Land Acquisition Interest is Capital Receipt: Delhi ITAT

Surender Kumar Vs ITO (ITAT Delhi) Income Tax Appellate Tribunal (ITAT), Delhi Bench, has delivered a significant ruling for assessees receiving compensation from compulsory land acquisition, determining that interest received under Section 28 of the Land Acquisition Act, 1894, should be treated as a capital receipt, forming part of the enhanced compensation, and thus potentially exempt from tax under Section 10(37) of the Income-tax Act, 1961. This decision sets aside a revisional order passed by the Principal Commissioner of Income Tax (PCIT) that sought to tax such interest as ‘income...