Surender, Gurgaon V. ITO), Ward-4(3), Gurgaon

ITA 7589/DEL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 1990 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-04-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 30-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K CHOUDHARY
• Assessee Lawyers: SUDHIR YADAV
• Keywords: Earning of tax free income
• Section: 201; 28; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES G, NEW DELHI BEFORE MS. SUSHMA CHOWLA, VICE PRESIDENT DR. B. R. R. KUMAR, ACCOUNTANT MEMBER ITA NO. 7589/DEL/2018 : ASSTT. YEAR : 201 3-14 SURENDER, C/O Y S R & ASSOCIATES, PLOT NO. 214, BASEMENT , NEAR VIGILANCE OFFICE, SECTOR-47, GURGOAN, HARYANA - 122001 VS INCOME TAX OFFICER, WARD-4(3), GURGAON (APPELLANT) (RESPONDENT) PAN NO. CYIPS9304R ASSESSEE BY : SH. SUDHIR YADAV, CA REVENUE BY : SH. N. K. CHOUDHARY, CIT DR DATE OF HEARING: 0 8 . 0 1 .2020 DATE OF PRONOUNCEMENT: 27.04 .2020 ORDER PER DR. B.R.R. KUMAR, ACCOUNTANT MEMBER: THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A GAINST THE ORDER OF LD. CIT (A)-1, GURGAON DATED 27.09.201 6. 2. FOLLOWING GROUNDS HAVE BEEN RAISED BY THE ASSESS EE: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AS WELL AS IN LAW, THE LEARNED CIT (A) HAS ERRED IN CONFIRMING THE ACTION OF LEARNED ASSESSING OFFICER IN THE ASSESSMENT COMPLETED U/S 144 OF THE INCOME TAX ACT, 1961 WITHOUT APPRECIATING THE FACTS OF THE APPELLANTS CASE, PROPERLY. 2. THAT ON THE FACT AND CIRCUMSTANCES OF THE CASE A S WELL AS IN LAW, THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION, MADE BY LEARNED ASSESSING OFFICER, OF RS.92,04,773/- AS INTEREST INCOME OF APPELLANT IGNORING THE FACT THAT SAID INTEREST IS P ART OF COMPENSATION RECEIVED U/S 28 OF THE LAND ACQUISITION ACT, 1894. ITA NO. 7589/DEL/2018 SURENDER 2 3. THAT THE ORDER OF THE LEARNED ASSESSING OFFICER IS BAD IN LAW AS WELL AS ON THE FACTS OF THE APPELLANT S CASE. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA D CLAIMED EXEMPT INCOME OF RS.1,84,09,546/- RECEIVED FROM STATE GOVE RNMENT DRO-CUM- LAC. THE AO NOTED THAT THE ASSESSEE HAD RECEIVED IN TEREST ON ENHANCED COMPENSATION AMOUNTING TO RS. 1,84,09,546/-. THE A. O HELD THAT INTEREST ON ENHANCED COMPENSATION IS TAXABLE U/S 56(2)(VIII) AND AFTER ALLOWING A DEDUCTION OF SUM EQUAL TO 50% OF INTEREST RECEIVED, AS PER THE PROVISIONS OF SECTION 57(1)(V) REMAINING AMOUNT OF RS. 94,11,0 70/- WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 4. BACKGROUND OF THIS CASE IS THAT THE AGRICULTURAL LAND OF THE ASSESSEE WAS ACQUIRED BY HARYANA STATE INDUSTRIAL & INFRASTR UCTURE DEVELOPMENT CORPORATION LTD. (HSIIDC) U/S 4 OF THE LAND ACQUISIT ION ACT, 1894 FOR DEVELOPING INDUSTRIAL AREA IN IMT MANESAR, GURGAON. THE HSIIDC HAS NOT PAID THE COMPENSATION ON PREVAILING MARKET RATE, TH EREFORE, ASSESSEE FILED AN APPEAL BEFORE THE HONBLE COURTS FOR INCRE ASE THE COMPENSATION FOR AGRICULTURAL LAND. THE HONBLE COURTS HAS AWARD ED ENHANCED COMPENSATION U/S 19, 23(1A), 23(2) & 28 OF THE LAND ACQUISITION ACT, 1894. THE TOTAL COMPENSATION INCLUDED RS.1,84,09,54 6/- U/S 28 OF THE LAND ACQUISITION ACT, 1894 WHICH IS MENTIONED AS IN TEREST. 5. THUS, IN THE INSTANT CASE, THE FACT ON RECORD IS THAT THE COMPENSATION RECEIVED CONSISTS OF INTEREST RECEIVED ALONG WITH ENHANCEMENT OF COMPENSATION. THE AMOUNT RECEIVED IS NOT LIABLE TO SECTION 34 WHICH IS ONLY THE INTEREST RECEIVED FOR DELAY IN MAKING THE PAYMENT AFTER THE COMPENSATION AMOUNT IS DETERMINED . THUS, THE INTEREST U/S 28 IS A PART OF THE VALUE OF THE LAND. ITA NO. 7589/DEL/2018 SURENDER 3 6. THE LD. CIT (A) HELD THAT THE INTEREST RECEIVED U/S 28 OF THE LAND ACQUISITION ACT, 1894 IS NOT EXEMPT UNDER THE ACT A S IT COULD NOT PARTAKE THE CHARACTER OF COMPENSATION FOR ACQUISITION OF AG RICULTURAL LAND AND CONFIRMED THE ORDER OF THE ASSESSING OFFICER. 7. THE QUESTION BEFORE US IS WHETHER THE AMOUNT REC EIVED BE TREATED U/S 28 OF THE LAND ACQUISITION ACT, 1894 OR U/S 34 OF LAND ACQUISITION ACT, 1894 AND TAXABLE U/S 56(2)(VIII) OF THE INCOME TAX ACT, 1961. 8. WE HAVE GONE THROUGH THE RECORD AND PERUSED THE JUDGMENT OF HONBLE HIGH COURT OF GUJARAT IN THE CASE OF MB BAL A BHAI VS ITO 70 TAXMANN 45, RAMABAI VS CIT 181 ITR 400(SC), ORDER O F THE DELHI TRIBUNAL IN THE CASE OF JAGMAL SINGH IN ITA NO. 234 0/DEL/2018, SH. AMARCHAND GUPTA 5367/DEL/2018 AND ALSO THE CASES REL IED BY THE REVENUE VIZ. JAGMAL SINGH AND OTHERS VS STATE OF HA RYANA, MANJEET SINGH VS UNION OF INDIA (SC). WE HAVE ALSO PERUSED THE JUDGMENT OF HONBLE APEX COURT IN GHANSHYAM (HUF). THE HONBLE APEX COURT HELD THAT INTEREST PAID ON THE EXCESS AMOUNT U/S 28 OF L AND ACQUISITION ACT, 1894 DEPENDS UPON A CLAIM BY THE PERSON WHOSE LAND IS ACQUIRED WHEREAS INTEREST U/S 34 IS FOR DELAY IN MAKING PAYM ENT. INTEREST U/S 28 IS A PART OF THE ENHANCED VALUE. THE HONBLE SUPREM E COURT HAS CATEGORICALLY HELD THAT INTEREST U/S 34 IS ONLY FOR DELAY IN MAKING PAYMENT AFTER THE COMPENSATION AMOUNT IS DETERMINED . 9. IN THE INSTANT CASE BEFORE US, THE COMPENSATION HAS BEEN INCREASED BY THE ORDER OF THE HONBLE HIGH COURT, HENCE, THE AMOUNT RECEIVED BY THE ASSESSEE BEING THE COMPENSATION RECEIVED U/S 28 OF LAND ACQUISITION ACT, 1894, THE SAME IS EXEMPT U/S 10(37) OF THE INC OME TAX ACT, 1961. ITA NO. 7589/DEL/2018 SURENDER 4 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27/04/2020. SD/- SD/- (SUSHMA CHOWLA) (DR. B.R.R. KUMAR) VICE PRESIDENT ACCOUNTANT MEM BER DATED: 27/04/2020 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR