Interest on Enhanced Compensation u/s 28 of Land Acquisition Act, 1894 is Exempt u/s 10(37)

ITO Vs Sh. Dhanender Kumar HUF (ITAT Chandigarh)

The issue under consideration is whether interest received u/s. 28 of the Land Acquisition Act, 1894 on compulsory acquisition of agricultural land in the nature of compensation is exempt u/s. 10(37) or chargeable to tax under head ‘Income from Other Sources’?

ITAT states that, it is true that “interest” is not compensation. It equally is true that Section 45(5) of the 1961 Act refers to compensation.

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