ACIT, Faridabad V. Sh. The New Friends Co- Operative Housing Building Society Ltd., Faridabad

ITA 1959/DEL/2012

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97153 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-09-2015
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: H
• Next Hearing Date: 31-08-2015
• Assessment Year: 2003-2004
• Appeal Filed On: 27-04-2012
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: J P C CHANDREKAR
• Keywords: Revised return
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SH. N. K. SAINI, AM AND SMT. BEENA A. PILL AI ITA NO. 1959/DEL./2012 : ASSTT. YEAR : 2003-04 ACIT CIRCLE II, B-BLOCK, CGO COMPLEX, NH-IV FARIDABAD NEW DELHI VS THE NEW FRIENDS CO-OPERATIVE HOUSING BUILDING SOCIETY LTD. 5-NH/33, NIT FARIDABAD T- 203 NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. APPELLANT BY : SH. J. P.C. CHANDREKAR, SR. DR RESPONDENT BY : SH. VIJAY GUPTA, C.A. DATE OF HEARING : 31.08.2015 DATE OF PRONOUNCEMEN T : 02.09.2015 ORDER PER N.K. SAINI, A.M. THIS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORD ER DATED 09.02.2012 OF THE LD. CIT(A)-FARIDABAD. 2. THE DEPARTMENT HAS RAISED AS MANY AS SIX GROUNDS BUT THE ONLY GRIEVANCE RELATES TO THE TAXABILITY OF INTEREST REC EIVED U/S 28 OF THE LAND ACQUISITION ACT, 1894, AMOUNTING TO RS. 68,13,990/ -. 3. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE IS A COOPERATIVE SOCIETY INCORPORATED WITH THE MAIN OBJECTS OF ACQUIRING LAN D AND TO CONSTRUCT HOUSES THEREON FOR ITS MEMBERS. THE LAND PURCHASED BY THE ASSESSEE SOCIETY WAS COMPULSORILY ACQUIRED BY THE HARYANA GOVERNMENT AND THE ASSESSEE RECEIVED ITA NO.1959/DEL/2012 2 INTEREST OF RS. 68,13,990/- ON THE ENHANCED COMPENS ATION. THE ASSESSEE IN HIS REVISED RETURN DID NOT INCLUDE INTEREST ON ENHANCED COMPENSATION, HOWEVER, THE AO ADDED A SUM OF RS. 63,24,834/- (RS. 68,13,990 EXPENSES OF RS.4,89,156/- ) AS INCOME FROM OTHER SOURCES BEING INTEREST AC CRUED ON ENHANCED COMPENSATION, TAXABLE IN THE YEAR UNDER CONSIDERATI ON. 4. BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTE R TO THE LD. CIT(A) WHO DELETED THE ADDITION BY OBSERVING THAT THE INTEREST RECEIVED BY THE ASSESSEE U/S 34 OF LAND ACQUISITION ACT, PERTAINED TO THE PERIO D PRIOR TO THIS ASSESSMENT YEAR. NOW THE DEPARTMENT IS IN APPEAL. 5. THE LD. DR SUPPORTED THE ORDER OF THE AO AND FURTHER SUBMITTED THAT THE INTEREST ON THE COMPENSATION WAS RECEIVED BY THE AS SESSEE U/S 28 AND NOT U/S 34 OF THE LAND ACQUISITION ACT, 1894. THEREFORE, IT WA S TAXABLE IN THE YEAR OF THE RECEIPT. RELIANCE WAS PLACED ON THE JUDGMENT OF TH E HONBLE SUPREME COURT IN THE CASE OF CIT VS. GHANSHYAM (HUF) REPORTED AT 31 5 ITR1. THE LD. COUNSEL FOR THE ASSESSEE IN HIS RIVAL SUBMISSIONS, ALTHOUGH SUPPORTED THE ORDER OF THE LD. CIT(A) HOWEVER, CONCEDED THAT THE INTEREST WAS REC EIVED BY THE ASSESSEE U/S 28 OF THE LAND ACQUISITION ACT, 1894. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH T HE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN T HE PRESENT CASE, IT IS NOTICED THAT THIS ISSUE HAS NOW BEEN SETTLED BY THE HONBLE APEX COURT IN THE CASE OF CIT VS. GHANSHYAM (HUF) (2009), 315 ITR 1 WHEREIN I T HAS BEEN HELD AS UNDER :- INTEREST IS DIFFERENT FROM COMPENSATION. INTEREST PAID ON THE EXCESS AMOUNT UNDER SECTION 28 OF THE LAND ACQUISIT ION ACT, 1894, DEPENDS UPON A CLAIM MADE BY THE PERSON WHOSE LAND IS ACQUIRED, WHEREAS INTEREST UNDER SECTION 34 IS FOR DELAY IN M AKING PAYMENT; IT POSTULATES AWARD OF INTEREST AT 9 PER CENT PER ANNU M FROM THE DATE ITA NO.1959/DEL/2012 3 OF TAKING POSSESSION ONLY UNTIL IT IS PAID OR DEPOS ITED. INTEREST UNDER SECTION 28 WOULD INCLUDE WITHIN ITS AMBIT BOTH THE MARKET VALUATION AND THE SOLATIUM AND IS PART OF THE AMOUNT OF COMPE NSATION WHEREAS INTEREST UNDER SECTION 34 IS ONLY FOR DELAY IN MAKING PAYMENT AFTER THE COMPENSATION AMOUNT IS DETERMINED . INTEREST UNDER SECTION 28 IS A PART OF THE ENHANCED VALUE OF THE LAND, WHICH IS NOT THE CASE IN THE MATTER OF PAYMENT OF INTERES T UNDER SECTION 34. 7. IN THE INSTANT CASE, IT IS AN ADMITTED FAC T THAT THE INTEREST WAS RECEIVED BY THE ASSESSEE U/S 28 AND NOT U/S 34 OF THE LAND ACQU ISITION ACT, 1894, THEREFORE, IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE SUPR EME COURT, IT WAS TAXABLE IN THE YEAR UNDER CONSIDERATION. IN THAT VIEW OF THE MATTER, WE, SET ASIDE THE IMPUGNED ORDER OF THE LD. CIT(A) AND RESTORE THE OR DER OF THE AO. 8. IN THE RESULT APPEAL OF THE DEPARTMENT IS ALLOWED. (ORDER PRONOUNCED IN THE COURT ON 02/09/2015 ). SD/- SD/- (BEENA A. PILLAI) (N. K. SAINI) JUDICIAL MEMBER ACCOUNTANT ME MBER DATED: 02 / 0 9/2015 *BINITA* COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(APPEALS) 5.DR: ITAT BY ORDE R ASSTT. REGISTE R ITA NO.1959/DEL/2012 4 DATE INITIAL 1. DRAFT DICTATED ON 31.08.2015 2. DRAFT PLACED BEFORE AUTHOR 1.09.2015 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.