Sh. Shamsher Singh, Gurgaon V. ITO, Gurgaon

ITA 6615/DEL/2016

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 7798 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 27-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Earning of tax free income

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A, NEW DELHI BEFORE SH. R.K.PANDA, ACCOUNTANT MEMBER AND SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 685/DEL/2017 ASSESSMENT YEAR 2013-14 RAMESHWAR C/O. YSR & ASSOCIATES, SF-14, VYAPAR KENDRA, SUSHANT LOK-1 GURGAON PAN : AJSPR6942D VS. ITO WARD-3(4) GURGAON ITA NO. 686/DEL/2017 ASSESSMENT YEAR : 2013-14 RATTAN SINGH HUF C/O. YSR & ASSOCIATES, SF-14, VYAPAR KENDRA, SUSHANT LOK-1 GURGAON PAN : AAPHR1848F VS. ITO WARD-3(4) GURGAON ITA NO. 6042/DEL/2016 ASSESSMENT YEAR : 2013-14 OM PRAKASH DHANKHAR C/O. SATYENDRA JAIN & ASSOCIATES, D-1, IIND FLOOR, DEFENCE COLONY NEW DELHI VS. ITO WARD-3(1), 5 TH FLOOR, HSIIDC BUILDING, UDYOG VIHAR, GURGAON 2 ITA NO. 685, 686, 4163/D/2017 ITA NO. 6042, 6615, 5765/D/2016 PAN : AHWPD5422E ITA NO. 4163/DEL/2017 ASSESSMENT YEAR : 2013-14 SANJAY GUPTA, C/OP. YSR & ASSOCIATES, SF- 14, VYAPAR KENDRA, SUSHANT LOK I, GURGAON PAN : AMWPG3091R VS. ITO WARD-4(1), GURGAON ITA NO. 6615/DEL/2016 ASSESSMENT YEAR : 2013-14 SHAMSHER SINGH C/O. YSR & ASSOCIATES, SF- 14, VYAPAR KENDRA, SUSHANT LOK-1, GURGAON PAN : ACRPL1498C VS. ITO WARD-4(2), INCOME TAX OFFICE, 6 TH FLOOR, HSIIDC BUILDING, UDYOG VIHAR GURGAON ITA NO. 5765/DEL/2016 ASSESSMENT YEAR : 2013-14 ASHOK KUMAR GUPTA S/O. SH. PURAN SUKH GUPTA, HOUSE NO. 216, SECTOR-15, PART-1 GURGAON PAN : ABJPG8590R VS. ITO WARD-1(2), GURGAON APPELLANT RESPONDENT 3 ITA NO. 685, 686, 4163/D/2017 ITA NO. 6042, 6615, 5765/D/2016 ASSESSEE BY : SH. SATYENDRA JAIN, CA, SH. SUDHIR YADAV, CA REVENUE BY : SH. N.K.BANSAL, SR. DR DATE OF HEARING : 26.09.2018 DATE OF PRONOUNCEMENT : 27.09.2018 O R D E R PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER: ALL THE SIX APPEALS HAVE BEEN PREFERRED BY THE ASS ESSEES AND THEY INVOLVE IDENTICAL ISSUE. ACCORDINGLY, THEY WER E HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. THE BRIEF FACTS ARE AS UNDER:- (I) ITA NO. 685/DEL/2017 HAS BEEN PREFERRED AGAINST ORDER DATED 24.06.2016 PASSED BY THE LD. CIT (A)-I, GURGA ON FOR ASSESSMENT YEAR 2013-14. THE ASSESSEE IS AN AGRICUL TURALIST AND THE RURAL AGRICULTURAL LAND OF THE ASSESSEE WAS ACQ UIRED BY THE HARYANA STATE INDUSTRIAL & INFRASTRUCTURE DEVELOPME NT CORPORATION LTD. (HSIIDC) UNDER SECTION 4 OF THE LAND ACQUISITI ON ACT, 1894 FOR DEVELOPING INDUSTRIAL AREA IN MANESAR, GURGAON. SIN CE, HSIIDC HAD NOT PAID THE COMPENSATION AT THE PREVAILING MARKET RATE, THE 4 ITA NO. 685, 686, 4163/D/2017 ITA NO. 6042, 6615, 5765/D/2016 ASSESSEE HAD APPROACHED THE LD. ADDITIONAL DISTRICT JUDGE, GURGAON WHO AWARDED ENHANCED COMPENSATION U/S 19, REA D WITH SECTIONS 23(1A), 23(2) AND 28 OF THE LAND ACQUISITI ON ACT. THE ASSESSEE CLAIMED THIS AMOUNT AS EXEMPT INCOME U/S 1 0(37) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT) BUT THE ASSESSING OFFICER DENIED THE CLAIM OF THE ASSESSEE AND MADE ADDITION OF RS. 62,92,124/- UNDER THE HEAD INCOME F ROM OTHER SOURCES AS INTEREST INCOME AFTER ALLOWING DEDUCTION OF 50% U/S 57(IV) OF THE INCOME TAX ACT, 1961. THE ASSESSEES APPEAL BEFORE THE LD. CIT (A) WAS DISMISSED AND NOW THE ASSESSEE HAS AP PROACHED THE ITAT CHALLENGING THE ORDER OF THE LD. CIT (A). (II) ITA NO. 686/DEL/2017 IS THE ASSESSEES APPEAL AGAINST ORDER DATED 28.11.2016 PASSED BY THE LD. CIT (A)-I, GURGA ON FOR ASSESSMENT YEAR 2013-14. IN THIS CASE THE COMPENSAT ION AWARDED WAS RS. 1,37,80,721/- WHICH WAS CLAIMED AS EXEMPT U/S 10(37) OF THE INCOME TAX ACT, 1961 AND THE AO MADE ADDITION O F RS. 68,90,360/- UNDER THE HEAD INCOME FROM OTHER SOURCE S AS INTEREST INCOME AFTER ALLOWING DEDUCTION OF 50% U/S 57(IV) OF THE INCOME TAX ACT, 1961. SINCE THE ASSESSEES APPEAL WAS DISMISSED BY THE LD. CIT 5 ITA NO. 685, 686, 4163/D/2017 ITA NO. 6042, 6615, 5765/D/2016 (A), THE ASSESSEE HAS NOW APPROACHED THE ITAT CHALL ENGING THE ORDER OF THE LD. CIT (A). (III) ITA NO. 6042/DEL/2016 IS PREFERRED BY THE ASSESSEE AGAINST ORDER DATED 15.09.2016 PASSED BY THE LD. CIT (A)-I, GURGAON FOR ASSESSMENT YEAR 2013-14 AND IN THIS CASE THE TOTAL COMPENSATION AWARDED BY THE LD. ADDITIONAL DISTRICT JUDGE WAS 1,37 ,80,721/- WHICH WAS CLAIMED AS EXEMPT BY THE ASSESSEE IN THE RE TURN OF INCOME AND THE AO MADE AN ADDITION OF RS. 68,90,361 /- WHICH, ON APPEAL, WAS UPHELD BY THE LD. CIT (A) AGAINST WHICH T HE ASSESSEE HAS NOW APPROACHED THE TRIBUNAL. (IV) ITA NO. 4163/DEL/2017 IS THE ASSESSEES APPEAL AGAINST ORDER DATED 08.08.2016 PASSED BY THE LD. CIT (A)-I, GURGAON. IN THIS CASE, THE LD. ADDITIONAL DISTRICT JUDGE, GURGA ON HAD AWARDED COMPENSATION OF RS. 1,15,98,011/- WHICH WAS CLAIMED A S EXEMPT BY THE ASSESSEE AND THE AO HAD PROCEEDED TO MAKE AN ADDITION OF RS. 57,99,005/- WHICH WAS UPHELD BY THE LD. CIT (A). CONSEQUENTLY, THE ASSESSEE IS NOW BEFORE THE ITAT CH ALLENGING THE ACTION OF THE LD. CIT (A) IN UPHOLDING THE ADDITION . 6 ITA NO. 685, 686, 4163/D/2017 ITA NO. 6042, 6615, 5765/D/2016 (V) ITA NO. 6615/DEL/2016 IS THE ASSESSEES APPEAL AGAINST ORDER DATED 14.10.2016 PASSED BY THE LD. CIT (A)-I, GURGAON FOR ASSESSMENT YEAR 2013-14. THE COMPENSATION AWARDED I N THIS CASE AMOUNTED TO RS. 1,82,38,736/- WHICH WAS CLAIMED AS EX EMPT AND THE AO MADE AN ADDITION OF RS. 91,19,368/- WHICH WAS UPHELD BY THE LD. CIT(A). THE ASSESSEE IS NOW BEFORE THE ITAT CHALLENGING THE ORDER OF THE LD. CIT (A) IN UPHOLDING THE ADDITION. (VI) ITA NO. 5765/DEL/2016 IS PREFERRED BY THE ASSESSEE AGAINST ORDER DATED 29.08.2016 PASSED BY THE LD. CIT (A)- I , GURGAON FOR ASSESSMENT YEAR 2013-14. THE COMPENSATION AWARDED I N THIS CASE WAS RS. 2,33,13,515/- WHICH WAS CLAIMED AS EXEMPT BY T HE ASSESSEE U/S 10(37) OF THE ACT AND THE AO DENIED TH E CLAIM OF THE ASSESSEE MAKING AN ADDITION OF RS. 1,16,56,757/- UN DER THE HEAD INCOME FROM OTHER SOURCES AS INTEREST AFTER ALLO WING DEDUCTION @ 50% U/S 57(IV) OF THE INCOME TAX ACT, 1961. 3. IN ALL THE APPEALS THE ASSESSEES HAVE CHALLENGED THE ACTION OF THE LD. CIT (A) IN CONFIRMING THE ACTION OF THE ASS ESSING OFFICER IN TREATING THE COMPENSATION RECEIVED AS INTEREST INCO ME OF THE 7 ITA NO. 685, 686, 4163/D/2017 ITA NO. 6042, 6615, 5765/D/2016 ASSESSEES AND NOT CONSIDERING THE SAME AS PART OF T HE COMPENSATION RECEIVED U/S 28 OF THE LAND ACQUISITIO N ACT, 1894. 4. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ONLY ISSUE FOR CONSIDERATION IN ALL THE APPEALS WAS WHETHE R THE INTEREST RECEIVED U/S 28 OF THE LAND ACQUISITION ACT WAS IN T HE NATURE OF INTEREST OR WAS A PART OF THE ENHANCED COMPENSATION AND FURTHER WHETHER THE SAME WAS TAXABLE UNDER THE HEAD INCOME F ROM OTHER SOURCES. IT WAS SUBMITTED THAT PROVISIONS OF SECTIO N 56(2)(VIII) WERE NOT APPLICABLE IN CASES WHERE AGRICULTURAL LAND IS I NVOLVED. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT THE ASSESS EES HAD, BEFORE THE LOWER AUTHORITIES, PLACED RELIANCE ON THE JUDGM ENT OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. GHANSHYAM (HUF) REPORTED IN 315 ITR 1 (SC) WHEREIN THE HONBLE APEX COURT HAD HELD THAT THE INTEREST ALLOWED ON COMPENSATION WAS PART O F THE TOTAL COMPENSATION AND WAS, THEREFORE, EXEMPT FROM LEVY OF INCOME TAX. IT WAS FURTHER SUBMITTED THAT ALTHOUGH THERE WAS AN A MENDMENT IN THE INCOME TAX ACT WITH EFFECT FROM 01.04.2010 SO AS TO TAX THE INTEREST IN THE YEAR OF RECEIPT BUT IN VIEW OF THE J UDGMENT OF THE HONBLE APEX COURT IN THE CASE OF GHANSHYAM HUF (SU PRA) INTEREST 8 ITA NO. 685, 686, 4163/D/2017 ITA NO. 6042, 6615, 5765/D/2016 CONTINUED TO BE PART OF THE COMPENSATION AND, THERE FORE, THIS AMENDMENT DID NOT CHANGE THE LEGAL POSITION REGARDI NG INTEREST AND THE SAME WAS TO BE TREATED AS PART OF COMPENSATION NOTWITHSTANDING THE AMENDMENT. THE LD. AUTHORISED REPRESENTATIVE ALSO PLACED RELIANCE ON THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF UNION OF INCOME & ORS. VS . HARI SINGH & ORS. [IN CIVIL APPEAL NO. 15041/2017] WHEREIN VIDE J UDGMENT DATED 15 TH SEPTEMBER, 2017 THE HONBLE APEX COURT IN A BUNCH OF 34 CIVIL APPEALS AND 2 WRIT PETITIONS HAS HELD THAT WHILE DET ERMINING AS TO WHETHER THE COMPENSATION PAID WAS FOR AGRICULTURAL L AND OR NOT, THE ASSESSING OFFICER(S) WILL KEEP IN MIND THE PROVISIO NS OF SECTION 28 OF THE LAND ACQUISITION ACT AND THE LAW LAID DOWN BY THE APEX COURT IN CIT VS. GHANSHYAM (HUF) (SUPRA) IN ORDER T O ASCERTAIN WHETHER THE INTEREST GIVEN UNDER THE SAID PROVISION AMOUNTS TO COMPENSATION OR NOT. THE LD. AUTHORISED REPRESENTAT IVE SUBMITTED THAT IN VIEW OF THIS JUDGMENT OF THE HONBLE APEX CO URT IT WAS VERY MUCH EVIDENT THAT THE INTEREST WAS PART OF THE COMP ENSATION AND WAS NOT TAXABLE. IT WAS PRAYED THAT THE IMPUGNED ORD ERS OF THE LD. CIT (A) BE SET ASIDE AND THE AO BE DIRECTED TO DELE TE THE ADDITIONS. 9 ITA NO. 685, 686, 4163/D/2017 ITA NO. 6042, 6615, 5765/D/2016 5. THE LD. SR. DEPARTMENTAL REPRESENTATIVE VEHEMENT LY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND A RGUED THAT IT WAS NOT CLEAR FROM THE JUDGMENT RELIED UPON BY THE L D. AR AS TO WHETHER THE INTEREST WAS IN THE NATURE OF COMPENSATIO N OR NOT. 6. ON A QUERY FROM THE BENCH THE LD. AUTHORISED REP RESENTATIVE AS WELL AS THE LD. SR. DEPARTMENTAL REPRESENTATIVE AGREED THAT THE ISSUE CAN BEST BE EXAMINED AND VERIFIED BY THE ASSE SSING OFFICER. 7. ACCORDINGLY, WE RESTORE ALL THE SIX APPEALS TO T HE OFFICE OF THE RESPECTIVE ASSESSING OFFICER (S) WITH THE DIRECTION TO DETERMINE AS TO WHETHER THE INTEREST PAID AMOUNTED TO COMPENSATION O R NOT AND FOLLOW THE JUDGMENT OF THE HONBLE APEX COURT AS REN DERED IN THE CASE OF CIT VS. GHANSHYAM HUF (SUPRA) AS HAS BEEN D IRECTED IN CIVIL APPEAL NO. 15041 OF 2017 IN THE CASE OF UNION OF INDIA & ORS. VS.HARI SINGH & ORS. (SUPRA). WE ALSO DIRECT THE RE SPECTIVE ASSESSING OFFICER(S) TO PROVIDE REASONABLE OPPORTUN ITY TO THE ASSESSEES BEFORE THE ADJUDICATING THE ISSUE AS PER LAW AND AS PER THE DIRECTIONS OF THE HONBLE APEX COURT AS AFORESA ID. WE ALSO DIRECT 10 ITA NO. 685, 686, 4163/D/2017 ITA NO. 6042, 6615, 5765/D/2016 THE RESPECTIVE ASSESSEES TO FULLY CO-OPERATE WITH TH E ASSESSMENT PROCEEDINGS. 8. IN THE FINAL RESULT, ALL THE SIX APPEALS OF THE RESPECTIVE ASSESSEES STAND ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH SEPTEMBER, 2018. SD/- SD/- (R.K.PANDA) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATE: 27 TH SEPTEMBER, 2018 *BINITA* COPY OF ORDER TO: - 1) THE APPELLANT; 2) THE RESPONDENT; 3) THE CIT; 4) THE CIT(A)-, NEW DELHI; 5) THE DR, I.T.A.T., NEW DELHI; TRUE COPY BY ORDER ITAT, NEW DELHI 11 ITA NO. 685, 686, 4163/D/2017 ITA NO. 6042, 6615, 5765/D/2016 DATE OF DICTATION 27 .0 9 .2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 2 7 .09.2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 2 7 .09.2018 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS 2 7 .0 9 .2018 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 2 7 . 0 9 .2018 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 2 8 .0 9 .2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 2 8 .0 9 .2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .0 9 .2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER