NARDEV SINGH,MANAKPUR,PANCHKULA V. INCOME TAX OFFICER, PANCHKULA

ITA 1038/CHANDI/2025

AI Insights

The case involves an appeal by Nardev Singh Manakpur against the order of the CIT(A) which upheld the addition of Rs. 12,69,169 to his income for the Assessment Year 2015-16. This addition was based on interest received on enhanced compensation under section 28 of the Land Acquisition Act, 1894, which the Assessing Officer (AO) taxed as 'Income from other sources' under section 56(2)(viii) of the Income Tax Act, 1961. The Tribunal dismissed the appeal, agreeing with the CIT(A) that the legal provisions post-2010 amendments clearly tax such interest income.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 792029 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2025
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 08-08-2025
• Other Referred Cases: Collector, Land Acquisition v. Mst. Katiji & Others, CIT vs. Ghanshyam Das (HUF), UOI vs. Hari Singh, CIT vs. Govindbhai Mamaiya, PCIT vs. Inderjit Singh Sodhi HUF, Puneet Singh vs. CIT, Ajay Kumar vs ITO
• Laws Referred To: Income Tax Act, 1961, Land Acquisition Act, 1894
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RANJIT KAUR
• Keywords: TDS
• Section: 147; 28

Judgement Text

"आयकर अपीलीय अिधकरण,चǷीगढ़ Ɋायपीठ “बी” , चǷीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “B”, CHANDIGARH HEARING THROUGH: PHYSICAL MODE ŵी लिलत क ुमार, Ɋाियक सद˟ एवं ŵी मनोज क ुमार अŤवाल, लेखा सद˟ BEFORE: SHRI. LALIET KUMAR, JM & SHRI. MANOJ KUMAR AGGARWAL, AM आयकर अपील सं./ ITA No. 1038/Chd/ 2025 िनधाŊरण वषŊ / Assessment Year : 2015-16 Nardev Singh Manakpur, Devi Lal Pinjore Panchkula, Pinjore-134102, Haryana बनाम The ITO Ward-5, Panchkula ˕ायी लेखा सं./PAN NO: DQSPS0318N अपीलाथŎ/Appellant ŮȑथŎ/Respondent िनधाŊįरती की ओर से/Assessee by : None राजˢ की ओर से/ Revenue by : Dr. Ranjit Kaur, Addl. CIT, Sr. DR सुनवाई की तारीख/Date of Hearing : 20/11/2025 उदघोषणा की तारीख/Date of Pronouncement : 09/12/2025 आदेश/Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order of the Ld. CIT, Appeal Addl/JCIT(A)-1, Delhi dt. 18/06/2024 pertaining to Assessment Year 2015-16. 2. It has been brought to our notice that, that the present appeal is barred by limitation by 342 days, however no condonation application filed by the assessee. Considering that the issue involved is purely legal in nature, and respectfully following the ratio laid down by the Hon’ble Supreme Court in Collector, Land Acquisition v. Mst. Katiji & Others [(1987) 167 ITR 471 (SC)]*, which emphasizes that substantial justice should prevail over technical considerations, we condone the delay in filing the appeal. 3. The assessee is an individual who did not file a return of income for the Assessment Year 2015-16. Proceedings u/s 147 of the Income Tax Act, 1961 were initiated based on information that the assessee had received interest on enhanced compensation amounting to Rs. 25,38,337/-. The assessee Printed from counselvise.com 2 subsequently filed a return declaring an income of Rs. 1,32,400/-. During the assessment proceedings, the Assessing Officer (AO) observed that the assessee had claimed the interest received u/s 28 of the Land Acquisition Act, 1894 as exempt u/s 10(37) of the IT Act. However, relying on the provisions of Section 145A(b) and Section 56(2)(viii), the AO held that interest received on enhanced compensation is taxable as \"Income from other sources\". Consequently, the AO allowed a statutory deduction of 50% u/s 57(iv) and made an addition of Rs. 12,69,169/- (being 50% of Rs. 25,38,337/-) to the total income of the assessee. 4. The Ld. CIT(A) adjudicated the appeal by upholding the order of the AO and dismissing the assessee's grounds. The Ld. CIT(A) observed that while the assessee relied heavily on the Hon'ble Supreme Court’s decision in CIT vs. Ghanshyam Das (HUF) to argue that interest u/s 28 is part of compensation, the legal landscape had significantly shifted with the Finance (No. 2) Act, 2009. The appellate authority noted that Section 56(2)(viii) and Section 145A(b) were specifically introduced w.e.f. 01.04.2010 to tax interest on compensation on a receipt basis under \"Income from other sources\". In arriving at this conclusion, the Ld. CIT(A) placed strong reliance on the recent judgment of the Hon'ble Delhi High Court in PCIT vs. Inderjit Singh Sodhi HUF (dated 08.04.2024), which held that the conclusions in Ghanshyam Das are unsustainable for the period post the 2010 amendments. Consequently, the Ld. CIT(A) confirmed the addition of Rs. 12,69,169/-, holding that the AO had correctly applied the amended statutory provisions. 5. Feeling aggrieved by the order the assessee is in appeal before us, on the grounds mentioned in the memo of appeal. 6. The Ld. Counsel for the assessee submitted that the interest received amounting to Rs. 25,38,337/- was on account of enhanced compensation u/s 28 of the Land Acquisition Act, 1894. It was vehemently argued that the Hon'ble Supreme Court in CIT vs. Ghanshyam Das (HUF) (315 ITR 1) has settled the law that interest u/s 28 is part of the enhanced value of the land and thus Printed from counselvise.com 3 partakes the character of compensation, distinct from interest u/s 34 which is for delay. Therefore, such receipt falls within the exemption provided u/s 10(37) of the Act. The counsel further relied on the Supreme Court’s subsequent decision in UOI vs. Hari Singh (2017) and CIT vs. Govindbhai Mamaiya (2014) to bolster the claim that the principle laid down in Ghanshyam Das remains the \"law of the land\". It was also contended that the 2010 amendment was intended to overcome the difficulty arising from Rama Bai vs. CIT regarding accrual vs. receipt basis, and was not meant to override the classification of interest u/s 28 as compensation itself. 7. Per contra, the Ld. Departmental Representative (DR) relied on the findings of the lower authorities, asserting that the statutory amendments are unambiguous. The DR contended that Section 56(2)(viii) acts as a specific charging section that brings interest on compensation—whether original or enhanced—to tax under \"Income from other sources\". It was submitted that the legislative intent post-2010 is clear: all interest received on compensation is taxable in the year of receipt u/s 145A(b), subject to a standard 50% deduction u/s 57(iv). The DR argued that the decision in Ghanshyam Das pertains to the pre-amendment era and that the recent jurisdictional and High Court rulings, specifically Puneet Singh vs. CIT (P&H) and Inderjit Singh Sodhi (Delhi HC), have clarified that the statutory amendments override the earlier judicial interpretation regarding exemption u/s 10(37) for interest income. The Ld.DR relied upon the decision of the Coordinate Bench in Ajay Kumar vs ITO (ITA No. 463/Chd/2023), forming part of the consolidated order in land-acquisition matters. Therefore, the addition made by the AO is in strict accordance with the prevailing law. He 8. We have carefully considered the rival submissions and examined the record. We observe that the Coordinate Chandigarh Bench, in the case of Ajay Kumar (supra), has already adjudicated identical arguments. The Bench ruled that interest on compensation falls within the ambit of Section 56(2)(viii) and is taxable in the year of receipt pursuant to Section 145B(1). The Bench explicitly rejected the applicability of Section 10(37) to the interest Printed from counselvise.com 4 component and clarified that claiming TDS credit is contingent upon the income being offered to tax. The facts in the instant case are materially identical. 9. In respectful adherence to the binding precedent of the Coordinate Bench in Ajay Kumar, we affirm the Ld. CIT(A)'s decision to sustain the addition. The assessee has failed to adduce any distinguishing features or contrary legal propositions that would justify a departure from the settled view of this Bench. 10. In the result, appeal of the Assessee is dismissed. Order pronounced in the open Court on 09/12/2025 Sd/- Sd/- मनोज क ुमार अŤवाल लिलत क ुमार (MANOJ KUMAR AGGARWAL) (LALIET KUMAR) लेखा सद˟/ ACCOUNTANT MEMBER Ɋाियक सद˟ /JUDICIAL MEMBER AG आदेश की Ůितिलिप अŤेिषत/ Copy of the order forwarded to : 1. अपीलाथŎ/ The Appellant 2. ŮȑथŎ/ The Respondent 3. आयकर आयुƅ/ CIT 4. आयकर आयुƅ (अपील)/ The CIT(A) 5. िवभागीय Ůितिनिध, आयकर अपीलीय आिधकरण, चǷीगढ़/ DR, ITAT, CHANDIGARH 6. गाडŊ फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "