Case Law Details
ITO Vs Shri Vinayak Hari Palled (ITAT Bangalore)
Conclusion: Assessee was eligible for exemption under section 10(37) on interest received by him on enhanced compensation as the same partook the character of compensation paid by government on compulsory acquisition of assessee’s agricultural land.
Held: Assessees claimed that interest received by him on enhanced compensation was nothing but compensation and therefore even for the interest portion received, was eligible for exemption u/s. 10(37). AO held that section 56(2)(viii) was unambiguous and include interest of any nature and kind without making any distinction of interest received under different provisions of the Land Acquisition Act, 1894. Hence, the interest income in question could not be considered as compensation or enhanced compensation and not eligible for exemption. It was not disputed by AO that the land acquired was agricultural land and the conditions laid down u/s. 1 0(37)(i) to (iv) are applicable to the land which was in question compulsorily acquired. It was also not in dispute that the interest in question was interest awarded u/s. 28 of the Land Acquisition Act, 1894. Following the decision in case of Movaliya Bhikhubhai Balabhai v. Income-tax Officer-TDS-1-Surat [2016] 70 com45 (Gujarat) it was concluded that interest awarded under section 28 of Land Acquisition Act, 1894 partook the character of compensation paid by government on compulsory acquisition of assessee’s agricultural land and was, accordingly, eligible for exemption under section 10(37).
FULL TEXT OF THE ITAT JUDGEMENT
This is an appeal filed by the revenue against the order dated 10.10.2016 of the CIT(Appeals), Hubli relating to assessment year 2013-14.
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