Case Law Details
Umang Sitani Vs ITO (ITAT Delhi)
During the year, the assessee has received Rs.2.58 Cr. on account of compulsory acquisition of his land comprising an amount of Rs.79.17 lacs on account of compensation and Rs.178.92 lacs on account of interest on land compensation, the fact of which is not in dispute. The AO treated the interest u/s 56(2)(viii) r.w.s. 145A(b) and allowed deduction u/s 57(iv).
CIT(A) grossly ignored the judgment of Hon’ble Supreme Court in the case of CIT Vs. Ghanshyam (HUF) and difference between interest received u/s 28 of Land Acquisition Act, 1894 and Section 34 and interest received u/s 37 of the Income Tax Act, 1961. The interest u/s 28 is a part of the amount of compensation whereas interest u/s 34 is only for delay in making payment after the compensation is determined. Interest u/s 28 is a part of enhanced value of the land.
The assessee is produced certificate from the DRO-Land Acquisition Collector stating that interest was given to the assessee u/s 28. The DRO-LAC has also deducted the TDS on the compensation. The ld. CIT(A) held that LAC would not have deducted TDS if it is a part of compensation u/s 28. The ld. CIT(A) further confirmed the addition holding that since TDS is deducted, the amounts falls u/s 34, ignoring the total facts of the case and the certificate given by the DRO-LAC.
We hold that the issue is covered by a number of the judgments of the Co-ordinate Bench of ITAT Chandigarh, to mentioned a few ITA No. 313-318/Chd./2015 and by the Hon’ble Apex Court.
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