Appeal details
Counselvise Citation
[2018] 119 COUNSELVISE.COM (IT) 2248 (ITAT-CHANDIGARH)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
5 month(s) 24 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
31-10-2018
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Next Hearing Date
20-09-2018
Assessment Year
2013-2014
Appeal Filed On
07-05-2018
Judgement Text
, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BEN CH B, CHANDIGARH , ! . .., # $, %& BEFORE: SH. SANJAY GARG, JM & DR. B.R.R. KUMAR, AM ITA NO. 648/CHD/2018 ASSESSMENT YEAR : 2013-14 SH. BALWINDER SINGH S/O SH. AMAR SINGH VILL. KHAIRPUR, SIRSA PR. CIT AAYKAR BHAWAN SECTOR-14, HISAR PAN NO: DXGPS3816E APPELLANT RESPONDENT ITA NO. 649/CHD/2018 ASSESSMENT YEAR : 2013-14 SH. LAKHVINDER SINGH S/O SH. AMAR SINGH DHANI AMAR SINGH VILL. KHAIRPUR, SIRSA PR. CIT AAYKAR BHAWAN SECTOR-14, HISAR PAN NO: DXGPS3423B APPELLANT RESPONDENT ITA NO. 651/CHD/2018 ASSESSMENT YEAR : 2013-14 SH. GURDEEP SINGH S/O SH. KARTAR SINGH DHANI AMAR SINGH VILL. KHAIRPUR, SIRSA PR. CIT AAYKAR BHAWAN SECTOR-14, HISAR PAN NO: DNXPS9334C APPELLANT RESPONDENT ITA NO. 652/CHD/2018 ASSESSMENT YEAR : 2013-14 SH. BALBIR SINGH S/O SH. LAKHWINDER SINGH R/O VAIDWALA ROAD SIRSA PR. CIT AAYKAR BHAWAN HISAR, HARYANA PAN NO: BQTPS6206A APPELLANT RESPONDENT ITA NO. 653/CHD/2018 ASSESSMENT YEAR : 2013-14 SH. KULDEEP SINGH S/O SH. LAKHWINDER SINGH KHAIRPUR, SIRSA PR. CIT AAYKAR BHAWAN, SECTOR-14 HISAR PAN NO: DXGPS3422A APPELLANT RESPONDENT !' ASSESSEE BY : SHRI. GAUTAM JAIN, SH. LALIT MOHAN #!' REVENUE BY : DR. GULSHAN RAJ $ %! & DATE OF HEARING : 20/09/2018 2 ITA NO. 603/CHD/2018 ASSESSMENT YEAR : 2013-14 SH. BALDEV SINGH S/O SH. GURDAYAL SINGH VILL-KHAIRPUR, SIRSA PR. CIT AAYKAR BHAWAN, SECTOR-14 HISAR PAN NO: BNIPS7284N APPELLANT RESPONDENT ITA NO. 604/CHD/2018 ASSESSMENT YEAR : 2013-14 SH. CHADAT SINGH S/O SH. MOHAN SINGH, DHANI AMAR SINGH, SIRSA HARYANA PR. CIT AAYKAR BHAWAN, HISAR HARYANA PAN NO: DTBPS4489C APPELLANT RESPONDENT ITA NO. 605/CHD/2018 ASSESSMENT YEAR : 2013-14 SH. JOGINDER SINGH S/O SH. THAKAR SINGH, DHANI AMAR SINGH KHAIRPUR, SIRSA HARYANA PR. CIT AAYKAR BHAWAN, HISAR HARYANA PAN NO: DTBPS5180N APPELLANT RESPONDENT ITA NO. 607/CHD/2018 ASSESSMENT YEAR : 2013-14 SH. BANT SINGH R/O 14/81, RAM COLONY SIRSA, HARYANA PR. CIT HISAR, HARYANA PAN NO: EBAPS9194A APPELLANT RESPONDENT ITA NO. 609/CHD/2018 ASSESSMENT YEAR : 2013-14 SH. GANESH DASS MEHTA 64, DWARKAPURI OPP. POST OFFICE, SIRSA PR. CIT AAYKAR BHAWAN HISAR, HARYANA PAN NO: ADRPM6606Q APPELLANT RESPONDENT ITA NO. 610/CHD/2018 ASSESSMENT YEAR : 2013-14 SH. JAGTAR SINGH S/O SH. MOHAN SINGH DHANI AMAR SINGH KHAIRPUR, SIRSA PR. CIT AAYKAR BHAWAN HISAR, HARYANA PAN NO: DTBPS5178G APPELLANT RESPONDENT 3 ITA NO. 612/CHD/2018 ASSESSMENT YEAR : 2013-14 SH. BALDEV RAJ S/O SH. HARI CHAND H.NO. 769, WARD-4 SIRSA PR. CIT AAYKAR BHAWAN HISAR, HARYANA PAN NO: AXOPR4266L APPELLANT RESPONDENT !' ASSESSEE BY : SHRI. TEJ MOHAN SINGH #!' REVENUE BY : DR. GULSHAN RAJ $ %! & DATE OF HEARING : 03/10/2018 '()*! & DATE OF PRONOUNCEMENT : 31/10/2018 %'/ ORDER PER BENCH: ALL THE ABOVE APPEALS HAVE BEEN FILED BY DIFFERENT ASSESSEE AGAINST THE ORDER OF THE PR. CIT, HARYANA. 2. SINCE THE ISSUES RAISED IN ALL THE ABOVE APPEALS ARE COMMON THEREFORE THEY ARE BEING DECIDED BY WAY OF THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. FOR DEALING WE SHALL TAKE ITA NO. 648/ CHD/2018 AS A LEAD CASE WHEREIN ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: 1 THAT ORDER DATED 26.2.2018 U/S 263(1) OF THE ACT BY LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX, HISAR HAS BEEN MADE WIT HOUT SATISFYING THE STATUTORY PRECONDITIONS CONTAINED IN THE ACT AND IS THEREFORE WITHOUT JURISDICTION AND THUS, DESERVES TO BE QUASHED AS SUCH. 1.1 THAT THE LEARNED PR. COMMISSIONER OF INCOME TAX HAS FAILED TO APPRECIATE THAT ONCE THE LEARNED ASSESSING OFFICER ON EXAMINAT ION OF THE FACTS ON RECORD AND AFTER MAKING ALL POSSIBLE ENQUIRIES HAD ACCEPTED CLAIM OF THE APPELLANT THEN SUCH AN ORDER OF ASSESSMENT COULD NOT BE REGARDED AS ERRONE OUS IN AS MUCH AS PREJUDICIAL TO THE INTEREST OF REVENUE MERELY BECAUSE THE LEARN ED PRINCIPAL COMMISSIONER OF INCOME TAX HAD A DIFFERENT OPINION AND THAT TOO, WI THOUT HAVING ESTABLISHED IN ANY MANNER THAT, VIEW ADOPTED BY THE LEARNED ASSESS ING OFFICER WAS AN IMPOSSIBLE VIEW. 1.2 THAT VARIOUS ADVERSE FINDINGS AND OBS ERVATIONS MADE BY THE LEARNED PR. COMMISSIONER OF INCOME TAX IN O RDER ARE BASED ON FUNDAMENTAL MISCONCEPTION OF FACTS AND LAW, ARBITRA RY AND UNJUSTIFIED AND THEREFORE UNTENABLE. 1.3 THAT THE FINDING THAT 'ASSESSMENT ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME TAX ACT, 1961 AND IN ACCORDANCE WITH THE DECISION RENDERED BY JURISDICTIONAL HIGH COURT AND SUPREME C OURT BY REJECTING THE SLP, THEREFORE THE ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE' IS ALSO NOT BASED ON CORRECT APPRECIATION OF FACTS ON RECORD AND HENCE UNSUSTAINABLE. 1.4 THAT THE LEARNED PRINCIPAL COMMISSIONER OF INCO ME TAX OTHERWISE HAS FAILED TO APPRECIATE THAT ONCE AN ORDER HAS BEEN MADE U/S 143 (3)7147 OF THE ACT THEN, NO 4 NOTICE CAN BE ISSUED TO REVISE AN ORDER U/S 143(3) OF THE ACT AS ORDER U/S 143(3) OF THE ACT MERGES WITH AN ORDER U/S 143(3)7147 OF THE ACT. 2. THAT FURTHER THE ORDER MADE U/S 263 BY INVOKING EXPLANATION 2(D) OF SECTION 263 OF THE ACT HAS BEEN MADE WITHOUT GRANTING ANY O PPORTUNITY AS TO THE APPLICATION OF THE EXPLANATION AND THEREFORE SUCH A N ORDER IS OTHERWISE VITIATED. 3. THAT THE LEARNED PRINCIPAL COMMISSIONER OF INCOM E TAX HAS ALSO ERRED BOTH IN LAW AND ON FACT IN GIVING DIRECTION TO ASSE SSING OFFICER TO ADD THE INTEREST INCOME OF RS. 3780155/- REPRESENTING 50% OF THE EN HANCED COMPENSATION OF RS. 75603107- ELIGIBLE FOR EXEMPTION U/S 10(37) OF THE ACT. 3.1 THAT WHILE MAKING THE AFORESAID ADDITION THE LE ARNED PRINCIPAL COMMISSIONER OF INCOME TAX HAS ERRONEOUSLY RELIED O N THE JUDGMENT OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN THE CASE O F MANJIT SINGH V. UOI CWP NO. 15506/2013 DATED 14.1.2014 AND OVERLOOKING THE FOLLOWING JUDGMENTS OF APEX COURT: I)315 ITR 1 (SC) CIT VS. GHANSHYAM (HUF) (DATED 16. 7.2009) II)367 ITR 4 98(SC) CIT VS. GOVINDBHAI MAMAIYA (DAT ED 4.9.2014) III)C.A. NO, 13053/2017 CIT VS. CHET RAM (HUF) (DAT ED 12.9.2017) IV)C.A. NO. 15041/2017 UNION OF INDIA AND ORS VS. H ARI SINGH AND ORS V) C.A. NO. 18475/2017 INCOME TAX OFFICER TDS-2 RAJ KOT VS. MUKTANANDGIRI MAHESHGIRI 3.2 THAT THE LEARNED PRINCIPAL COMMISSIONER OF INCO ME TAX HAS FURTHER ERRED BOTH IN LAW AND ON FACT IN INVOKING SECTION 56(2)(V II) READ WITH SECTION 57(IV) OF THE ACT TO MAKE THE IMPUGNED ADDITION. IT IS THEREFORE PRAYED THAT, IMPUGNED ORDER MADE UN DER SECTION 263(1) OF THE ACT DATED 26.2.2018 BE HELD TO BE WITHOUT JURISDICTION AND, THEREFORE BE QUASHED AND APPEAL OF THE APPELLANT BE ALLOWED. FURTHERMORE ADD ITION SO MADE BE DELETED AND APPEAL OF THE APPELLANT BE ALLOWED. 3. THE ORDER OF THE LD. PR. CIT PASSED UNDER SECTIO N 263 GIVING THE FACTS OF THE CASE AMENDMENT IN THE SECTION 56, CASE LAWS RELIED ON, AND THE RATIONALE OF THE DECISION IS REPRODUCED BELOW: RETURN DECLARING AN INCOME OF RS. 4,66,040/- PLUS A GRI. INCOME AT RS. 2,00,000/- WAS FILED BY ASSESSEE ON 29.03.2014 FOR THE ASSESSM ENT YEAR 2013-14. APART FROM IT, ASSESSEE HAS ALSO SHOWN THE EXEMPT INCOME OF RS. 1, 61,14,384/- IN SCHEDULE EL OF THE INCOME-TAX RETURN (ENHANCED COMPENSATION OF RS. 85,54,074/- AND INTEREST THEREON AT RS. 75,60,310/-). AND CLAIMED EXEMPTION AT RS. 75,60,310/- U/S 10(37) OF THE INCOME-TAX ACT, 1961. THE ASSESSMENT PROCEEDING S U/S 143(3) OF THE ACT WERE FINALIZED BY THE AO VIDE ORDER DATED 24.11.2015 ASS ESSING TOTAL INCOME ON RETURNED INCOME. 2. ASSESSMENT RECORD FOR THE ABOVE MENTIONED ASSES SMENT YEAR WAS CALLED UPON AND EXAMINED. DURING THE YEAR, CERTAIN LAND BE LONGING TO THE ASSESSEE WAS ACQUIRED BY THE LAND ACQUISITION OFFICER, HUDA AND COMPENSATION, ENHANCED COMPENSATION AND INTEREST THEREON WERE AWARDED IN L IEU THEREOF BY THE HUDA/VARIOUS COURTS. AS A RESULT, ASSESSEE RECEIVED INTEREST ON ENHANCED COMPENSATION AMOUNTING TO RS. 75,60,310/- U/ S 28 O F THE LAND ACQUISITION ACT DURING THE YEAR UNDER CONSIDERATION AND CLAIMED WHO LE OF THE INTEREST EXEMPT IN VIEW OF THE JUDGMENT OF HON'BLE APEX COURT DELIVERE D IN THE CASE OF GHANSHYAM HUF REPORTED AT 315ITR 1(2009). 2.1 IN THIS CONNECTION, DIVISION BENCH OF THE HON' BLE PUNJAB & HARYANA HIGH COURT IN ITS JUDGMENT DATED 14.01.2014 IN THE CASE OF MANJEET SINGH (HUF) KARTA MANJEET SINGH VS. UNION OF INDIA & OTHERS, CWP NO. 15006 OF 2013, AFTER CONSIDERING THE DECISION OF THE HON'BLE SUPREME COU RT IN THE CASE OF CIT VS 5 GHANSHYAM (HUF)(SUPRA), OBSERVED THAT THE BENEFIT O F TWO JUDGES BENCH'S DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F CIT VS GHANSHYAM (HUF) CANNOT BE DERIVED BY THE ASSESSEE U/S 28 OF THE LAN D ACQUISITION ACT AND HELD THAT THE ELEMENT OF INTEREST AWARDED BY THE COURT O N ENHANCED COMPENSATION U/S 28 OF THE LAND ACQUISITION ACT, 1894 FALLS FOR TAXATION U/S 56 OF THE INCOME-TAX ACT, 1961 AS 'INCOME FROM OTHER SOURCES'IN THE YEAR OF RECEIPT. 2.2. FURTHER THE SPECIAL LEAVE PETITION NO. 34642 O F 2014 FILED AGAINST THE ABOVE ORDER OF HON'BLE PUNJAB AND HARYANA HIGH COUR T HAS ALSO BEEN DISMISSED BY THE HON'BLE SUPREME COURT VIDE ORDER NO.34642 OF 2014 DATED 18.12.2014 AND THUS ISSUE OF TAXABILITY OF INTEREST AWARDED U/S 28 OF THE L.A. ACT, 1894 HAS BECOME FINAL. 2.3. FURTHER, AS PER THE AMENDED PROVISION OF THE I NCOME-TAX ACT, 1961, INTRODUCED BY FINANCE (NO. 2) ACT, 2009 AS CLAUSE ( VIII) IN SUB SECTION 2 OF SECTION 56, CLAUSE (IV) IN SECTION 57 AND CLAUSE (B) IN SEC TION 145A INSERTED W.E.F. 01.04.2010, THE INTEREST RECEIVED U/S 28 OF THE LAN D ACQUISITION ACT, 1894, ON THE AMOUNT OF COMPENSATION OR ENHANCED COMPENSATION IS ELIGIBLE TO TAX AS 'INCOME FROM OTHER SOURCES' AFTER ALLOWING DEDUCTIO N OF A SUM EQUAL TO 50% OF SUCH INCOME IN THE YEAR OF RECEIPT. 2.4 IN VIEW OF THE ABOVE, THE INTEREST OF RS. 75,60 ,310/- RECEIVED BY ASSESSEE DURING THE YEAR UNDER CONSIDERATION U/S 28 OF THE L .A. ACT, 1894 ON COMPENSATION/ENHANCED COMPENSATION IS TAXABLE AS IN COME FROM OTHER SOURCES, AFTER DEDUCTION @ 50% OF THE SAID INTEREST . HOWEVER, THE A.O. HAS FAILED TO TAX THE SAME IN THE ASSESSMENT ORDER UNDER SECTI ON 143(3). SUCH FAILURE ON THE PART OF THE A.O PRIMA FACIE RENDERS THE ASSESSMENT ORDER ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE AND THE SAME IS, THEREFORE, REQUIRED TO BE MODIFIED/CANCELLED U/S 26 3 OF THE ACT. THEREFORE, SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEEE ON 01.02.2 018 AS TO WHY AN APPROPRIATE ORDER UNDER SECTION 263(1) SHOULD NOT BE PASSED. 3. IN RESPONSE THERETO, SH. S.K. JAIN, CA AND AR OF THE ASSESSEE APPEARED AND FILED WRITTEN SUBMISSION AS UNDER :- 3.1 THAT ASSESSEE HAS FURNISHED RETURN OF INCOME ON 29. 03.2014 DECLARING AN INCOME OF RS. 4,66,040/- AND AGRICULTURE INCOME OF RS. 2,00,000/- FOR THE INSTANT YEAR. THAT PERUSAL OF THE RETURN OF INCOME WOULD SH OW THAT ASSESSEE HAS DULY DISCLOSED THAT, HE HAS RECEIVED EXEMPT INCOME OF RS . 1,61,14,384/- IN SCHEDULE EL (EXEMPT INCOME) OF THE INCOME TAX RETURN, WHICH COM PRISES OF ENHANCED COMPENSATION OF RS. 85,54,0747-ON COMPULSORY ACQUIS ITION OF AGRICULTURAL LAND AND INTEREST THEREON AMOUNTING TO RS. 75,60,310/-ON IT. 3.2 THEREAFTER DURING THE ASSESSMENT PROCEEDINGS U/S 14 3(3) OF THE ACT, IN RESPONSE TO THE QUERY OF LEARNED ASSESSING OFFICER, ASSESSEE FURNISHED REPLY WHERE IN DETAIL REGARDING ENHANCED COMPENSATION ON COMPUL SORY ACQUISITION OF AGRICULTURE LAND HAS BEEN SUBMITTED BEFORE LEARNED ASSESSING OFFICER. 3.3 THAT ON 24.11.2015, AFTER CONSIDERING THE ABOVE SAI D REPLY RETURN OF INCOME FILED BY THE ASSESSEE STOOD ACCEPTED AS SUCH VIDE ORDER OF ASSESSMENT U/S 143(3) OF THE ACT. (THEREAFTER, A NOTICE WAS IS SUED UNDER SECTION 148 OF THE ACT BY RECORDING REASONS AS HAVE ALSO BEEN EXTRACTED IN THE SHOW CAUSE NOTICE. 3.4 THAT IN RESPONSE THERETO ASSESSEE HAS FILED HI S OBJECTIONS TO THE VALIDITY OF THE 1 INITIATION OF PROCEEDINGS U/S 147 OF THE ACT IN T ERMS OF THE JUDGEMENT OF HON'BLE SUPREME ; COURT IN THE CASE OF M/S G.K.N. DRIVESHAF TS (INDIA) LIMITED VS. ITO REPORTED IN 259 ITR 19(SC). 4 AT THE OUTSET, IT IS RESPECTFULLY SUBMITTED THAT ONCE AN ORDER HAS BEEN MADE U/S 143(3)/147 OF THE ACT THEN, NO NOTICE CAN BE ISSUED TO REVISE AN ORDER U/S 143(3) OF THE ACT AS ORDER U/SL43(3)~OF THE ACT MERGES WITH AN ORDER U/S 143(3)/147 OF THE ACT. IT IS THUS SUBMITTED THAT NO TICE U/S 263 OF THE ACT CANNOT BE ISSUED TO MODIFY/CANCEL AN ORDER U/S 143(3) OF THE ACT AS THE SAME STANDS MERGED WITH AN ORDER MADE U/S 143(3)7147 OF THE ACT ON THE SAME ISSUE FOR WHICH NOTICE U/S 263 HAS BEEN ISSUED. RELIANCE IS P LACED ON THE JUDGEMENT OF HON'BLE ALLAHABAD HIGH COURT IN THE CASE OF L.G. EL ECTRONICS INDIA (P) LTD. VS. PCIT REPORTED IN 388 ITR 135. 6 5 IN ANY CASE AND WITHOUT PREJUDICE, THE FACT UAL MATRIX REMAINS THAT NOW THE CLAIM STANDS ACCEPTED AND ALLOWED AFTER DUE ENQUIRY IN TWO SEPARATE ORDERS, ONE U/S 143(3) OF THE ACT AND ANOTHER U/S 147/143(3 ) OF THE ACT. A COPY OF THE ORDER U/S 143(3)7147 OF THE ACT IS PLACED AT PAGE 5 4 OFANNEXURE TO THIS REPLY, WHEREIN IT HAS BEEN STATED AS UNDER: 'PROCEEDINGS U/S 147 OF THE INCOME TAX ACT, 1961 FO R THE ASSESSMENT YEAR 2013-14 ARE HEREBY DROPPED. 5.1 IT IS ALSO EVIDENT FROM THE IMPUGNED NOTICE IT HAS NOT BEEN ALLEGED THAT THE CLAIM HAS BEEN ALLOWED WITHOUT EXAMINATION OF THE I SSUE. IT IS THUS NEITHER A CASE OF LACK OF ENQUIRY BY THE ASSESSING OFFICER OR INAD EQUATE ENQUIRY DURING THE PROCEEDINGS. INFACT IN THE OBJECTION U/S 147 OF THE ACT ASSESSEE HAD OBJECTED TO REOPENING OF THE ASSESSMENT ON THE GROUND THAT SINC E ISSUE HAS BEEN EXAMINED AND ALLOWED U/S 143(3) OF THE ACT AS THE ISSUE IS S QUARELY COVERED BY THE JUDGMENTS OF HON'BLE APEX COURT. 6 IT IS NEXT SUBMITTED THAT WHEN THE REASONS RECORD ED FOR REOPENING THE ASSESSMENT WERE THE VERY SAME REASONS FOR WHICH NOT ICE U/S 263 OF THE ACT THEN INVOCATION OF SECTION 263 OF THE ACT IS NOT TENABLE . IT IS SUBMITTED THAT IN SUPPORT OF THE ABOVE SUBMISSION ASSESSEE SEEKS TO PLACE REL IANCE ON FOLLOWING JUDGEMENTS: I) 2 TAXMANN.COM 260 (DEL.) CIT VS. SURESH PAUL BAN SAL II) 287ITR 286 (DEL) CIT VS. VIKRAM ADITYA AND ASSO CIATED III) ITA 170/2017 (DEL) CIT VS. PRUDENT ADVIS ORY SERVICES (P) LTD. 7 THAT IN THE IMPUGNED NOTICE IT HAS BEEN ALLEGED T HAT ELEMENT OF INTEREST AWARDED BY THE COURT ON ENHANCED COMPENSATION U/S 2 8 OF THE LAND ACQUISITION ACT, 1894 FALLS FOR TAXATION U/S 56 OF THE INCOME TAX ACT, 1961 AS 'INCOME FROM OTHER SOURCES' 7.1 IT IS SUBMITTED THAT AFORESAID ALLEGATION IS BASED ON THE JUDGEMENT OF HON'BLE PUNJAB AND HARYANA HIGH COURT IN ITS JUDGEM ENT DATED 10.01.2014 IN THE CASE OF MANJEET SINGH (HUF) KARTA MANJEET SINGH VS. UNION OF INDIA AND OTHERS, CWP NO. 15006 OF 2013. IT IS SUBMITTED THAT AFORESA ID JUDGEMENT HAS BEEN DISTINGUISHED BY HON'BLE GUJARAT HIGH COURT IN THE CASE OF MOVALIYA BHIKHUBHAI BALABHAI VS. INCOME-TAX OFFICER-TDS-1-SURAT, DATED 31.3.2016 REPORTED IN 388 ITR 343 (GUJ). 7.2 THAT, ASSESSEE ALSO SEEKS TO RELY ON THE FOLLOWING JUDGEMENTS: I) C.A NO. 13053/2017 (SC) DATED 12.09.2017 CIT VS. CHET RAM (HUF) II) 315 ITR 1(SC) DATED 16.07.2009 CIT VS. GHANSHYA M HUF III) 367 ITR 498(SC) DATED 04.09.2014 CIT VS. GOVINDBHAI MAMAIYA IV) C.A. NO, 15041/2017 UNION OF INDIA AND ORS. VS. HAH SINGH AND ORS. V) C.A. NO, 18475/2017 INCOME TAX OFFICER TDS-2 RAJ KOT. VS. MUKTANANDGIRI MAHESHGIRI VI) CR NO. 2509 OF 2012 (P&H) DATED 29.11.2013 HSID C LTD. VS. SAVITRI VII) CR NO. 7953 OF 2013 (P&H) DATED 21.12.2013 HUD A VS. MANDIR NAR SINGH PURI AND ANOTHERS VIII) ITA NO. 160/ CHD/2015 DATED 14.07.2015 CIT HI SAR VS. VAIBHAV CHOUDHARY IX) ITA NO. 437/CHD/2015 DATED 14.07.2015 CITHISARV S. NISHANT CHOUDHARY X) ITA NO. 405/CHD/2013 DATED 2.8.2013 ITO VS. PAWA N GIRL XI) ITA NO. 313/CHD/2015 DATED 20.02.2016 BALDEV SI NGH VS. ITO XII) ITA NO. 131/CHD/2016 DATED 30.06.2016 THE DCIT (TDS), LUDHIANA VS. DEDICATED FREIGHT CORRIDOR CORPORATION LTD. XIII) ITA NO. 100/HYD/2016 DATED 07.12.2016 SMT. P. SUSHEELA VS. ITO XIV) 83 TAXMANN.COM 304 DATED 21.04.2017 DCIT VS. DINESH SHARMA 8.1 THE PROVISIONS OF SECTION 56(2)(VIII) OF THE AC T, THE PROVISIONS OF SECTION 145A AND THE PROVISIONS OF SECTION 57 OF THE ACT AMENDED BY FINANCE (NO. 2) ACT 2009. FROM THE READING OF THE PROVISIONS, MEMORANDUM AND NOTES TO CLAUSE OF THE ABOVE AMENDMENT IT IS EVIDENT THAT AFORESAID AMENDM ENTS ARE INTRODUCED TO MITIGATE THE HARDSHIP THAT ARREARS OF INTEREST COMP UTED ON DELAYED OR ENHANCED COMPENSATION SHALL BE TAXABLE ON ACCRUAL BASIS AS H ELD BY APEX COURT IN THE CASE OF RAMA BAI VS. CIT REPORTED IN 181 ITR 400. T HE AMENDMENTS ARE FOR ARREARS OF INTEREST COMPUTED ON DELAYED OR ENHANCED COMPENS ATION SHALL BE TAXABLE 7 ON ACCRUAL BASIS. THUS BY MAKING AMENDMENT IN SECTI ON 56(2), 57 AND 145A, LEGISLATION MAKES THE ARREAR OF INTEREST COMPUTED O N DELAYED OR ENHANCED COMPENSATION SHALL BE TAXABLE IN THE YEAR OF RECEIP T, WHICH DOES NOT HAVE ANY EFFECT ON THE BINDING DECISION OF APEX COURT IN THE CASE OF CIT VS. GHANSHYAM DASS (HUF) REPORTED IN 315 ITR 1 FURTHER AFFIRMED I N CIT VS. GOVINDBHAI MAMAIYA REPORTED IN 367 ITR 498 (SC) WHEREIN IT HAS BEEN HE LD THAT THE INTEREST EARNED UNDER SECTION 28 OF LAND ACQUISITION ACT, WHICH IS ON ENHANCED COMPENSATION, IS TREATED AS A ACCRETION TO THE VALUE AND THEREFORE, PART OF THE ENHANCED COMPENSATION. 8.2 IN VIEW OF THE AFORESAID IT IS THUS SUBMITTED T HAT CLAIM OF THE ASSESSEE IS IN ACCORDANCE WITH LAW. 4. I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE A R OF THE ASSESSEE. THE AR OF THE ASSESSEE RELIED HEAVILY ON THE DECISION OF H ON'BLE APEX HIGH COURT IN THE CASE OF GHANSHYAM HUF (SUPRA) DATED 16.07.2009. IN THIS CONTEXT, SUBSEQUENT TO THE ABOVE DECISION, THE FOLLOWING 3 (THREE) AMENDED PROVISIONS OF INCOME TAX ACT, 1961 WERE INTRODUCED BY THE FINANCE ACT, 2009 W.E.F. 01.04.2010 :- 1. CLAUSE (VIII) OF SUB-SECTION 2 OF SECTION 56: 'INCOME BY WAY OF INTEREST RECEIVED ON COMPENSATION OR ON ENHANCED COMPENSATION REFERRED TO IN CLAUSE (B) OF SECTION 1 45A.' 2. CLAUSE (IV) SECTION 57: 'IN THE CASE OF INCOME OF NATURE REFERRED TO IN CLA USE (VIII) OF SUB SECTION (2) OF SECTION 56, A DEDUCTION OF A SUM EQUAL TO FIFTY PER CENT OF SUCH INCOME AND NO DEDUCTION SHALL BE ALLOWED UNDER ANY OTHER CLAUSE O F THIS SECTION.' 3. CLAUSE (B) OF SECTION-145A: 'INTEREST RECEIVED BY AN ASSESSEE ON COMPENSATION O R ON ENHANCED COMPENSATION, AS THE CASE MAY BE, SHALL BE DEEMED T O BE THE INCOME OF THE YEAR IN WHICH IT IS RECEIVED.' IN VIEW OF THE ABOVE AMENDED PROVISIONS INTRODUCED W.E.F. 01.04.2010, 50% OF THE INTEREST ON ENHANCED COMPENSATION IS ASSESSABLE AS INTEREST INCOME UNDER THE HEAD OF INCOME FROM OTHER SOURCES IN THE YEAR THE I NTEREST IS RECEIVED BY THE ASSESSEE. IN THIS REGARD, THE CONTENTION OF THE AR THAT THE AMENDMENTS WERE INTRODUCED TO TAX THE INTEREST ON COMPENSATION AND ENHANCED COMPENSATION IN THE YEAR OF RECEIPT TO MITIGATE THE HARDSHIPS CONSE QUENT TO DECISION HON'BLE APEX COURT IN THE CASE OF RAMA BAI (SUPRA), IS NOT RELEVANT IN THE INSTANT ISSUE. EARLIER, THERE WAS NO SPECIFIC PROVISION IN 56 TO T AX INTEREST RECEIVED ON COMPENSATION OR ON ENHANCED COMPENSATION. IN VIEW O F THE ABOVE SPECIFIC PROVISION INTRODUCED BY THE FINANCE ACT, 2009, INTE REST ON ENHANCED COMPENSATION IS CLEARLY TAXABLE UNDER THE ACT IN TH E YEAR IT IS RECEIVED. 5. FURTHER, HON'BLE SUPREME COURT IN THE CASE OF STATE OF PUNJAB VS. AMARJIT SINGH, JT 2011 (2) SC 393DATED 08.02.2011 HELD THAT THE DE CISION IN THE CASE OF GHANSHYAM HUF (SUPRA) IS CONTRARY TO THE CONSTITUTI ON BENCH DECISION OF HON'BLE SUPREME COURT IN THE CASE OF SUNDER VS. UNION OF INDIA JT 2001 (8) SC 130 (CONSTITUTION BENCH) AS UNDER :- '8. LEARNED COUNSEL FOR THE RESPONDENTS PLACED RELI ANCE ON THE FOLLOWING OBSERVATIONS OF THIS COURT IN COMMISSIONER OF INCOM E TAX. FARIDABAD V. GHANSHYAM (HUF) -(2009) 8 SCC 412: 'THE ADDITIONAL AMOUNT PAYABLE UNDER SECTION 23(1 A ) OF THE 1894 ACT IS NEITHER INTEREST NOR SOLATIUM. IT IS AN ADDITIONAL COMPENSA TION DESIGNED TO COMPENSATE THE OWNER OF THE LAND, FOR THE RISE IN PRICE DURING THE PENDENCY OF THE LAND ACQUISITION PROCEEDINGS. IT IS A MEASURE TO OFFSET THE EFFECT OF INFLATION AND THE CONTINUOUS RISE IN THE VALUE OF PROPERTIES. THEREFO RE, THE AMOUNT PAYABLE UNDER SECTION 23(1 A) OF THE 1894 ACT IS AN ADDITIONAL CO MPENSATION IN RESPECT TO THE ACQUISITION AND HAS TO BE RECKONED AS PART OF THE M ARKET VALUE OF THE LAND.' 8 THE LEARNED COUNSEL FOR RESPONDENTS SUBMITTED THAT AS THIS COURT HAS TREATED ADDITIONAL AMOUNT UNDER SECTION 23(1 A) AS PART OF THE MARKET VALUE, ADDITIONAL AMOUNT IS PAYABLE ON THE SOLATIUM. THERE IS NO LOGI C IN THE CONTENTION AS THE DECISION NOWHERE HOLDS THAT SOLATIUM IS PART OF MAR KET VALUE NOR HOLDS THAT ADDITIONAL AMOUNT UNDER SECTION 23(1 A) IS PAYABLE ON THE SOLATIUM AMOUNT. BE THAT AS IT MAY. MORE IMPORTANTLY, WHAT REQUIRES TO BE NOTICED IS THAT THE ENTIRE CONSIDERATION AND ANALYSIS IN THAT DECISION WAS WIT H REFERENCE TO THE QUESTION WHETHER SOLATIUM, ADDITIONAL AMOUNT AND INTEREST AR E PART OF 'ENHANCED COMPENSATION' FOR THE PURPOSES OF SECTION 45(5) (B) OF THE INCOME TAX ACT, 1961. THE OBSERVATIONS THEREIN SHOULD BE UNDERSTOOD IN TH E CONTEXT OF THE PROVISIONS OF THE INCOME TAX ACT. FOR EXAMPLE THE DECISION ALSO H OLDS THAT INTEREST PAYABLE UNDER SECTION 28 OF THE ACT IS 'ENHANCED COMPENSATI ON' FOR THE PURPOSES OF SECTION 45(5) (B) OF INCOME TAX ACT, WHICH IF TAKEN AS THE INTERPRETATION WITH REFERENCE TO THE LAND ACQUISITION ACT, 1894, WILL B E CONTRARY TO THE CONSTITUTION BENCH DECISION IN SUNDER (SUPRA). WE MAY ALSO NOTE THAT THE DECISION CLEARLY HOLDS THAT ADDITIONAL AMOUNT IS AWARDABLE ONLY AGAI NST THE MARKET VALUE AND NOT SOLATIUM: 'IT IS CLEAR FROM READING OF SECTIONS 23(1 A), 23(2 ) AS ALSO SECTION 28 OF THE 1894 ACT THAT ADDITIONAL BENEFITS ARE AVAILABLE ON THE MARKE T VALUE OF THE ACQUIRE LANDS UNDER SECTION 23(1A) AND 23(2) WHEREAS SECTION 28 I S AVAILABLE IN RESPECT OF THE ENTIRE COMPENSATION.' 9. IN VIEW OF THE ABOVE, THE APPEAL IS ALLOWED, THE ORDERS OF THE HIGH COURT AND THE EXECUTING COURT, IN SO FAR AS THEY HOLD THAT AD DITIONAL AMOUNT UNDER SECTION 23(1 A) IS PAYABLE ON SOLATIUM, ARE SET ASIDE. IT I S DECLARED THAT ADDITIONAL AMOUNT UNDER SECTION 23(1 A) IS AWARDABLE ONLY ON THE MARK ET VALUE DETERMINED UNDER THE FIRST FACTOR OF SECTION 23 (1) OF THE ACT AND C ANNOT BE CALCULATED ON THE SOLATIUM PAYABLE UNDER SECTION 23(2) OF THE ACT.' 6. RELIANCE PLACED BY THE AR IN THE DECISION OF TWO JUDGES BENCH OF HON'BLE APEX COURT IN GHANSHYAM HUF (SUPRA) IS ALSO NOT SUS TAINABLE IN VIEW OF VARIOUS CONTRARY LARGER BENCH DECISIONS OF HON'BLE APEX COU RT. IN THE CASE OF GHANSHYAM HUF (SUPRA) THE TWO JUDGES BENCH OF HON'B LE APEX COURT HELD THAT INTEREST U/S 28 OF 1894 ACT IS PART OF THE AMOUNT O F COMPENSATION, WHICH IS NOT THE CASE IN THE MATTER OF PAYMENT OF INTEREST U/S 34. T HAT INTEREST U/S 34 IS FOR DELAY IN MAKING PAYMENT AFTER THE COMPENSATION AMOUNT IS DET ERMINED. AS AGAINST THE ABOVE, CONTRARY DECISIONS WERE HELD BY THE APEX COU RT IN DR. SHAMLAL NARULA VS. CIT, [1964] 53 ITR 151 (THREE JUDGES BENCH), BIKRAM SINGH VS. LAND ACQUISITION COLLECTOR, (1997) 224 ITR 551 (THREE JUDGES BENCH), SUNDER VS. UNION OF INDIA JT 2001 (8) SC 130 (CONSTITUTION BENCH) AND STATE OF P UNJAB VS. AMARJIT SINGH JT 2011 (2) SC 393 AS OBSERVED BY THE HON'BLE PUNJAB & HARY ANA HIGH COURT IN THE CASE OF MANJET SINGH (HUF) KARTA MANJET SINGH VS. UNION OF INDIA & OTHER, CWP NO. 15506 OF 2013 DATED 14.01.2014. THE THREE JUDGES BE NCH HON'BLE APEX COURT REFERRED TO ABOVE HAVE HELD THAT INTEREST U/S 28 AR E AKIN TO INTEREST U/S 34 WHICH DO NOT FROM PART OF COMPENSATION AND THE SAME IS A REVENUE RECEIPT AND TAXABLE, AS UNDER :- (I) HON'BLE APEX COURT IN ITS THREE JUDGE BENCH IN THE CASE OF BIKRAM SINGH (SUPRA) HELD : 'THE QUESTION IS: WHETHER THE INTEREST ON DELAYED P AYMENT ON THE ACQUISITION OF THE IMMOVABLE PROPERTY UNDER THE ACQUISITION ACT WO ULD NOT BE ELIGIBLE TO INCOME-TAX? IT IS SEEN THAT THIS COURT HAS CONSISTENTLY TAKEN T HE VIEW THAT IT IS A REVENUE RECEIPT. THE AMENDED DEFINITION OF 'INTEREST' WAS NOT INTEND ED TO EXCLUDE THE REVENUE RECEIPT OF INTEREST ON DELAYED PAYMENT OF COMPENSAT ION FROM TAXABILITY. ONCE IT IS CONSTRUED TO BE A REVENUE RECEIPT, NECESSARILY, UNLESS THERE IS AN EXEMPTION UNDER THE APPROPRIATE PROVISIONS OF THE ACT, THE RE VENUE RECEIPT IS EXIGIBLE TO TAX. THE AMENDMENT IS ONLY TO BRING WITHIN ITS TAX NET, INCOME RECEIVED FROM THE TRANSACTION COVERED UNDER THE DEFINITION OF INTERES T. IT WOULD MEAN THAT THE INTEREST RECEIVED AS INCOME ON THE DELAYED PAYMENT OF THE COMPENSATION DETERMINED UNDER SECTION 28 OR 31 OF THE ACQUISITIO N ACT IS A TAXABLE EVENT.' (II) HON'BLE APEX COURT IN ITS THREE JUDGE BENC H IN THE CASE OF DR. SHAM LAI NARULA (SUPRA) HELD : 9 THEREFORE, THE INTEREST AWARDED UNDER S. 28 OF THE ACT, JUST LIKE UNDER S. 34 THEREOF, CANNOT BE A COMPENSATION OR DAMAGES FOR THE LOSS OF THE RIGHT TO RETAIN POSSESSION BUT ONLY COMPENSATION PAYABLE BY THE STA TE FOR KEEPING BACK THE AMOUNT PAYABLE TO THE OWNER.' 7. IN VIEW OF THE AUTHORITATIVE PRONOUNCEMENTS OF T HE APEX COURT IN THE CASE OF DR. SHAMLAL NARULA VS. CIT (SUPRA), BIKRAM SINGH VS . LAND ACQUISITION COLLECTOR, (SUPRA), SUNDER VS. UNION OF INDIA (SUPRA) AND STAT E OF PUNJAB VS. AMARJIT SINGH (SUPRA), HON'BLE PUNJAB & HARYANA HIGH COURT IN MAN JET SINGH (SUPRA)HELD THAT THE BENEFIT OF TWO JUDGES BENCH'S DECISIONIN THE CA SE OF GHANSHYAM (HUF) CANNOT BE DERIVED BY THE ASSESSEE U/S 28 OF THE LAN D ACQUISITION ACT AND HELD THAT THE ELEMENT OF INTEREST AWARDED BY THE COURT O N ENHANCED COMPENSATION U/S 28 OF THE LAND ACQUISITION ACT, 1894 FALLS FOR TAXATION U/S 56 OF THE INCOME-TAX ACT, 1961 AS 'INCOME FROM OTHER SOURCES'IN THE YEAR OF RECEIPT. THE OBSERVATION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF MANJET SINGH (SUPRA) IS RE- PRODUCED AS UNDER :- '12. ADVERTING TO THE CASE LAW ON THE SUBJECT, INEV ITABLY, REFERENCE IS MADE TO THE JUDGMENT BY THE THREE JUDGES BENCH OF THE SUPREME C OURT IN THE CASE OF DR. SHAMLAL NARULA V. CIT , [1964] 53 ITR 151, WHICH HA D CONSIDERED THE ISSUE REGARDING AWARD OF INTEREST UNDER THE 1894 ACT. INT EREST UNDER SECTION 28 OF THE 1894 ACT WAS CONSIDERED AKIN TO INTEREST UNDER SECT ION 34 THEREOF AS BOTH WERE HELD TO BE ON ACCOUNT OF KEEPING BACK THE AMOUNT PA YABLE TO THE OWNER AND DID NOT FORM PART OF COMPENSATION OR DAMAGES FOR TH E LOSS OF THE RIGHT TO RETAIN POSSESSION. IT WAS NOTICED AS UNDER:- 'AS WE HAVE POINTED OUT EARLIER, AS SOON AS THE COL LECTOR HAS TAKEN POSSESSION OF THE LAND EITHER BEFORE OR AFTER THE AWARD THE TITLE ABSOLUTELY VESTS IN THE GOVERNMENT AND THEREAFTER OWNER OF THE LAND SO ACQU IRED CEASES TO HAVE ANY TITLE OR RIGHT OF POSSESSION TO THE LAND ACQUIRED. UNDER THE AWARD HE GETS COMPENSATION FOR BOTH THE RIGHTS. THEREFORE, THE IN TEREST AWARDED UNDER S. 28 OF THE ACT, JUST LIKE UNDER S. 34 THEREOF, CANNOT BE A COMPENSATION OR DAMAGES FOR THE LOSS OF THE RIGHT TO RETAIN POSSESSION BUT ONLY COMPENSATION PAYABLE BY THE STATE FOR KEEPING BACK THE AMOUNT PAYABLE TO THE OW NER.' THE PRINCIPLE OF DR. SHAMLAL NARULA'S CASE (SUPRA) HAD SUBSEQUENTLY BEEN APPLIED BY THREE JUDGES BENCH OF THE APEX COURT IN A LATER DECISION IN T.N.K.GOVINDARAJU CHETTY V. CIT, (1967) 66 ITR 465. 13. FURTHER SECTION 2(28A) OF THE ACT DEFINES 'INTE REST AND WAS INSERTED BY FINANCE ACT, 1976 TO BE EFFECTIVE FROM 1.6.1976. IT READS THUS:- ''INTEREST' MEANS INTEREST PAYABLE IN ANY MANNER IN RESPECT OF ANY MONEYS BORROWED OR DEBT INCURRED (INCLUDING A DEPOSIT, CLA IM OR OTHER SIMILAR RIGHT OR OBLIGATION) AND INCLUDES ANY SERVICE FEE OR OTHER C HARGE IN RESPECT OF THE MONEYS BORROWED OR DEBT INCURRED OR IN RESPECT OF ANY CRED IT FACILITY WHICH HAS NOT BEEN UTILISED.' THE EXPRESSION 'INTEREST' OCCURRING IN SUB-SECTION (28A) OF SECTION 2 OF THE ACT WIDENS THE SCOPE OF THE TERM 'INTEREST' FOR THE PUR POSES OF THE ACT. 14. ANOTHER THREE JUDGES BENCH OF THE APEX COURT IN BIKRAM SINGH VS. LAND ACQUISITION COLLECTOR, (1997) 224 ITR 551 FOLLOWING DR. SHAMLAL NARULA'S CASE (SUPRA) AND TAKING INTO CONSIDERATION DEFINITION OF 'INTERESTLN SECTION 2(28A) OF THE ACT HAD RECORDED THAT INTEREST UNDER SECTION 28 OF THE 1894 ACT WAS A REVENUE RECEIPT AND IS TAXABLE. IT WAS HELD AS UNDE R:- 'THE CONTROVERSY IS NO LONGER RES INTEGRA. THIS QUE STION WAS CONSIDERED ELABORATELY BY THIS COURT IN DR. SHAMLAL NARULA VS.COMMISSIONER OF INCOME-TAX, JAMMU [51 ITR 151]. THEREIN, K. SUBBA RAO, J., AS HE THEN WAS, CO NSIDERED THE EARLIER CASE LAW ON THE CONCEPT OF 'INTEREST' LAID DOWN BY THE PRIVY CO UNCIL AND ALL OTHER CASES AND HAD HELD AT PAGE 158 AS UNDER: 'IN A CASE WHERE TIT LE PASSES TO THE STATE, THE STATUTORY INTEREST PROVIDED THEREAFTER CAN ONLY BE REGARDED EITHER AS REPRESENTING THE PROFIT WHICH THE OWNER OF THE LAND MIGHT HAVE M ADE IF HE HAD THE USE OF THE MONEY OR THE LOSS HE SUFFERED BECAUSE HE HAD NOT TH AT USE. IN NO SENSE OF THE 10 TERM CAN IT BE DESCRIBED AS DAMAGES OR COMPENSATION FOR THE OWNER'S RIGHT TO RETAIN POSSESSION, FOR HE HAS NO RIGHT TO RETAIN PO SSESSION AFTER POSSESSION WAS TAKEN UNDER SECTION 16 OR SECTION 17 OF THE ACT. WE , THEREFORE, HOLD THAT THE STATUTORY INTEREST PAID UNDER SECTION 34 OF THE ACT IS INTEREST PAID FOR THE DELAYED PAYMENT OF THE COMPENSATION AMOUNT AND, THEREFORE, IS A REVENUE RECEIPT LIABLE TO TAX UNDER THE INCOME TAX ACT.' THIS POSITION OF LAW HAS BEEN CONSISTENTLY REITERAT ED BY THIS COURT IN THE CASE OF TMK GOVINDARAJU CHETTY VS. COMMISSIONER OF INCOME-T AX, MADRAS [66 ITR 465], RAMA RAI & ORS. VS. CIT, ANDHRA PRADESH [181 ITR 40 0] AND K.S.KRISHNA RAO VS. CIT, A. P. [181 ITR 408]. THUS BY A CATENA OF JUDICIAL P RONOUNCEMENTS, IT IS SETTLED LAW THAT THE INTEREST RECEIVED ON DELAYED PAYMENT OF TH E COMPENSATION IS A REVENUE RECEIPT ELIGIBLE TO INCOME TAX. IT IS TRUE THAT IN AMENDING THE DEFINITION OF 'INTEREST' IN SECTION 2(28A) INTEREST WAS DEFINED TO MEAN INTE REST PAYABLE IN ANY MANNER IN RESPECT OF ANY MONEY BORROWED OR DEBT INCURRED INCL UDING A DEPOSIT, CLAIM OR OTHER SIMILAR RIGHT OR OBLIGATION AND INCLUDES ANY SERVICE, FEE OR OTHER CHARGES IN RESPECT OF THE MONEYS BORROWED OR DEBT INCURRED OR IN RESPECT OF ANY CREDIT FACILITY WHICH HAS NOT BEEN UTILISED. IT IS SEEN TH AT THE WORD 'INTEREST' FOR THE PURPOSE OF THE ACT WAS INTERPRETED BY THE INCLUSIVE DEFINITION. A LITERAL CONSTRUCTION MAY LEAD TO THE CONCLUSION THAT THE IN TEREST RECEIVED OR PAYABLE IN ANY MANNER IN RESPECT OF ANY MONEYS BORROWED OR A D EBT INCURRED OR ENUMERATED ANALOGOUS TRANSACTION WOULD BE DEEMED IN TEREST. THAT WAS EXPLAINED BY THE BOARD IN THE CIRCULAR REFERRED TO HEREINBEFORE. BUT THE QUESTION IS: WHETHER THE INTEREST ON DELAYED PAYMENT ON THE ACQUISITION OF THE IMMOVABLE PROPERTY UNDER THE ACQUISITION ACT WOULD NOT BE ELI GIBLE TO INCOME-TAX? IT IS SEEN THAT THIS COURT HAS CONSISTENTLY TAKEN THE VIEW THA T IT IS A REVENUE RECEIPT. THE AMENDED DEFINITION OF 'INTEREST' WAS NOT INTENDED T O EXCLUDE THE REVENUE RECEIPT OF INTEREST ON DELAYED PAYMENT OF COMPENSATION FROM TAXABILITY. ONCE IT IS CONSTRUED TO BE A REVENUE RECEIPT, NECESSARILY, UNL ESS THERE IS AN EXEMPTION UNDER THE APPROPRIATE PROVISIONS OF THE ACT, THE RE VENUE RECEIPT IS EXIGIBLE TO TAX. THE AMENDMENT IS ONLY TO BRING WITHIN ITS TAX NET, INCOME RECEIVED FROM THE TRANSACTION COVERED UNDER THE DEFINITION OF INTERES T. IT WOULD MEAN THAT THE INTEREST RECEIVED AS INCOME ON THE DELAYED PAYMENT OF THE COMPENSATION DETERMINED UNDER SECTION 28 OR 31 OF THE ACQUISITIO N ACT IS A TAXABLE EVENT.' 15. NOW, WE ADVERT TO THE JUDGMENT OF THE APEX COUR T IN GHANSHYAM (HUF)'S CASE (SUPRA) ON THE BASIS OF WHICH LEARNED COUNSEL FOR THE ASSESSEE HAD SOUGHT RECONSIDERATION OF JUDGMENT OF THIS COURT IN CIT V. BIR SINGH, ITA NO. 209 OF 2004 DECIDED ON 27.10.2010 WHERE DIVISION BENCH OF THIS COURT HAS HELD THAT ELEMENT OF INTEREST AWARDED BY THE COURT ON ENHANCED AMOUNT OF COMPENSATION UNDER SECTION 28 OF THE 1894 ACT FALLS FOR TAXATION UNDER SECTION 56 AS 'INCOME FROM OTHER SOURCES' IN THE YEAR OF RECEIPT. 16. THE RELIANCE WAS PLACED UPON FOLLOWING OBSERVAT IONS IN GHANSHYAM (HUF)'S CASE (SUPRA):- 'TO SUM UP, INTEREST IS DIFFERENT FROM COMPENSATION . HOWEVER, INTEREST PAID ON THE EXCESS AMOUNT UNDER SECTION 28 OF THE 1894 ACT DEPE NDS UPON A CLAIM BY THE PERSON WHOSE LAND IS ACQUIRED WHEREAS INTEREST UNDE R SECTION 34 IS FOR DELAY IN MAKING PAYMENT. THIS VITAL DIFFERENCE NEEDS TO BE K EPT IN MIND IN DECIDING THIS MATTER. INTEREST UNDER SECTION 28 IS PART OF THE AM OUNT OF COMPENSATION WHEREAS INTEREST UNDER SECTION 34 IS ONLY FOR DELAY IN MAKI NG PAYMENT AFTER THE COMPENSATION AMOUNT IS DETERMINED. INTEREST UNDER S ECTION 28 IS A PART OF THE ENHANCED VALUE OF THE LAND WHICH IS NOT THE CASE IN THE MATTER OF PAYMENT OF INTEREST UNDER SECTION 34.' 17. IN VIEW OF THE AUTHORITATIVE PRONOUNCEMENTS OF THE APEX COURT IN DR. SHAM LAI NARULA, T.N.K.GOVINDARAJA CHETTY, AMARJIT SINGH,SUNDER, BIKRAM SINGH'S CASES (SUPRA), RAMA BAI VS. CIT (1990) 181 ITR 400 AND K.S.KRISHNA RAO V. CIT, (1990) 181 ITR 408, THE ASSESSEE CANNOT DERIVE ANY BENEFIT FROM THE AFORESAID OBSERVATIONS QUOTED ABOVE.' 8. FURTHER SLP FILED AGAINST THE ABOVE DECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT HAS ALSO BEEN DISMISSED BY HON'BLE SUPRE ME COURT ON 18.12.2014 AS UNDER :- 'HEARD LEARNED COUNSEL FOR THE PETITIONERS AND PERU SED THE RELEVANT MATERIAL. 11 WE DO NOT FIND ANY LEGAL AND VALID GROUND FOR INTER FERENCE. THE SPECIAL LEAVE PETITIONS ARE DISMISSED.' 9. IN THIS REGARD, RELIANCE PLACED BY THE AR OF THE ASSESSEEE IN THE CASES OF (I) MOVALIYA BHIKHUBHAI BALABHAI (SUPRA) (II) C.A NO. 13053/2017 (SC) DATED 12.09.2017 CIT V S. CHET RAM (HUF) (III) CIT VS. GOVINDBHAI MAMAIYA (2014) 367 ITR 049 8 (SC), (IV) C.A. NO, 15041/2017 UNION OF INDIA AND ORS. VS . HAH SINGH AND ORS., (V) C.A. NO, 18475/2017 INCOME TAX OFFICER TDS-2 RA JKOT. VS. MUKTANANDGIRI MAHESHGIRI, (VI) CR NO. 2509 OF 2012 (P&H) DATED 29.11.2013 HSI DC LTD. VS. SAVITRI,(VII)CR NO. 7953 OF 2013 (P&H) DATED 21.12.2013 HUDA VS. MANDIR NAR SINGH PURI AND ANOTHERS, (VIII)ITA NO. 160/ CHD/2015 DATED 14.07.2015 CIT HI SAR VS. VAIBHAV CHOUDHAR, (IX)ITA NO. 437/ CHD/2015 DATED 14.07.2015 CIT HISA R VS. NISHANT CHOUDHARY, (X)ITA NO. 405/CHD/ 2013 DATED 2.8.2013 ITO VS. PAW AN GIRI, (XI) ITA NO. 313/CHD/2015 DATED 20.02.2016 BALDEV S INGH VS. ITO, (XII)ITA NO. 131/CHD/2016 DATED 30.06.2016 THE DCIT (TDS), LUDHIANA VS. DEDICATED FREIGHT CORRIDOR CORPORATION LTD., (XIII) ITA NO. 100/HYD/2016 07.12.2016 SMT. P. SUSH EELA VS. ITO, (XIV) 83 TAXMANN.COM 304 DATED 21.04.2017 DCIT VS. DINESH SHARMAARE ALSO NOT SUSTAINABLE IN VIEW OF THE DECISION OF HON'BLE PUNJ AB & HARYANA HIGH COURT IN THE CASE OF NARESH KUMAR JAIN & OTHERS VS. STATE OF HAR YANA AND OTHERS IN CWP NO. 14728 OF 20T7 DATED 12.07.2017. IN ALL THE ABOVE DE CISIONS RELIED UPON BY THE AR, THE JUDGEMENT IN GHANSHYAM HUF (SUPRA) CASE WAS FOL LOWED, FOR THE REASON OF WHICH THE ABOVE JUDGEMENTS WOULD BE OF NO ADVANTAGE ON THE ISSUE OF TAXABILITY OF INTEREST ON ENHANCED COMPENSATION AS HELD BY HON 'BLE PUNJAB & HARYANA HIGH COURT IN NARESH KUMAR JAIN & OTHERS (SUPRA) AS UNDER:- '9. IN VIEW OF THE ABOVE AND ALSO THE AMENDMENTS MA DE BY THE FINANCE (NO. 2) ACT, 2009 W.E.F. 1.4.2010 NOTICED HEREINBEFORE, NO ADVANTAGE CAN BE DERIVED BY THE PETITIONERS FROM THE JUDGMENT IN GHANSHYAM'S CA SE (SUPRA). 10.SIMILARLY, THE JUDGMENT IN GOVINDBHAI MAMAIYA'S CASE (SUPRA) RELIED UPON THE BY THE LEARNED COUNSEL WOULD BE OF NO HELP TO THE P ETITIONERS AS IN THE SAID CASE, THE JUDGMENT IN GHANSHYAM'S CASE (SUPRA) WAS FOLLOW ED. 11. EXAMINING THE ISSUE OF TAXABILITY OF INTEREST U NDER SECTION 28 OF THE ACT, IN COMMISSIONER OF INCOME TAX V. BIR SINGH (HUF), ITA NO.209 OF 2004 DECIDED ON 27.10.2010, IT WAS HELD BY THE DIVISION BENCH OF THIS COURT THAT THE INTEREST AWARDED BY COURT ON ENHANCED COMPENSATION UNDER SEC TION 28 OF THE ACT WAS CHARGEABLE TO TAX AS INCOME FROM OTHER SOURCES IN T HE YEAR OF RECEIPT. DIVISION BENCH OF THIS COURT AGAIN IN COMMISSIONER OF INCOME TAX, PANCHKULA V. PREM SINGH DECIDED ON 16.12.2010 WHILE CONSIDERING IDENT ICAL ISSUE RECORDED AS UNDER: - '11. IN THIS VIEW OF THE MATTER, THE INTEREST COMPO NENT ON ENHANCED COMPENSATION UNDER SECTION 28 IS LIABLE TO BE TAXED UNDER SECTION 56 OF THE ACT EVEN WHEN COMPENSATION IS TREATED AS AGRICULTURAL I NCOME AND IS NOT COVERED BY SECTION 45(C) OF THE ACT. WE THUS ANSWER THE QUESTI ONS IN FAVOUR OF THE REVENUE AND MODIFY OUR ORDER DATED 5.7.2010 ACCORDINGLY. TH E AMOUNT OF INTEREST ON ENHANCED COMPENSATION IS HELD TO BE TAXABLE IN THE YEAR OF RECEIPT IRRESPECTIVE OF PENDENCY OF PROCEEDINGS AGAINST AWARD OF ENHANCE D COMPENSATION. 12. ADVERTING TO THE JUDGMENT OF THE GUJARAT HIGH C OURT IN MOVALIYA BHIKHUBHAI BALABHAI'S CASE (SUPRA), IT MAY BE NOTIC ED THAT SINCE THE JAGMAL SINGH'S CASE (SUPRA) ON THE BASIS OF WHICH THE SAID CASE WAS DECIDED, HAS 12 BEEN OVERRULED BY THIS COURT IN CWP NO. 10125 OF201 5(ATTAR SINGH AND OTHERS V. STATE OF HARYANA AND OTHERS) DECIDED ON 3.9.2015 TO WHICH ONE OF US (AJAY KUMAR MITTAL, J.) WAS A MEMBER, WITH THE FOLLOWING OBSERVATIONS:- 'THE JUDGMENT OF LEARNED SINGLE JUDGE IN JAGMAL SIN GH'S CASE (SUPRA) (ANNEXURE P-5) ON WHICH RELIANCE HAS BEEN PLACED BY THE PETIT IONERS BEING CONTRARY TO THEAFORE SAID PRONOUNCEMENTS CANNOT BE TAKEN TO BE INTERPRETING THE LEGAL PROVISIONS CORRECTLY AND IS, THUS, OVERRULED.' THUS, WE ARE UNABLE TO CONCUR WITH THE VIEW EXPRESS ED BY THE GUJARAT HIGH COURT IN MOVALIYA BHIKHUBHAI BALABHAI'S CASE (SUPRA). 13. STILL FURTHER, THIS COURT IN SARTI V. HARYANA S TATE INDUSTRIAL AND INFRASTRUCTURE DEVELOPMENT CORPORATION LTD. AND OTH ERS, CWP NO. 9739 OF 2011 DECIDED ON 30.5.2011 DEALING WITH THE ISSUE OF TAXDEDUCTED AT SOURCE UNDER SIMILAR CIRCUMSTANCES HAD RECORDED AS UNDER:- '8. THIS COURT, IN INCOME TAX APPEAL NO. 209 OF 200 4, DECIDED ON 27.10.2010 (COMMISSIONER OF INCOME TAX, FARIDABAD V. BIR SINGH (HUF), BALLABGARH) HAD HELD THAT INTEREST PAID TO THE ASSESSEE UNDER SECTION 28 OF THE LAND ACQUISITION ACT, 1894 (FOR BREVITY, '1894 ACT') ON ENHANCED AMOUNT O F COMPENSATION IN RESPECT OF THE ACQUIRED LAND FALLS FOR TAXATION UNDER SECTION 56 OF THE ACT AS 'INCOME FROM OTHER SOURCES'AND IS EXIGIBLE TO TAX IN THE YEAR OF RECEIPT UNDER CASH SYSTEM OF ACCOUNTANCY. IT HAD ALSO BEEN OBSERVED THAT WHERE T HE ASSESSEE IS NOT MAINTAINING BOOKS OF ACCOUNTS BY ADOPTING ANY SPECI FIC METHOD, IT SHALL BE TREATED TO BE CASH SYSTEM OF ACCOUNTANCY. IN THE PR ESENT CASE, THE INTEREST RECEIVED BY THE PETITIONER WAS ON ACCOUNT OF DELAY IN MAKING THE PAYMENT OF ENHANCED COMPENSATION AND, THEREFORE, WOULD FALL UN DER SECTION 28 OF THE 1894 ACT. SUCH PAYMENT COULD NOT PAR-TAKE THE CHARACTER OF COMPENSATION FOR ACQUISITION OF AGRICULTURAL LAND AND, THUS, WAS NOT EXEMPT UNDER THE ACT. ONCE THAT WAS SO, THE TAX AT SOURCE HAD BEEN RIGHTLY DED UCTED BY THE PAYER.' 14. IN VIEW OF THE ABOVE, THE TAX AT SOURCE HAS BEE N RIGHTLY DEDUCTED AND THE PETITIONERS CAN CLAIM THE REFUND, IF ANY, ADMIS SIBLE TO THEM BY FILING THE INCOME TAX RETURNS IN ACCORDANCE WITH LAW.' 10. AS AGAINST THE PROVISIONS OF SECTION 56(2)(VIII ) READ WITH SECTION 57 (IV) AND SECTION 145A(B) AND THE JUDICIAL POSITION AS DISCUS SED ABOVE, THE ASSESSMENT ORDER PASSED BY THE AO U/S 143(3) OF THE INCOME TAX ACT, 1961 FAILED TO ADD THE INTEREST INCOME OF RS. 37,80,155/- BEING 50% OF THE TOTAL INTEREST INCOME OF RS.75,60.310/-UNDER THE HEAD OF 'INCOME FROM OTHER SOURCES'. 11. IN THIS CONTEXT EXPLANATION 2 OF THE SECTION 26 3 OF THE IT. ACT, 1961 INSERTED BY THE FINANCE ACT, 2015 W.E.F. 01/06/2015 REPRODUCED AS UNDER :- 'EXPLANATION 2 :FOR THE PURPOSES OF THIS SECTION, I T IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER :- (A)THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; (B)THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIRING INTO THE CLAIM; (C)THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH A NY ORDER, DIRECTION OR INSTRUCTION ISSUED BY THE BOARD UNDER SECTION 119; OR (D)THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY THE JURISD ICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF ASSESSEE OR ANY OTHER PERSON.' IN VIEW OF THE ABOVE CLEAR PROVISIONS OF THE ACT, A S THE ASSESSMENT ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH THE PROVISIONS OF TH E INCOME TAX ACT, 1961 AND IN ACCORDANCE WITH THE DECISION RENDERED BY JURISDI CTIONAL HIGH COURT AND SUPREME COURT BY REJECTING THE SLP, THEREFORE, THE ORDER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. 12. IN THIS REGARD, THE DECISIONS RELIED ON BY THE AR IN THE CASE OF L.G. ELECTRONICS INDIA (P) LTD. (SUPRA) IS NOT APPLICABLE IN THE INS TANT CASE BECAUSE IN THE SAID DECISION IT HAS BEEN HELD THAT LIMITATION FOR REVIS ION OF ORDER U/S 263 WOULD RUN 13 FROM THE DATE OF REGULAR ORDER OF THE ASSESSMENT. I N THE INSTANT CASE, THE ASSESSMENT WAS MADE ON 24.11.2015 AND LIMITATION FO R ORDER U/S 263 IS YET TO EXPIRE. 12.1 FURTHER CONTENTION OF THE AR IS THAT THE CLAIM OF EXEMPTION STANDS ACCEPTED AND ALLOWED AFTER DUE ENQUIRY IN TWO SEPARATE ORDER S, ONE U/S 143(3) OF THE ACT AND ANOTHER U/S 147/143(3) OF THE ACT. AR CONTENDED THAT IT IS THUS NEITHER A CASE OF LACK OF ENQUIRY BY THE ASSESSING OFFICER OR INAD EQUATE ENQUIRY DURING THE PROCEEDINGS. THE ABOVE CONTENTION OF THE AR IS ALSO NOT SUSTAINABLE. AS IN THE ASSESSMENT MADE U/S 143(3), THE AO ERRONEOUSLY ALLO WED THE EXEMPTION U/S 10(37) TO THE ASSESSEE ON THE BASIS OF DECISION IN THE CASE OF GHANSHYAM (SUPRA), THEREFORE, THE AO INITIATED PROCEEDINGS U/S 147 WHI CH WAS DROPPED SUBSEQUENTLY AFTER OBJECTION BY THE ASSESSEE. AS AO WAS OF THE V IEW THAT ISSUE COULD NOT BE RESOLVED U/S 147, THEREFORE, PROPOSAL WAS SENT FOR REVISION U/S 263 OF THE INCOME TAX ACT, 1961. ALTHOUGH THE PROPOSAL WAS RECEIVED F ROM THE AO, THE NOTICE U/S 263(1) WAS ISSUED BY THE UNDERSIGNED AFTER EXAMININ G THE RECORD AND AFTER BEING SATISFIED THAT THE ASSESSMENT ORDER U/S 143(3) PASS ED BY THE AO IS PRIMA FACIE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF REVENUE AND IT IS A FIT CASE TO ISSUE NOTICE U/S 263. THERE IS NO PROVISION UNDER T HE INCOME TAX ACT, 1961 WHICH PROHIBITS INITIATION OF PROCEEDINGS U/S 263 ON THE BASIS OF PROPOSAL FROM THE AO. THERE IS ALSO NO PROVISION UNDER THE INCOME TAX ACT , 1961 THAT PROHIBITS ACTION U/S 263 AFTER DROPPING THE PROCEEDINGS U/S 147 OF THE I NCOME TAX ACT, 1961. IN THIS CONTEXT, IT IS NOT MATERIAL WHETHER AO COULD HAVE P ROCEEDED TO COMPLETE THE ASSESSMENT U/S 143(3)/147 INSTEAD OF DROPPING THE P ROCEEDINGS. AS PROCEEDINGS U/S 147 WERE DROPPED AND ESCAPEMENT OF INCOME COULD NOT BE BROUGHT TO TAX BY THE AO BY RECOURSE TO ACTION U/S 147, THEREFORE, PROPOSAL FOR ACTION U/S 263 WAS SENT BY THE AO. THE ACTION U/S 263 IS CALLED FO R, NOT BECAUSE OF LACK OF ENQUIRY BUT BECAUSE THE ASSESSMENT ORDER WAS NOT PA SSED IN ACCORDANCE WITH THE PROVISIONS OF THE INCOME TAX ACT, 1961 AND IN A CCORDANCE WITH THE DECISION RENDERED BY JURISDICTIONAL HIGH COURT AND SUPREME C OURT BY REJECTING THE SLP. THEREFORE, LEGAL AND VALID ACTION U/S 263 WAS WARRA NTED IN THE INSTANT ISSUE AND ACCORDINGLY PROCEEDINGS U/S 263 WERE INITIATED AS P ER LAW. 12.2 THE DECISIONS SURESH PAUL BANSAL (SUPRA), VIKR AM ADITYA AND ASSOCIATES (SUPRA) AND PRUDENT ADVISORY SERVICES (P) LTD. (SUP RA) RELIED ON BY THE AR ARE ALSO NOT APPLICABLE IN THE INSTANT CASE. THE ABOVE DECIS IONS ARE RELATED TO DIFFERENT VIEWS TAKEN BY THE CIT IN THE ORDER U/S 263 AS AGAI NST THE ORDER U/S 147/143(3) MADE BY THE AO. IN THE INSTANT CASE, THERE IS NO DI FFERENCE IN VIEWS TAKEN BY THE AO WHILE DROPPING THE PROCEEDINGS U/S 147 AND THE A CTION TAKEN U/S 263. AS DISCUSSED ABOVE, IN VIEW OF THE OBJECTION BY THE AS SESSEE, THE PROCEEDINGS U/S 147 WERE DROPPED AND AS THE ESCAPEMENT OF INCOME CO ULD NOT BE BROUGHT TO TAX BY THE AO BY RECOURSE TO ACTION U/S 147, THEREF ORE, PROPOSAL FOR ACTION U/S 263 WAS SENT BY THE AO. 13. THE ORDER U/S 143(3) PASSED BY THE AO IS IN CLE AR VIOLATION OF THE LEGAL PROVISION WITH IT. ACT AS WELL AS THE JUDICIAL POSITION LAID DOWN. IT IS EVIDENT THAT THE ING OFFICER HAD NOT PROPERLY EXAMINED THE FACTS OF THE CASE AND ACCEPTED THE VERSION OF THE ASSESSEE WITHOUT DUE EXAMINATION OF THE ISSUE OF INTEREST ON ENHANCED COMPENSATION AS DISCUSSED ABOVE. HAD THE C ONSEQUENT ADDITIONS BEEN MADE, THERE WOULD HAVE BEEN SUBSTANTIAL TAX EF FECT AND THUS THE CAUSE OF THE REVENUE HAS SUFFERED. THEREFORE, I AM OF THEREF ORE CONSIDERED VIEW THAT THE ASSESSMENT ORDER UNDER CONSIDERATION PASSED BY THE ASSESSING OFFICER IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INT EREST OF THE REVENUE AND, THEREFORE, IT NEEDS TO BE SUITABLY REVISED. THEREFORE, THE ASS ESSMENT ORDER PASSED BY THE AO U/S 143(3) OF THE IT. ACT FOR THE AY 2013-14 IS SET -ASIDE U/S 263(1) OF THE IT. ACT, 1961 AND RESTORED TO THE AO FOR MAKING FRESH ASSESSMENT WITH DIRECTION TO ADD THE INTEREST INCOME OF RS. 37,80,155/- BEING 50% OF TOT AL INTEREST AT RS. 75,60,310/-, TO THE ASSESSED INCOME OF THE ASSESSEE. 4. THE LD. PR. CIT RELIED ON THE FOLLOWING FOR PASSING OF ORD ER UNDER SECTION 263. I. THE ASSESSMENT RECORD II. JUDGMENT OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF MANJIT SINGH(HUF) CWP 15006/2015 14 III. AMENDED PROVISIONS OF INCOME TAX ACT,1961, INTRODUCED BY FINANCE (NO.2) ACT, 2009 AS CLAUSE (VIII) IN SUB SECTION2 OF SEC TION 56, CLAUSE (IV) IN SECTION 57 AND CLAUSE(B) IN SECTION 145A INSERTED W.E.F 01/04/2010. IV. TRIED TO DIFFERENTIATE THE APEX COURT JUDGMENT IN THE CASE OF GHANSHYAM (HUF) WITH REFERENCE TO SECTION 28 AND 34. V. RELIED ON PRONOUNCEMENT OF APEX COURT IN THE CASE OF SHYAM LAL NARULA VS. CIT, BIKRAM SINGH VS. LAND ACQUISITION COLLECTOR(LAC), R AMA BHAI VS. CIT, K.S. KRISHNA RAO VS. CIT VI. EXPLANATION 2 OF SECTION 263 OF INCOME TAX ACT,1961. THIS SIMILAR ISSUE HAS BEEN DEALT IN NUMBER OF CASES BY THIS TRIBUNAL AFTER FOLLOWING THE DEVELOPMENTS OVER THE PERIOD OF TIME. THE VARI OUS CASES ARE AS UNDER: 15 5. THE TRIBUNAL AFTER CONSIDERING ALL THE CASE LAWS MENTIONED ABOVE BY THE LD. PR. CIT AND ALSO BY THE AR BEFORE THE LD. PR. C IT HAS HELD THAT THE INTEREST RECEIVED ON ENHANCED COMPENSATION WAS HELD TO BE IN THE NATURE OF COMPENSATION AND NOT INTEREST WHICH IS TAXABLE UNDE R THE HEAD INCOME FROM OTHER SOURCES UNDER SECTION 56 OF THE INCOME TAX AC T,1961. THE RELEVANT PART OF THE ORDER IN THE CASE OF SATBIR & OTHERS VS. ITO, W ARD-1, JIND IN ITA NO. 1429/CHD/2016 DT. 09/07/2018 IS AS UNDER: 16 WE HAVE HEARD THE RIVAL CONTENTIONS. IT IS PERTINEN T TO NOTE HERE THAT INTEREST UNDER THE LAND ACQUISITION ACT CAN BE AWARDED UNDER SECTION 28 OR/AND UNDER SECTION 34 OF THE L AND ACQUISITION ACT, 1894. INTEREST AWARDED UNDER SECTI ON 28 OF LAND ACQUISITION ACT, 1894 IS THE INTEREST ON THE EXCESS AMOUNT OF COMPENSATION AWARDED BY THE COURT OVER THE AMOUNT A WARDED BY THE COLLECTOR. IT IS AWARDED BY THE COURT PAYABL E BY THE COLLECTOR FROM THE DATE ON WHICH THE COLLECTOR TOOK THE POSSESSION OF THE LAND TO THE DATE OF PAYMENT OF SU CH EXCESS INTO COURT. WHEREAS INTEREST UNDER SECTION 34 OF THE LAN D ACQUISITION ACT, 1894 IS GIVEN WHEN THE AMOUNT OF COMPENSATION AWARDED BY THE COLLECTOR IS NOT PAID OR DEPOSITED ON OR BEFORE TAKING POSSESSION OF LAND, SUCH INTEREST IS PAYABLE FROM T HE TIME OF SO TAKING POSSESSION TILL THE DATE OF PAYMENT OF COMPE NSATION. IN THE CASE IN HAND, THE LD. CIT (APPEALS) VIDE HIS OR DER DATED 14.3.2016 HAD ALLOWED THE APPEAL OF THE ASSESSEE FO LLOWING THE DECISION IN CASE OF GHANSHYAM (HUF) (SUPRA), WHERE IN IT HAS HELD INTEREST U/S 28 OF THE LAND ACQUISITION ACT 1984, U NLIKE INTEREST U/S 34 IS AN ACCRETION TO THE VALUE OF THE LAND , HENCE IT IS PART OF ENHANCED COMPENSATION OR CONSIDERATION WHICH IS NOT THE CASE WITH INTEREST U/S 34A. SO ALSO ADDITIONAL AMOUNT U/ S 23(1A) AND SOLATIUM U/S 23(2) FORM PART OF ENHANCED COMPENSATI ON. 12. THE LD. CIT(A), HOWEVER, SUBSEQUENTLY, WHILE RE LYING UPON THE DECISION OF THE HON'BLE HIGH COURT IN THE CASE OF BIR SINGH (HUF) (SUPRA) AND MANJEET SINGH (HUF) (SUPRA) & OTH ERS AS NOTED ABOVE, RECALLED HIS ORDERS DATED 14.3.2016 AND CONF IRMED THE ADDITIONS MADE BY THE ASSESSING OFFICER. 13. UNDISPUTEDLY, THE ISSUE INVOLVED IN THESE APPE ALS IS REGARDING THE TAXABILITY OF INTEREST RECEIVED ON ENHANCED COM PENSATION U/S 28 OF THE LAND ACQUISITION ACT, 1894. NOW, THERE AR E TWO QUESTIONS INVOLVED IN THESE APPEALS, FIRST ISSUE IS REGARDING THE YEAR OF TAXABILITY OF THE INTEREST INCOME WHETHER I T HAS TO TAXED IN THE YEAR OF RECEIPT IN THE LIGHT OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF GHANSHYAM (HUF) (SUPRA ) OR IS TO BE TAXED ON THE BASIS OF APPORTIONMENT FOR EACH YEAR F ROM THE DATE OF ACQUISITION OF LANDS TILL THE RECEIPT OF THE CO MPENSATION IN THE LIGHT OF THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF RAMA BAI (SUPRA); THE SECOND ISSUE INVOLVED IS AS T O WHETHER THE INTEREST AWARDED U/S 28 OF THE LAND ACQUISITION ACT ON ENHANCED COMPENSATION IS TO BE TREATED AS PART OF THE ENHAN CED COMPENSATION AND WILL NOT BE TAXABLE SEPARATELY AS INTEREST INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES ? 14. WE FIND THAT BOTH THESE ISSUES ARE COVERED BY T HE AFORESAID DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F GHANSHYAM (HUF) (SUPRA) HOLDING THE SAME TO BE IN THE NATURE OF COMPENSATION ITSELF. THE COURT ALSO DEALT WITH THE OTHER ASPECT NAMELY, THE YEAR OF TAX AND ANSWERED THIS QUESTION BY HOLDING THAT IT HAS TO BE TESTED ON RECEIPT BASIS, WHICH ME ANS IT WOULD BE TAXED IN THE YEAR IN WHICH IT IS RECEIVED. THE SAID FINDINGS GIVEN IN THE CASE OF GHANSHYAM (HUF) (SUPRA) HAVE BEEN REITE RATED BY THE HON'BLE SUPREME COURT IN THE CASE OF GOVINDBHA I MAMAIYA (SUPRA) OBSERVING AS UNDER: IN SO FAR AS THE SECOND QUESTION IS CONCERNED, THA T IS ALSO COVERED BY ANOTHER JUDGMENT OF THIS COURT IN COMMISSIONER OF INCOME TA X, FARIDABAD VS. GHANSHYAM (HUF) REPORTED IN (2009) 8 SCC 412, 6 ALBEIT, IN FA VOUR OF THE REVENUE. IN THAT CASE, THE COURT DREW DISTINCTION BETWEEN THE INTER EST EARNED UNDER SECTION 28 OF THE LAND ACQUISITION ACT AND THE INTEREST WHIC H IS UNDER SECTION 34 OF THE SAID ACT. THE COURT CLARIFIED THAT WHEREAS COMPENSA TION GIVEN TO THE ASSESSEE OF THE LAND ACQUIRED WOULD BE 'INCOME', THE ENHANCED COMPENSATION/CONSIDERATION BECOMES INCOME BY VIRTUE OF SECTION 45(5)(B) OF 17 THE INCOME TAX ACT. THE QUESTION WAS WHETHER IT WIL L COVER INTEREST AND IF SO, WHAT WOULD BE THE YEAR OF TAXABILITY. THE POSITION IN THIS RESPECT IS EXPLAINED IN PARAS 49 AND 50 OF THE JUDGMENT WHICH MAKE THE FOLL OWING READING: 49. AS DISCUSSED HEREINABOVE, SECTION 23(1-A) PROV IDES FOR ADDITIONAL AMOUNT. IT TAKES CARE OF THE INCREASE IN THE VALUE AT THE RATE OF 12% PER ANNUM. SIMILARLY, UNDER SECTION 23(2) OF THE 1894 ACT THERE IS A PROV ISION FOR SOLATIUM WHICH ALSO REPRESENTS PART OF THE ENHANCED COMPENSATION. SIMIL ARLY, SECTION 28 EMPOWERS THE COURT IN ITS DISCRETION TO AWARD INTEREST ON TH E EXCESS AMOUNT OF COMPENSATION OVER AND ABOVE WHAT IS AWARDED BY THE COLLECTOR. IT INCLUDES ADDITIONAL AMOUNT UNDER SECTION 23(1-A) AND SOLATIU M UNDER SECTION 23(2) OF THE SAID ACT. SECTION 28 OF THE 1894 ACT APPLIES ONLY I N RESPECT OF THE EXCESS AMOUNT DETERMINED BY THE COURT AFTER REFERENCE UNDER SECTI ON 18 OF THE 1894 ACT. IT DEPENDS UPON THE CLAIM, UNLIKE INTEREST UNDER SECTI ON 34 WHICH DEPENDS ON UNDUE DELAY IN MAKING THE AWARD. 50. IT IS TRUE THAT INTEREST IS NOT COMPENSATION. IT IS EQUALLY TRUE THAT SECTION 45(5) OF THE 1961 ACT REFERS TO COMPENSATION. BUT AS DISC USSED HEREINABOVE, WE HAVE TO GO BY THE PROVISIONS OF THE 1894 ACT WHICH AWARD S INTEREST BOTH AS AN ACCRETION IN THE VALUE OF THE LANDS ACQUIRED AND IN TEREST FOR UNDUE DELAY. INTEREST UNDER SECTION 28 UNLIKE INTEREST UNDER SECTION 34 I S AN ACCRETION TO THE VALUE, HENCE IT IS A PART OF ENHANCED COMPENSATION OR CONS IDERATION WHICH IS NOT THE CASE WITH INTEREST UNDER SECTION 34 OF THE 1894 ACT . SO ALSO ADDITIONAL AMOUNT UNDER SECTION 23 (1-A) AND SOLATIUM UNDER SECTION 2 3(2) OF THE 1961 ACT FORMS PART OF ENHANCED COMPENSATION UNDER SECTION 45(5)(B ) OF THE 1961 ACT. 8. IT IS CLEAR FROM THE ABOVE THAT WHEREAS INTEREST UNDER SECTION 34 IS NOT TREATED AS A PART OF INCOME SUBJECT TO TAX, THE INTEREST EA RNED UNDER SECTION 28, WHICH IS ON ENHANCED COMPENSATION, IS TREATED AS A ACCRETION TO THE VALUE AND THEREFORE, PART OF THE ENHANCED COMPENSATION OR CON SIDERATION MAKING IT EXIGIBLE TO TAX. AFTER HOLDING THAT INTEREST ON ENH ANCED COMPENSATION UNDER SECTION 28 OF 1894 ACT IS TAXABLE, THE COURT DEALT WITH THE OTHER ASPECT NAMELY, THE YEAR OF TAX AND ANSWERED THIS QUESTION BY HOLDI NG THAT IT HAS TO BE TESTED ON RECEIPT BASIS, WHICH MEANS IT WOULD BE TAXED IN THE YEAR IN WHICH IT IS RECEIVED. IT WOULD MEAN THAT CONVERSE POSITION I.E. SPREAD OVER OF THIS INTEREST ON ACCRUAL BASIS IS NOT PERMISSIBLE. 15. THE LD. COUNSEL FOR ASSESSEE HAS FURTHER BROUGH T OUR ATTENTION THE LATEST DECISION OF THE HON'BLE SUPREM E COURT IN THE CASE OF CIT VS. CHET RAM (HUF) DATED 12.9.2017 IN C IVIL APPEAL NO.13053/2017 WHEREIN ALSO THE HON'BLE SUPREME COUR T HAS AGAIN REITERATED THE PROPOSITION LAID DOWN IN THE CASE OF GHANSHYAM (HUF) (SUPRA), WHICH WE FIND HAS BEEN FURTHER REIT ERATED IN THE CASE OF UNION OF INDIA VS. HARI SINGH & OTHERS IN C IVIL APPEAL NO. 1504 OF 2017 DATED 15.9.2017, 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 ACQUISITION AC T AND THE LAW LAID DOWN BY THIS COURT IN 'COMMISSIONER OF INCOME TAX, FARIDABA D V. GHANSHYAM (HUF)' [2009 (8) SCC 412] IN ORDER TO ASCERTAIN WHETHER TH E INTEREST GIVEN UNDER THE SAID PROVISION AMOUNTS TO COMPENSATION OR NOT. THE SAID DECISION AS RIGHTLY POINTED OUT BY THE LD. COUNSEL FOR ASSESSEE HAVE BEEN RENDERED BY THE HON'BLE APEX COU RT SUBSEQUENT TO THE DECISION PASSED BY THE HON'BLE JU RISDICTIONAL HIGH COURT IN THE CASE OF MANJEET SINGH(HUF) (SUPRA ) WHICH HAD DEALT WITH THE DECISIONS OF THE HON'BLE APEX COURT IN GHANSHYAM, HUF (SUPRA). THEREFORE, IN VIEW OF THE S AME, THE PROPOSITION LAID DOWN IN GHANSHYAM, HUF (SUPRA) REM AINS AND WHICH HAVING BEEN LAID DOWN BY THE HON'BLE APEX COU RT IS THE LAW OF THE LAND AND HAS TO BE FOLLOWED BY ALL LOWER AUTHORITIES. IN VIEW OF THE ABOVE, WE HOLD THAT THE INTEREST REC EIVED BY THE ASSESSEE DURING THE IMPUGNED YEAR ON THE COMPULSORY ACQUISITION OF ITS LAND U/S 28 OF THE LAND ACQUISIT ION ACT, IS IN THE NATURE OF COMPENSATION AND NOT INTEREST WHICH IS TAXABLE 18 UNDER THE HEAD INCOME FROM OTHER SOURCES U/S 56 OF THE ACT AS HELD BY THE AUTHORITIES BELOW. THE COMPENSATION BEI NG EXEMPT U/S 10(37) OF THE ACT IS NOT DISPUTED. IN VIEW OF T HE SAME THE ORDER PASSED BY THE CIT(APPEALS) UPHOLDING THE ADDI TION MADE BY THE AO ON ACCOUNT OF INTEREST ON ENHANCED COMPEN SATION IS, NOT SUSTAINABLE. 6. SINCE THE CORE ISSUE OF TAXING OF INTEREST RECEI VED ON ENHANCED COMPENSATION STANDS ADJUDICATED IN THE ABOVE REFERR ED CASES IN ACCORDANCE WITH THE DECISIONS OF THE HONBLE SUPREME COURT AND TREATED AS PART OF COMPENSATION EXEMPT FROM TAX, WE HEREBY HOLD THAT T HE ORDER PASSED BY THE ASSESSING OFFICER CANNOT BE HELD TO BE ERRONEOUS SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE. THE ORDER PASSED BY THE LD. P CIT UNDER SECTION 263 IS THEREFORE QUASHED. 7. AS A RESULT, ALL THE ABOVE APPEALS OF THE ASSESS EES ARE ALLOWED. SD/- SD/- . .., # $, (SANJAY GARG) (DR. B.R.R. KUMAR , AM) / JUDICIAL MEMBER %& / ACCOUNTANT MEMBER AG DATE: 31/10/2018 (+! ,-.- COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. $ / CIT 4. $ / 01 THE CIT(A) 5. -2 45&456789 DR, ITAT, CHANDIGARH 6. 8:% GUARD FILE
