Anant Changu Mokal Vs National Faceless Assessment Centre (ITAT Pune)
ITAT Pune held that interest income on enhanced compensation is contingent and hence not taxable under section 56(2)(viii) of the Income Tax Act. Accordingly, appeal of assessee allowed and order set aside.
Facts- During the year, assessee received enhanced compensation of Rs.1,56,01,648/- and interest on delayed compensation at Rs.2,73,73,947/-, on account of compulsory acquisition of land from Special Land Acquisition Officer. AO held that enhanced compensation is exempt u/s. 10(37) of the Act, accepting assessee’s claim that the land acquired was Rural Agricultural Land beyond 08 kms from the Municipal Limits. However, Assessing Officer held that the interest on enhanced compensation, which was Rs.2,73,73,947/- was taxable u/s. 56(2)(viii) r.w.s. 145B of the Act. Therefore, AO made an addition of Rs.1,36,86,973/-, allowing the deduction u/s. 57(iv) of the Act.
CIT(A) upheld the assessment order. Being aggrieved, the present appeal is filed.
Conclusion- Held that these documents were never filed before the Assessing Officer. In these facts and circumstances of the case, since the documents pertaining to litigation pending before the Hon’ble Bombay High Court and documents pertaining to Bank Account were never filed before Assessing Officer, hence, Assessing Officer had no opportunity to examine the claim of the assessee. Therefore, in the interest of justice, we set-aside the Assessment Order to the Assessing Officer for denovo adjudication. The Assessing Officer shall provide opportunity of being heard to the assessee. Assessee is at liberty to raise all the legal grounds, including the ground that Interest Income is contingent and hence not taxable. Assessee shall file necessary documents before the Assessing Officer.
