Case Law Details
Amardeep Chaudhary Vs ITO (ITAT Chandigarh)
The appeal before Income Tax Appellate Tribunal, Chandigarh challenged the order dated 29.11.2024 passed by the Addl./JCIT(A)-2, Delhi. The assessee raised multiple grounds, primarily contesting the tax treatment of ₹1,66,05,363 received as enhanced compensation along with interest under the Land Acquisition Act, which had been assessed as “income from other sources.” The assessee also challenged the validity of the intimation issued under section 143(1) by the CPC, Bengaluru, and, in the alternative, sought a 50% deduction under section 57 of the Income-tax Act.
There was a delay of 113 days in filing the appeal, for which the assessee sought condonation through an affidavit. After considering the reasons and noting the absence of objection from the Department, the Tribunal condoned the delay and proceeded to decide the appeal on merits.
On the substantive issue relating to taxation of enhanced compensation and interest, the assessee relied on judicial precedents to claim exemption. However, the CIT(A) had upheld the addition by applying section 56(2)(viii), inserted with effect from 1.4.2010. The Tribunal noted that this issue was already examined in detail by a Coordinate Bench in a group of cases decided on 11.11.2025, wherein it was held that after insertion of section 56(2)(viii), enhanced compensation and interest in land acquisition cases are taxable. Following this binding precedent, the Tribunal dismissed the assessee’s challenge to the addition.
The Tribunal also rejected the ground challenging the jurisdiction and validity of the intimation under section 143(1), agreeing with the clear findings recorded by the Addl. CIT(A) and finding no reason for interference.
On the alternative claim, the Tribunal accepted the assessee’s contention that a 50% deduction under section 57 should be allowed. The Assessing Officer was directed to recompute the income accordingly.
As a result, the appeal was partly allowed, with relief confined to the allowance of the 50% deduction under section 57, while the remaining grounds were dismissed. The order was pronounced on 06.01.2026.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
1. Appeal in this case has been filed by the Assessee against the order dated 29.11.2024 passed by the Ld. Addl./JCIT(A)-2, Delhi herein referred to as ‘Addl. CIT(A)’.
2. Grounds of appeal are as under:
1. That the order of Ld. CIT(A) is against the law AMD facts of the case.
2. That the Learned CIT(A) has grossly erred in uploading the illegal order passed by the Assessing Officer wherein an addition of amount of Rs. 1,66,05,363/-was made on account of amount received by the assessee as enhanced compensation along with the interest u/s 28 of the Land Acquisition Act, as income from other sources, whereas the enhanced compensation AMD interest received u/s 23(I-A), 23(2) AMD 28 is exempt as held by the Hon’ble Supreme Court AMD various Hon’ble Courts.
3. That the Learned CIT(A) has grossly erred in uploading the intimation order passed u/s 143(1) by the AO, CPC, Bangalore without appreciating the fact that intimation order is without proper jurisdiction AMD passed beyond the scope AMD powers enshrined u/s 143(1).
4. Without prejudice to the aforesaid grounds of appeal AMD strictly in the alternative the Ld. AO AMD CIT(A), has grossly erred in not allowing the benefit of 50% deduction of said sum duly allowable u/s 57 of the Income Tax Act.
5. That the appellant craves leave to add OR amend the grounds of appeal before the appeal is finally heard AMD disposed off.
3. The Registry has pointed out that there is a delay of 113 days in filing of the appeal before the Tribunal. The Counsel of the Assessee has filed an application along with Affidavit on behalf of the Assessee, making prayer for condonation of delay. The affidavit of the Assessee is as under:
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4. We have considered the reasons given in the Application / Affidavit and keeping in view the facts and circumstances mentioned therein, we are inclined to condone the delay.
5. The ld. DR did not have any objection for condonation of delay. Accordingly, the delay in filing of the appeal is hereby condoned and we proceed to decide the appeal on merit.
6. Appeal on ground Nos. 1 and 5 are general in nature.
7. Appeal on ground No. 2 is against the addition of Rs. 1,66,05,363/- made on account of amount received by the Assessee as enhanced compensation along with interest of the Land Acquisition Act under as ‘income from other sources’.
8. During proceedings before us, ld. Counsel for the Assessee made submissions that the Assessee is entitled for enhanced compensation along with interest u/s 28 of the Income Tax Act, 1961 (in short ‘the Act’) of the Land Acquisition Act and for this purpose he relied on the case laws i.e. ‘CIT vs Ghanshyam (HUF) [(2009) 315 ITR 1 (SC) ]. But the Ld. CIT(A) did not accept the arguments of the Assessee and by noting down the provisions of Section 56(2)(viii) inserted by Finance Act No. 2 of 2009 w.e.f 1.4.2010, disallowed the claim of the Assessee and sustained the addition made by the lower authority. Against the said order of the Ld. CIT(A), the Assessee has filed this appeal before the Tribunal.
9. During proceedings before us, ld. Counsel for the Assessee again cited the case laws of ‘CIT vs Ghanshyam’ (supra) and argued that the Assessee should be allowed enhanced compensation and interest thereon.
10. Per contra, the ld. DR relied on the order of the Coordinate bench of ITAT Chandigarh wherein, the issue in question has been dealt and the Tribunal has already given detailed findings on this issue in its order passed on 11.11.2025 in a group of cases with leading case i.e. ‘Ajay Kumar and Others vs ITO’ in ITA No. 463/Chd/2023 for assessment year 2018-19. It has been pointed out by Ld. DR that in the said case (supra), it has been clearly held that after insertion of section 56(2)(viii), the Assessee cannot be allowed the benefit of enhanced compensation and interest thereon in land acquisition cases.
11. We find that this ground is squarely covered by the detailed findings given by the Coordinate Bench on this issue in the case of ‘Ajay Kumar and Others vs ITO (supra). Accordingly, we are of this considered view that the findings given by the Ld. CIT(A) on this issue does not require any interference. Accordingly, following our own order cited above, Assessee’s appeal on this ground is dismissed
12. The appeal on ground No. 3 is against the order of the Ld. CIT(A) in upholding the intimation order u/s 143(1) by the AO-CPC, Bangalore on the ground that it was without proper justification. On this issue, the Ld. Addl. CIT(A) given a very clear and categorical finding in her order and we are of the considered view that the findings given by the her on this issue needs no interference. Accordingly, Assessee’s appeal on this issue is dismissed.
13. Appeal on ground No.4 is for allowing benefit of 50% deduction of the said sum allowable u/s 57 of the Act. During proceedings before us, ld. Counsel for the Assessee argued that alternatively the Assessee should be allowed 50% deduction as allowable u/s 57 of the Act.
14. Per contra, the Ld. DR relied on the orders of the authorities below.
15. We have considered the arguments of the ld. Counsel for the Assessee as well as that of the Revenue. After considering the submissions, we direct the Assessing Officer to recompute the income of the Assessee keeping in view the allowable deduction to the extent of 50% of the Act, Thus, Assessee’s appeal on this ground is allowed.
16. In the result, Assessee’s appeal is partly allowed.
Order pronounced on 06.01.2026.
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