Madhav Pandharinath Kande, Latur V. Income-tax Officer ,

ITA 2584/PUN/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 9551 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 21-06-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 15-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital receipt; Condonation of delay; Set aside
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE , , , BEFORE SHRI ANIL CHATURVEDI, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 2584 /P U N/201 6 / ASSESSMENT YEAR : 20 1 3 - 14 SHRI MADHAV PANDHARINATH KANDE, A/P DHANORA, TAL. - AHMEDPUR, LATUR 413515 PAN : COCPK7746F ....... / APPELLANT / V/S. THE INCOME TAX OFFICER, WARD 3, LATUR / RESPONDENT ASSESSEE BY : SHRI BHARAT SHAH REVENUE BY : SHRI RAJESH GAWALI / DATE OF HEARING : 21 - 06 - 2019 / DATE OF PRONOUNCEMENT : 01 - 0 7 - 2019 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS) - 2, AURANGABAD DATED 27 - 05 - 2016 FOR THE ASSESSMENT YEAR 2013 - 14. 2 ITA NO .2584/PUN/2016, A.Y. 2013 - 14 2. THE APPEAL IS TIME BARRED BY 112 DAYS. THE ASSESSEE HAS FILED AN APPLICATION SEEKING CONDONATION OF DELAY SUPPORTED BY AN AFFIDAVIT. WE HAVE EXAMINED THE APPLICATION AND THE AFFIDAVIT FILED BY THE ASSESSEE . A PERUSAL OF THE AFFIDAVIT SHOWS THAT THE DELAY IN FILING OF THE APPEAL HAS BEEN ATTRIBUTED TO MEDICAL EXIGENCIES. IN SUPPORT THE ASSESSEE HAS ALSO FILED MEDICAL CERTIFICATE. THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF RAM NATH SAO @ RAM NATH SAHU AND OTHERS VS. GOBARDHAN SAO AND OTHERS REPORTED AS 2002 AIR 1201 HAS HELD THAT ACCEPTANCE OF EXPLANATION FURNISHED SEEKING CONDONATION OF DELAY SHOULD BE THE RULE AND REFUSAL AN EX CEPTION, MORE SO WHEN NO NEGLIGENCE OR INACTION OR WANT OF BONAFIDE CAN BE IMPUTED TO THE DEFAULTING PARTIES. TAKING A PEDANTIC AND HYPER TECHNICAL VIEW OF THE MATTER, THE EXPLANATION FURNISHED SHOULD NOT BE REJECTED WHEN STAKES ARE HIGH AND/OR ARGUABLE P OINTS OF FACTS AND LAW ARE INVOLVED IN THE CASE, CAUSING ENORMOUS LOSS AND IRREPARABLE INJURY TO THE PARTY AGAINST WHOM THE LIS TERMINATES EITHER BY DEFAULT OR INACTION. THE HONBLE APEX COURT IN VARIOUS OTHER DECISIONS HAS TAKEN SIMILAR VIEW IN LIBERALLY ACCEPTING THE EXPLANATION FURNISHED BY THE ASSESSEE FOR CONDONING THE DELAY IN FILING OF APPEAL. THUS, IN VIEW OF THE LAW LAID DOWN BY THE HONBLE APEX COURT AND THE FOR REASONS STATED IN THE AFFIDAVIT BY THE ASSESSEE/APPELLANT, THE DELAY OF 112 DAYS IN FILING OF APPEAL IS CONDONED. THE APPEAL IS ADMITTED TO BE HEARD AND DISPOSED OF ON MERITS. 3. SHRI BHARAT SHAH APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS AN AGRICULTURIST. THE LAND OF THE ASSESSEE WAS ACQUIRED AND THE ASSESSEE RECEIVED COMPENSATION OF RS.50,78,948/ - AND INTEREST U/S. 28 OF LAND ACQUISITION ACT ( HEREINAFTER REFERRED TO AS THE L.A. ACT) AMOUNTING TO RS.1,14,17,198/ - . THUS, THE TOTAL COMPENSATION RECEIVED BY THE ASSESSEE ON ACCOUNT OF ACQUISITION OF LAND IS RS.1 ,64,96,146/ - . THE LD. 3 ITA NO .2584/PUN/2016, A.Y. 2013 - 14 AR SUBMITTED THAT THE ASSESSING OFFICER HELD THAT THE INTEREST RECEIVED U/S. 28 OF THE L.A. ACT IS TAXABLE AND DENIED THE EXEMPTION CLAIMED BY THE ASSESSEE U/S. 10(37) OF THE ACT IN RESPECT OF INTEREST RECEIVED U/S. 28 OF THE L.A. AC T. HOWEVER, THE ASSESSING OFFICER GRANTED BENEFIT OF DEDUCTION U/S. 57(IV) OF THE ACT TO THE TUNE OF 50% OF THE INTEREST RECEIVED ON ENHANCED COMPENSATION AND MADE ADDITION O F THE REMAINING AMOUNT OF INTEREST I.E. RS.57,08,599/ - AS TAXABLE U/S. 56(2)(VIII ) OF THE ACT. 3.1 AGGRIEVED BY THE ASSESSMENT ORDER DATED 18 - 02 - 2016, THE ASSESSEE FILED APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) GRANTED PARTIAL RELIEF TO THE ASSESSEE AND DIRECTED THE ASSESSING O FFICER TO CONSIDER AMOUNT OF INTEREST THAT HAS BEEN ACTUALLY RECEIVED BY THE ASSESSEE. THUS, THE ASSESSEE GOT RELIEF TO THE EXTENT OF INTEREST DUE BUT NOT RECEIVED. 3.2 THE LD. AR SUBMITTED THAT THE INTEREST RECEIVED U/S. 28 OF THE L.A. ACT IS CAPITAL IN NATURE AND HENCE IS NOT TAXABLE. IN SUPPORT OF HIS SUBMISSIONS THE LD. AR PLACED RELIANCE ON THE DECISION OF PUNE BENCH OF TRIBUNAL IN THE CASE OF DNYANOBA SHAJIRAO JADHAV VS. INCOME TAX OFFICER IN ITA NO. 168/PUN/2016 FOR THE ASSESSMENT YEAR 2011 - 12 D ECIDED ON 29 - 01 - 2018. THE LD. AR IN SUPPORT OF HIS CONTENTION THAT THE INTEREST THAT IS SUBJECT MATTER OF DISPUTE WAS RECEIVED U/S. 28 OF THE L.A. ACT , PLACED ON RECORD COPY OF THE JUDGMENT PASSED BY CIVIL JUDGE , SENIOR DIVISION, AHMEDPUR DATED 03 - 03 - 200 8 AND THE STATEMENT DRAWN BY LAND ACQUISITION COLLECTOR, URNA PROJECT, LATUR. 4. ON THE OTHER HAND SHRI RAJESH GAWALI REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED THE IMPUGNED ORDER. THE LD. DR SUBMITTED THAT THE 4 ITA NO .2584/PUN/2016, A.Y. 2013 - 14 INTEREST RECEIVED BY THE ASSESSEE U/ S. 28 OF THE L.A. ACT IS TAXABLE. THE LD. DR SUBMITTED THAT THE AUTHORITIES BELOW HAVE ALLOWED RELIEF TO THE ASSESSEE TO THE EXTENT THE ASSESSEE WAS ELIGIBLE UNDER THE PROVISIONS OF THE ACT. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW . THE ASSESSEE IN GROUNDS OF APPEAL HAS RAISED AS MANY AS 7 GROUNDS ASSAILING THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). HOWEVER, ALL THE GROUNDS RAISED IN APPEAL ARE DIRECTED TOWARDS TH E SOLITARY ISSUE OF ADDITION MADE IN RESPECT OF INTEREST RECEIVED BY THE ASSESSEE U/S. 28 OF THE L.A. ACT ON ACCOUNT OF COMPULSORY ACQUISITION OF LAND. THE CONTENTION OF THE ASSESSEE IS THAT THE INTEREST RS.1,14,17,198/ - RECEIVED BY THE ASSESSEE U/S. 28 O F THE L.A. ACT IS CAPITAL RECEIPT AND HENCE, NOT LIABLE TO BE TAXED. THE ASSESSEE HAS FILED STATEMENT FROM THE OFFICE OF DEPUTY COLLECTOR, LAND ACQUISITION INDICATING THAT THE ASSESSEE HAS RECEIVED INTEREST U/S. 28 OF THE L.A. ACT AMOUNTING TO RS.1,14,17, 198/ - , APART FROM COMPENSATION ON ACCOUNT OF ACQUISITION OF LAND. 6. THE CO - ORDINATE BENCH OF TRIBUNAL IN THE CASE OF DNYANOBA SHAJIRAO JADHAV VS. INCOME TAX OFFICER (SUPRA) AFTER CONSIDERING THE JUDGMENT OF HONBLE SUPREME COURT OF INDIA IN THE CASE OF COMMISSIONER OF INCOME TAX VS. GHANSHYAM (HUF) REPORTED AS 315 ITR 1 AND IN THE CASE OF BIKRAM SINGH & ORS. VS. LAND ACQUISITION COLLECTOR & ORS. REPORTED AS 224 ITR 551 HELD THAT THE INTEREST AWARDED U/S. 28 OF THE L.A. ACT IS IN THE NATURE OF SOLATIUM A ND IS INTEGRAL PART OF COMPENSATION. THE SAID INTEREST IS IN THE NATURE OF CAPITAL RECEIPT AND HENCE NOT EXIGIBLE TO TAX UNDER THE PROVISIONS OF INCOME TAX ACT. WHEREAS, INTEREST RECEIVED U/S. 34 OF THE L.A. ACT IS ON ACCOUNT DELAYED PAYMENT OF COMPENSAT ION AND IS A REVENUE RECEIPT. 5 ITA NO .2584/PUN/2016, A.Y. 2013 - 14 THOUGH THE AMOUNT RECEIVED U/S. 28 AND U/S. 34 OF THE L.A. ACT ARE TERMED AS INTEREST HOWEVER THEY STAND ON DIFFERENT PEDESTAL IN SO FAR AS THE PROVISIONS OF INCOME TAX ACT ARE CONCERNED. 7. IN THE INSTANT CASE, IT IS NOT DISPUTED BY THE REVENUE THAT THE AMOUNT OF RS.1,14,17,198/ - RECEIVED BY THE ASSESSEE AS INTEREST IS U/S. 28 OF THE L.A. ACT. THEREFORE, ENTIRE AMOUNT IS EXEMPT FROM TAX BEING CAPITAL RECEIPT. WE FIND MERIT IN THE CONTENTION OF THE ASSESSEE. HENCE, THE IMPUGNED ORDER IS SET ASIDE AND THE APPEAL OF ASSESSEE IS ALLOWED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON MONDAY, THE 01 ST DAY OF J U LY, 2019. SD/ - SD/ - ( / ANIL CHATURVEDI ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 01 ST JU LY, 2019 . RK / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 2, AURANGABAD 4. THE PR. COMMISSIONER OF INCOME TAX - 2, AURANGABAD 5 . , , , / DR, ITAT, A BENCH, PUNE. 6 . / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE