Sanjay Bhimrao Patil Vs ITO (ITAT Pune)
ITAT Pune held that interest granted by the reference Court u/s. 28 of the Land Acquisition Act from the date of possession of land till the date of judgment of High Court is an accretion of the value of the land acquired and accordingly not taxable.
Facts- According to the AO, the assessee received an amount of Rs.2,10,45,467/- from Special Land Acquisition Officer, Udgir on account of enhanced compensation on compulsory acquisition of agricultural land belonging to the assessee and interest on enhanced compensation vide order dated 22-04-2008 on the file of Civil Judge, S.D., Ahmedpur.
AO did not accept the submissions of assessee and was of the opinion, the 50% of the interest received on enhanced compensation is taxable under amended provisions u/s. 56 w.e.f. 01-04-2010. AO relied on the judgement of Hon’ble Supreme Court in the case of Bikram Singh reported in 224 ITR 551 (SC) and held interest of Rs.69,30,640/- which is 50% of interest received on enhanced compensation as taxable u/s. 56(2)(viii) of the Act.
CIT(A) also held the interest received u/s. 28 of Land Acquisition Act is taxable u/s. 56(2)(viii) of the Act. Aggrieved by the order of CIT-A, the assessee is before us.
Conclusion- We hold that the interest granted by the reference Court u/s. 28 of the Land Acquisition Act from the date of possession of land till the date of judgment of High Court is an accretion of the value of the land acquired.
Held that respectfully following the decision of Hon’ble Jurisdictional High Court of Bombay in the case of Rupesh Rashmikant Shah, we hold the interest received u/s. 28 of the Land Acquisition Act would not fall within the ambit of the expression interest as envisaged u/s. 145A(b) of the Act.
FULL TEXT OF THE ORDER OF ITAT PUNE
This appeal by the assessee against the order dated 26-10-2016 passed by the Commissioner of Income Tax (Appeals)-2, Aurangabad [‘CIT(A)’] for assessment year 2013-14.
2. We note that this appeal was filed with a delay of 40 days. The assessee filed an affidavit explaining the reasons for delay. On perusal of record and hearing both the parties, we find that the reasons stated by the assessee are bonafide which really prevented the assessee to file the present appeal in time. Therefore, the delay of 40 days is condoned.
3. Ground No. 1 & 2 raised by the assessee challenging the action of CIT(A) in confirming the addition made by the AO under the provisions of sec. 56 of the Income Tax Act “ hereafter the “Act”.
4. It is noted that the assessee is an individual, filed return of income declaring a total income of Rs.52,879/- and claimed refund of Rs.14,27,712/- on account of TDS. The said return was processed u/s. 143(1) of the Act. Under scrutiny, notices u/s. 143(2) and 142(1) of the Act were issued and the assessee appeared in person before the AO and furnished the documents as called for. According to the AO, the assessee received an amount of Rs.2,10,45,467/- from Special Land Acquisition Officer, Udgir on account of enhanced compensation on compulsory acquisition of agricultural land belonging to the assessee and interest on enhanced compensation vide order dated 22-04-2008 on the file of Civil Judge, S.D., Ahmedpur. The said details were reproduced at page 2 of the assessment order which are reproduced as under for ready reference:
