Section 45(5) of the Income Tax Act
Income-tax Act, 2025: s.67
Section 45(5) falls under section 45 of the Income-tax Act, 1961, which corresponds to section 67 (Capital gains) of the Income-tax Act, 2025.
Read section 67 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 45(5) is CIT v. Ghanshyam (HUF) (315 ITR 1), cited in 363 of the 147 judgments on BharatTax that turn on this section.
Leading authorities on Section 45(5)
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.
Interest income is taxable on either an accrual or cash basis, determined by accounting principles. This method was applicable prior to legislative changes that simplified the taxation of interest income.
The judgment in Kotak Mahindra Co. Ltd. does not appear to be directly cited for a specific income tax proposition in the provided passages. The passages merely list it as one of several cases cited in subsequent judgments, without detailing its specific contribution to the legal reasoning.
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.
An order by the Supreme Court dismissing a Special Leave Petition (SLP) at the threshold without detailed reasons does not constitute a declaration of law or a binding precedent. Such dismissal in limine offers no legal assistance.
A mere audit objection, by itself, is insufficient to infer that an Assessing Officer's order is erroneous or prejudicial to the interest of the Revenue for the purpose of initiating revisional proceedings.
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).
The Principal Commissioner of Income Tax cannot exercise revisional jurisdiction under Section 263 if the Assessing Officer has taken one of two possible views on a debatable issue during assessment proceedings.
Mandatory provisions in taxation statutes must be strictly complied with. Non-compliance with a mandatory provision results in the cancellation of any concession granted.
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.