Umed Singh, Gurgaon V. ITO, Gurgaon

ITA 5777/DEL/2016

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7512 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 09-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: REENA N SINGH
• Section: 56; 28

Judgement Text

1 , , IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G, NEW DELHI , . , ) BEFORE MS. SUSHMA CHOWLA, VICE PRESIDENT & DR. B.R.R. KUMAR, ACCOUNTANT MEMBER . / ITA NO.5777/DEL/2016 * * / ASSESSMENT YEAR 2013-14 SH. UMMED SINGH, S/O-DEEP CHAND, YPS RANA & ASSOCIATES, 205-208, DEEP PLAZA, NEAR CIVIL COURT, GURGAON, HARYANA PAN-BDRPS8667Q .......... /APPELLANT VS ITO, WARD-4(4), GURGAON . / RESPONDENT . / ITA NO.5774/DEL/2016 * * / ASSESSMENT YEAR 2013-14 SH. SARDAR SINGH, S/O-DEEP CHAND, YPS RANA & ASSOCIATES, 205-208, DEEP PLAZA, NEAR CIVIL COURT, GURGAON, HARYANA PAN-BRRPS9656R .......... /APPELLANT VS ITO, WARD-4(4), GURGAON . / RESPONDENT ITA NO.5777/DEL/2016 & ORS. ASSESSMENT YEAR 2013-14 2 . / ITA NO.5775/DEL/2016 * * / ASSESSMENT YEAR 2013-14 SH. SANJAY, S/O-MOHAR SINGH, YPS RANA & ASSOCIATES, 205-208, DEEP PLAZA, NEAR CIVIL COURT, GURGAON, HARYANA PAN-BEFPS2691R .......... /APPELLANT VS ITO, WARD-4(4), GURGAON . / RESPONDENT AND . / ITA NO.5776/DEL/2016 * * / ASSESSMENT YEAR 2013-14 SH. GULVINDER, L/H OF LATE SH. MAHENDER SINGH, YPS RANA & ASSOCIATES, 205-208, DEEP PLAZA, NEAR CIVIL COURT, GURGAON, HARYANA PAN-DARPS0741C .......... /APPELLANT VS ITO, WARD-4(4), GURGAON . / RESPONDENT / APPELLANT BY : SH. REENA N. SINGH, ADVOCATE / RESPONDENT BY : SH. H.K. CHOUDHARY, CIT-DR. / DATE OF HEARING : 27.01.2020 / DATE OF PRONOUNCEMENT: 30.01.2020 ITA NO.5777/DEL/2016 & ORS. ASSESSMENT YEAR 2013-14 3 / ORDER PER SUSHMA CHOWLA, VP THIS BUNCH OF FOUR APPEALS FILED BY THE DIFFERENT ASSESSEES ARE AGAINST SEPARATE ORDERS OF CIT(A)-1, GURGAON, ALL DATED 24/ 06/2016 RELATING TO ASSESSMENT YEAR 2013-14. 2. THIS BUNCH OF APPEALS RELATING TO CONNECTED ASSE SSEE ON SIMILAR ISSUE WERE HEARD TOGETHER AND ARE BEING DISPOSED OFF BY T HIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. WE PROCEED TO DECIDE THE B UNCH OF APPEALS BY REFERRING TO THE FACTS AND ISSUE IN ITA NO.5777/DEL /2016. 3. BRIEFLY IN THE FACTS OF THE CASE, THE ASSESSEE HAD FURNISHED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1,16,750/-. THE ASSESSING OFFICER SELECTED THE CASE FOR SCRUTINY. A SHOW-CAUSE NOTICE WAS ISSU ED TO THE ASSESSEE IN RESPECT OF INTEREST OF RS.1,03,19,292/- RECEIVED FR OM DRO-CUM-LAC, GOVERNMENT OF HARYANA, WHICH WAS CLAIMED AS EXEMPT. THE ASSESSING OFFICER ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE SAID IN TEREST RECEIVED ON COMPENSATION OR ENHANCED COMPENSATION SHOULD NOT BE TAXED AS INCOME FROM OTHER SOURCES AND ALSO INTIMATED THAT DEDUCTION OF SUM EQUAL TO 50% WAS ALLOWABLE UNDER SECTION 57(IV) OF THE INCOME TAX AC T, 1961 (IN SHORT THE ACT). THE ASSESSEE FILED EXPLANATION IN THIS REGARD. THE ASSESSING OFFICER WAS OF THE VIEW THAT WHERE THE TAX HAS ALSO BEEN DEDUCTED AT S OURCE AND IN VIEW OF THE DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT , THE INTEREST RECEIVED ON COMPENSATION OR ENHANCED COMPENSATION SHALL BE DEEM ED TO BE INCOME OF THE ASSESSEE IN THE YEAR OF RECEIPT, SUBJECT TO DEDUCTI ON OF 50% UNDER SECTION ITA NO.5777/DEL/2016 & ORS. ASSESSMENT YEAR 2013-14 4 57(IV) OF THE ACT. ACCORDINGLY, SUM OF RS.51,59,646 /- WAS ADDED TO THE INCOME OF THE ASSESSEE. 4. THE LD. CIT(A) UPHELD THE ORDER OF THE ASSESSING OFFICER, AGAINST WHICH THE ASSESSEES ARE IN APPEAL BEFORE US. 5. THE LD. AR FOR THE ASSESSEE, AT THE OUTSET, POIN TED OUT THAT THE INTEREST RECEIVED ON COMPENSATION BY THE ASSESSEE WAS UNDER SECTION 28 OF THE LAND ACQUISITION ACT, WHICH IS TO BE CONSIDERED AS PART OF COMPENSATION AND NOT INTEREST FOR LATE PAYMENTS. IT WAS FURTHER POINTED OUT BY THE LD. AR FOR THE ASSESSEE THAT THIS ISSUE WAS SETTLED IN FAVOUR OF T HE ASSESSEE BY THE HONBLE SUPREME COURT IN UNION OF INDIA AND ORS. VS HARI SI NGH AND ORS. IN CIVIL APPEAL NO.15041 OF 2017 & ORS. THE LD. AR FOR THE A SSESSEE ALSO POINTED OUT THAT THE ASSESSEE ALSO BECAME A PARTY TO THE SAID P ETITION BY WAY OF WRIT PETITION (C) NO.590/2016 AND THE HONBLE SUPREME C OURT HAS DIRECTED TO TAKE INTO CONSIDERATION THE PROVISIONS OF SECTION 2 8 OF THE LAND ACQUISITION ACT AND THE LAW LAID DOWN BY THIS COURT IN COMMISSI ONER OF INCOME TAX, FARIDABAD VS GHANSHYAM (HUF) [2009] (8) SCC 412] IN ORDER TO ASCERTAIN WHETHER THE INTEREST GIVEN UNDER THE SAID PROVISION AMOUNTS TO COMPENSATION OR NOT. 6. THE LD. DR FOR THE REVENUE ON THE OTHER HAND, ST RONGLY RELIED ON THE ORDER OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF MANJET SINGH (HUF) KARTA MANJEET SINGH VS UNION OF INDIA A ND OTHERS IN CWP NO.15506 OF 2013, ORDER DATED 14/01/2014 AND STATED THAT AFTER THE DECISION OF THE HONBLE APEX COURT IN GHYANSHYAM (HUF) HAD H ELD THAT ELEMENT OF ITA NO.5777/DEL/2016 & ORS. ASSESSMENT YEAR 2013-14 5 INTEREST AWARDED UNDER SECTION 28 OF THE LAND ACQUI SITION ACT IS TO BE TAXED AS INCOME FROM OTHER SOURCES UNDER SECTION 56 OF TH E ACT IN THE YEAR OF RECEIPT. IT WAS POINTED OUT TO THE LD. DR FOR THE R EVENUE THAT VIDE PARA 19, THE HONBLE HIGH COURT HAVE CONCLUDED BY HOLDING AS UNDER:- 19. IT MAY ALSO BE NOTICED THAT AS REGARDS THE CLA IM OF THE ASSESSEE BASED ON PROVISIONS OF SECTION 10(37) AND 57(IV) OF THE ACT IS CONCERNED, THE ISSUE REQUIRES EXAMINATION BA SED ON FACTUAL MATRIX AND THEREFORE, THE PETITIONERS HAVE ALTERNAT IVE REMEDY TO PLEAD AND CLAIM THE BENEFIT THEREOF BEFORE THE ASSE SSING OFFICER IN ACCORDANCE WITH LAW. 7. THE LD. AR FOR THE ASSESSEE STRESSED THAT THE HO NBLE PUNJAB & HARYANA HIGH COURT IN MANJET SINGH (HUF) CASE HAS N OT DECIDED THE ISSUE BUT HAS KEPT THE SAME OPEN, WHEREAS IN THE CASE OF THE ASSESSEE, THE HONBLE SUPREME COURT IN THE LEAD CASE OF HARI SINGH & ORS (SUPRA) HAS DECIDED THE ISSUE OTHERWISE. 8. WE HAVE HEARD RIVAL CONTENTION AND PERUSED THE R ECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE ASSESSABILITY OF INTEREST RECEIVED ON COMPENSATION/ENHANCED COMPENSATION AWAR DED UNDER THE LAND ACQUISITION ACT. THE CASE OF THE ASSESSEE BEFORE US IS THAT THE AFORESAID INTEREST WHICH HAS BEEN RECEIVED BY HIM IS UNDER SE CTION 28 OF LAND ACQUISITION ACT AND THE SAME IS IN THE NATURE OF CO MPENSATION AND NOT IN THE NATURE OF INTEREST TO BE ASSESSED UNDER SECTION 56 OF THE ACT. HOWEVER, THE CASE OF THE REVENUE IS THAT THE INTEREST RECEIVED B Y THE ASSESSEE ON COMPENSATION/ENHANCED COMPENSATION IS ASSESSABLE UN DER SECTION 56 OF THE ACT, SUBJECT TO THE DEDUCTION ALLOWABLE UNDER SECTI ON 57(IV) OF THE ACT. ITA NO.5777/DEL/2016 & ORS. ASSESSMENT YEAR 2013-14 6 9. THE ASSESSEE BEFORE US HAD AGITATED THIS ISSUE B EFORE THE HONBLE SUPREME COURT BY WAY OF WRIT PETITION (SUPRA) WHICH WAS CLUBBED WITH SERIES OF CASES PENDING BEFORE THE HONBLE SUPREME COURT W ITH LEAD CASE IN UNION OF INDIA AND ORS VS HARI SINGH AND ORS. (SUPRA) THE HO NBLE APEX COURT WHILE DECIDING THIS ISSUE HAS HELD AS UNDER:- (2) WHILE DETERMINING AS TO WHETHER THE COMPENSATI ON PAID WAS FOR AGRICULTURAL LAND OR NOT, THE ASSESSING OFFICER (S) WILL KEEP IN MIND THE PROVISIONS OF SECTION 28 OF THE LAND ACQUI SITION ACT AND THE LAW LAID DOWN BY THIS COURT IN COMMISSIONER OF INCOME TAX, FARIDABAD VS GHANSHYAM (HUF) [2009 (8) SCC 412] IN ORDER TO ASCERTAIN WHETHER THE INTEREST GIVEN UNDER THE SAID PROVISION AMOUNTS TO COMPENSATION OR NOT. 10. THE HONBLE SUPREME COURT IN ITS EARLIER DEC ISION IN GHANSHYAM (HUF)(SUPRA) HAD HELD THAT THE INTEREST RECEIVED UN DER SECTION 28 OF THE LAND ACQUISITION ACT IS PART OF COMPENSATION AND THE INT EREST RECEIVED UNDER SECTION 34 OF THE LAND ACQUISITION ACT IS TO BE ASS ESSED AS OTHER INTEREST IN THE HANDS OF THE RECIPIENTS. THE ASSESSEE BEFORE US HAS PLACED THE EVIDENCE TO THE EFFECT THAT THE INTEREST HAS BEEN RECEIVED UNDE R SECTION 28 OF THE LAND ACQUISITION ACT. THE HONBLE SUPREME COURT HAD LAID DOWN THAT THE RATIO IN GHANSHYAM (HUF) CASE IS TO BE APPLIED IN ORDER TO A SCERTAIN WHETHER THE INTEREST RECEIVED BY THE ASSESSEE UNDER THE SAID PR OVISION AMOUNTS TO COMPENSATION OR NOT. IN VIEW THEREOF, WE DIRECT TH E ASSESSING OFFICER TO VERIFY THE CLAIM OF THE ASSESSEE THAT INTEREST HAD BEEN RE CEIVED UNDER SECTION 28 OF THE LAND ACQUISITION ACT AND IF THAT BE SO, THEN TH E SAME HAS TO BE TREATED AS COMPENSATION IN THE HANDS OF THE ASSESSEE AND IS NO T TAXABLE AS INTEREST UNDER SECTION 56 OF THE ACT. ACCORDINGLY, GROUND OF APPEAL RAISED BY THE ASSESSEE IS DECIDED IN FAVOUR OF THE ASSESSEE. ITA NO.5777/DEL/2016 & ORS. ASSESSMENT YEAR 2013-14 7 11. THE FACTS AND ISSUES IN ITA NO.5774/DEL/2016, I TA NO.5775/DEL/2016 AND ITA NO.5776/DEL/2016 ARE SIMILAR TO THE FACTS A ND ISSUE IN ITA NO.5777/DEL/2016 AND FOLLOWING THE SAME PARITY OF R EASONING, WE ALLOW THE CLAIM OF THE ASSESSEE IN ENTIRETY. 12. IN THE RESULT, ALL THE APPEALS FILED BY DIFFERE NT ASSESSEES ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH JANUARY 2020. SD/- SD/- (B.R.R.KUMAR) (SUSHMA CHOW LA) ) /ACCOUNTANT MEMBER /VICE PRESIDENT / DATED: 30 TH JANUARY, 2020 SHEKHAR, SR. P.S. / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT 2. / THE R ESPONDENT 3. ! ( ) / THE CIT(A) 4. # ! / THE PR. CIT 5. 6. , , ' / DR, ITAT, DELHI ) / GUARD FILE. / BY ORDER , -. , , ASSISTANT REGISTRAR, ITAT, DELHI