RFCTLARR Act Wins: Section 56(2)(viii) Shown the Door- When Land Is Exempt, Interest Also Is – ITAT Schools Revenue

Malini Vs ACIT (ITAT Chennai)

Assessee received a substantial amount of enhanced compensation along with interest due to compulsory acquisition of agricultural land. In her return of income, she declared the compensation & claimed that the interest received was not taxable, as the land was agricultural & thus outside the scope of “capital asset” under the Income-tax Act.

During scrutiny, AO examined the receipt of compensation & noted that interest of ₹1.94 crore was received on the enhanced9 compensation. Applying section 56(2)(viii) read with section 145A

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