ITO, Chandigarh V. Sh. Pawan Giri, Manimajra

ITA 405/CHANDI/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68375 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-08-2013
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 11-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMARVEER SINGH
• Section: 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI T.R. SOOD, A.M AND MS. SUSHMA CHOWLA, JM ITA NO. 405/CHD/2013 ASSESSMENT YEAR : 2008-09 I.T.O. WARD 3(4) V PAWAN GIRI CHANDIGARH 1589/1 MANIMAJRA AEBPG 7712 C (APPELLANT) (RESPONDENT) APPELLANT BY SHRI AMARVEER SINGH RESPONDENT BY: SHRI AJAY JAIN DATE OF HEARING 17.7.2013 DATE OF PRONOUNCEMENT 2.8.2013 O R D E R PER T.R.SOOD, A.M THIS APPEAL IS DIRECTED AGAINST THE ORDER DATED 29. 1.2013 OF THE LD. CIT(A), CHANDIGARH. 2 IN THIS APPEAL THE REVENUE HAS RAISED FOLLOWING G ROUNDS: 1 WHETHER ON FACTS AND CIRCUMSTANCES THE LD. CIT(A ) IS JUSTIFIED IN ALLOWING THE APPEAL, AS THE APPELLANT ASSESSEE HAD FAILED TO FURNISH THE DETAILS OF INTEREST ON ENHAN CED COMPENSATION AND INTEREST ON DELAYED PAYMENT OF COMPENSATION, SO AS TO DETERMINE THE TAXABILITY IN THE HANDS OF THE ASSESSEE AND THEREFORE THE ADDITION OF RS. 2 1,62,124/- MADE BY THE AO DESERVES TO BE SUSTAINED. 2. WHETHER ON FACTS AND CIRCUMSTANCES THE LD. CIT(A ) IS JUSTIFIED IN DIRECTING THE ASSESSING OFFICER TO OBT AIN THE DETAILS OF INTEREST FROM THE APPELLANT AND TAX THE SAME AS PER THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE O F CIT, FARIDABAD VS GHANSHYAM (HUF) (315 ITR 1) WHEN THE APPELLANT HAS NOT GIVEN THE DETAILS AND CONSEQUENTL Y THE LD. CIT(A) HAS ALLOWED THE APPEAL IN FAVOUR OF THE APPE LLANT. 3. AFTER HEARING BOTH THE PARTIES WE FIND THAT DURI NG ASSESSMENT PROCEEDINGS THE AO NOTICED THAT THE ASS ESSEE HAS RECEIVED A SUM OF ENHANCED COMPENSATION AMOUNTING T O RS. 67,25,151/- FROM LAND ACQUISITION OFFICER, URBAN E STATE, 2 PANCHKULA (HARYANA). THIS INCOME WAS CLAIMED AS EX EMPT U/S 10(37). ON ENQUIRY IT WAS SUBMITTED THAT THE SAID E NHANCED COMPENSATION WAS RECEIVED ON ACCOUNT OF COMPULSORY ACQUISITION OF LAND SITUATED NEAR TO SANTOSHI MATA MANDIR, SWASTIK VIHAR, SECTO4 4. PANCHKULA. ON FURTHER ENQ UIRY IT WAS ASKED WHY THE INTEREST RECEIVED AMOUNTING TO RS. 21 ,62,124/- SHOULD NOT BE TAXED. IN RESPONSE IT WAS SUBMITTED THAT ENHANCED COMPENSATION WAS RECEIVED ON ACQUISITION OF AGRICULTURAL LAND AND THE SAME WAS EXEMPT. THE AS SESSING OFFICER WAS NOT SATISFIED WITH THE EXPLANATION AND THEREFORE, INTEREST RECEIVED ON ENHANCED COMPENSATION WAS ADDE D TO THE INCOME OF THE ASSESSEE. 4 ON APPEAL, IT WAS CONTENDED THAT INTEREST U/S 28 OF THE LAND ACQUISITION ACT, 1894 IS TO BE TREATED AS PAR T OF THE COMPENSATION AS PER THE DECISION OF HON'BLE SUPREME COURT IN CASE OF CIT V. GHANSHYAM (HUF), 315 ITR 1 (S.C) AND THEREFORE, THE SAME WAS EXEMPT FROM TAX U/S 19(37) OF THE ACT. 5 THE LD. CIT(A) AFTER CONSIDERING THE SUBMISSIONS OBSERVED THAT THE HON'BLE SUPREME COURT REFERRED TO TWO TYPE S OF INTEREST AND INTEREST U/S 28 OF LAND ACQUISITION A CT WAS EXEMPT WHEREAS INTEREST RECEIVED U/S 34 IS TAXABLE. IN THIS BACKGROUND HE REMITTED THE MATTER TO THE FILE OF AS SESSING OFFICER FOR VERIFICATION OF THE COMPONENTS OF THE I NTEREST AND THEN DECIDE THE ISSUE IN THE LIGHT OF THE DECISION OF HON'BLE SUPREME COURT IN CASE OF CIT V. GHANSHYAM (HUF) (SU PRA). 6 BOTH THE PARTIES WERE HEARD IN DETAIL. 7 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND THAT THIS ISSUE HAS BEEN ADJUDICATED BY THE HON'BLE SUPREME C OURT AND 3 DISCUSSED REGARDING VARIOUS COMPONENTS OF INTEREST AND IT WAS OBSERVED AS UNDER: 315 ITR 2 - INTEREST IS DIFFERENT FROM COMPENSATI ON. INTEREST PAID ON THE EXCESS AMOUNT UNDER SECTION 28 OF THE LAND ACQUISITION ACT, 1894, DEPENDS UPON A CLAIM MA DE BY THE PERSON WHOSE LAND IS ACQUIRED, WHEREAS INTEREST UND ER SECTION 34 IS FOR DELAY IN MAKING PAYMENT; IT POSTULATES AW ARD OF INTEREST AT 9 PER CENT, PER ANNUM FROM THE DATE OF TAKING POSSESSION ONLY UNTIL IT IS PAID OR DEPOSITED. INTE REST UNDER SECTION 28 WOULD INCLUDE WITHIN ITS AMBIT BOTH THE MARKET VALUATION AND THE SOLATIUM AND IS PART OF THE AMOUN T OF COMPENSATION WHEREAS INTEREST UNDER SECTION 34 IS O NLY FOR DELAY IN MAKING PAYMENT AFTER THE COMPENSATION AMOU NT IS DETERMINED. INTEREST UNDER SECTION 28 IS A PART OF THE ENHANCED VALUE OF THE LAND, WHICH IS NOT THE CASE I N THE MATTER OF PAYMENT OF INTEREST UNDER SECTION 34. THE ABOVE MAKES IT CLEAR THAT INTEREST RECEIVED U/S 28 OF LAND ACQUISITION ACT IS TO BE TREATED AS PART OF THE CO MPENSATION AND THEREFORE, IS EXEMPT. HOWEVER, INTEREST U/S 3 4 IS TOWARDS DELAY IN PAYMENT AND THEREFORE, THE SAME IS TO BE TAXED. THESE DETAILS ARE NOT AVAILABLE BEFORE US. WE FURT HER FIND THAT SINCE THE LD. CIT(A) HAS ADJUDICATED THE ISSUE AND REMITTED THE MATTER TO THE FILE OF ASSESSING OFFICER ONLY FOR VE RIFICATION OF THE COMPONENTS OF INTEREST U/S 28 & 34, THEREFORE, NO SERIOUS INTERFERENCE IS REQUIRED IN THE ORDER OF THE LD. CI T(A). WE SIMPLY SEND THE MATTER BACK TO THE FILE OF ASSESSIN G OFFICER FOR VERIFYING THE COMPONENTS OF INTEREST AFTER OBTAININ G DETAILS FROM THE ASSESSEE AND THEN TREAT THE SAME AS PER THE DEC ISION OF HON'BLE SUPREME COURT IN CASE OF CIT V. GHANSHYAM ( HUF) (SUPRA). 8 IN THE RESULT, APPEAL OF THE REVENUE IS ALLOWED F OR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 2.8.2013 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 2.8.2013 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 4