Land Acquisition Act Section 28 Interest is Not ‘Interest’: Tribunal Deletes Entire Addition as Capital Receipt

Kantaben Vajubhai Paghadal Vs ITO (ITAT Rajkot)

Assessee’s appeal was delayed by 84 days. Tribunal found the reasons in the affidavit convincing & condoned the delay. On merits, Assessee received interest on enhanced compensation of Rs.18,51,082/- relating to compulsory acquisition of ancestral agricultural land. AO treated the interest as taxable “income from other sources”. CIT(A)/NFAC upheld the addition.

Before Tribunal, Assessee argued that the interest was granted u/s 28 of the Land Acquisition Act, hence it

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