Case Law Details
Ashwani Kumar Vs CIT (ITAT Delhi)
ITAT Delhi held that the interest awarded under Land Acquisition Act is not taxable, accordingly, tax on the same cannot be demanded by way of invoking jurisdiction u/s 263 of the Income Tax Act.
Facts- The assessee is an agriculturist and assessee’s land has been acquired by the Govt of Haryana under the Provisions of Land Acquisition Act.
The assessee filed her return of income for the year under consideration on 31.03.2009 showing interest of Rs. 2,41.16.305/- accrued on the said FDRs and also interest received on acquisition of land under the head “Income from other sources”. The Land Acquisition Collector deducted the tax at source from the interest which was deposited to the account of Central Govt. In the return of filed by the assessee the interest was shown as taxable income since the issue regarding taxability of interest of compensation was not settled as on the said date. The said return was processed u/s 143(1) of the Act.
Subsequently, a decision of the Hon’ble Supreme in the case of CIT v. Ghanshyam Dass(HUF), wherein, it has been held that the interest awarded under the Land Acquisition Act is not taxable. The assessee filed application u/s 154 requesting that intimation u/s 143(1) of the Act. AO allowed the application filed by the assessee u/s 154 of the Actby rectifying the mistake and held that the interest awarded is not taxable.
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