PARAMMAL KADEEJA,RANDATHANI V. INCOME TAX OFFICER (WARD 1), TIRUR

ITA 673/COCH/2023

AI Insights

The case involves an appeal by Parammal Kadeeja against the order of the National Faceless Appeal Centre, Delhi, concerning the taxability of interest income received under section 28 of the Land Acquisition Act, 1894, for the assessment year 2015-16. The primary contention was whether the enhanced compensation and interest received, which are consequential to the acquisition of agricultural land, should be exempt from income tax. The Tribunal examined precedents and statutory provisions, ultimately deciding in favor of the assessee, citing the principle that if the primary compensation is exempt, subsequent receipts are also exempt.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 474682 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 26-09-2023
• Other Referred Cases: PCIT vs. Inderjit Singh Sodhi (HUF), Rupesh Rashmikant Shah vs. Union of India, Movaliya Bhikhubhai Balabhai vs. ITO, CIT vs. Vegetable Products Ltd.
• Laws Referred To: Income Tax Act, 1961, Land Acquisition Act, 1894
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V.SWARNALATHA
• Section: 250; 192; 28

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Satbeer Singh Godara, Judicial Member and Shri Amarjit Singh, Accountant Member ITA No. 673/Coch/2023 (Assessment Year: 2015-16) Parammal Kadeeja Poolakkodan House Randathani P.O. Malappuram 676510 [PAN: AJPK2223K] vs. The Income Tax Officer Ward (1), Tirur (Appellant) (Respondent) Appellant by: ------- None ------ Respondent by: Smt. V. Swarnalatha, Sr. D.R. Date of Hearing: 22.08.2024 Date of Pronouncement: 23.10.2024 O R D E R Per Bench This assessee’s appeal for A.Y. 2015-16 arises against the National Faceless Appeal Centre, Delhi [CIT(A)]’s DIN & Order No. ITBA/NFAC/S/250/2023- 24/1054703256(1) dated 28.07.2023 in proceedings u/s. 250 of the Income Tax Act, 1961 (the Act). Case called twice. None appears at assessee’s behest. We accordingly proceed exparte. 2. The assessee pleads the following substantive grounds in the instant appeal: - “1. The appellate order No. ITBA/NFAC/S/250/2023-24/1054703256(1) dated 28.07.2023 of the learned CIT(As) is opposed to law facts and circumstances of the case. 2 ITA No. 673/Coch/2023 Parammal Kadeeja 2. The learned CIT(As) has failed to note the fact that the enhanced compensation and interest for the 1st year at 9% and 15% for the period subsequent to that, forms part of the compensation which is totally exempt from tax since the land acquired is agricultural in nature. 3. The Id. CIT(A) has gone wrong in bifurcating compensation and enhanced compensation as also interest u/s 28 of the LA Act 1894 thereon into taxable and non- taxable under the Income tax Act. 4. The Id. CIT(A) should have found that where compensation itself is exempt subsequent receipts consequent thereto is also exempt under the IT Act. 5. The Id. CIT(A) has failed to appreciate the fact that the compensation awarded by the Court and subsequent order of the Collector granting interest u/ 28 at 9% for one year and at 15% for the subsequent payment are exempt from payment of Income Tax as the compensation itself is exempt from Income tax. 6. For these and such other grounds that may be urged at the time of hearing the entire addition may be deleted.” 3. Suffice to say, the sole issue for adjudication in the given facts and circumstances of the case is that of taxability of assessee’s interest income u/s. 28 of the Land Acquisition Act, 1894 where the lower authorities have quoted section 56(2)(viii) r.w.s. 57(vi) r.w.s. 144(b) of the Act that the issue is no more res integra post facto the statutory amendments in the foregoing terms. 4. Learned Sr. D.R. further quotes hon'ble Delhi high court’s decision in PCIT vs. Inderjit Singh Sodhi (HUF) [2024] 161 taxmann.com 301 (Del.) that the Revenue has succeeded before their lordships. 5. We find in this backdrop that case law Rupesh Rashmikant Shah vs. Union of India [2019] 417 ITR 169 (Bom.); Movaliya Bhikhubhai Balabhai vs. ITO [2016] 388 ITR 343 (Guj.) have decided the very issue of taxability of such an income in assessee’s favour and against the department qua such interest income. That being the case wherein various high courts have taken divergent views and that no guidance coming from the hon'ble jurisdictional high court, we quote CIT vs. Vegetable 3 ITA No. 673/Coch/2023 Parammal Kadeeja Products Ltd., [1973] 88 ITR 192 (SC) that the view favouring the taxpayer has to be taken in such an instance. Ordered accordingly. 6. This assessee’s appeal is allowed. Order pronounced in the open court on 23rd October, 2024 under Rule 34 of The Income Tax (Appellate Tribunal) Rules, 1963. Sd/- Sd/- (Amarjit Singh) Accountant Member (Satbeer Singh Godara) Judicial Member Cochin, Dated: 23rd October, 2024 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin "