed on receipt basis in terms of section