Interest on Delayed Agricultural Land Acquisition Compensation should be Classified as ‘Capital Gain

Anvar Ali Poolakkodan Vs ITO (Kerala High Court) Conclusion: Interest received on delayed compensation for compulsory agricultural land acquisition would be treated as Capital Gain as it was an accrual to the principal compensation amount and therefore, the same couldn’t be treated as interest on compensation under Income from other sources as per section 56(2)(viii). Held: Assessee had received compensation from the State for agricultural land acquired under the Land Acquisition Act, 1894 (LAA). Upon seeking enhancement of the awarded compensation through reference courts, they were gra...