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 forms part of compensation for compulsory acquisition & is exempt ...