Interest on Enhanced Compensation for Acquired Exempt Agricultural Land Not Taxable

Devaraya Pillai Subramanian Vs ITO (ITAT Chennai) The Income Tax Appellate Tribunal (ITAT), Chennai Bench, in the case of Devaraya Pillai Subramanian Vs Income Tax Officer (ITO), allowed the assessee’s appeal, holding that the interest received on enhanced compensation for the compulsory acquisition of exempt agricultural land is also exempt from income tax. This decision addresses the taxability of interest received under Section 28 of the Land Acquisition Act, 1894 (LAA), specifically when the principal compensation itself is exempt. Factual Background The assessee, an individual with ...