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Judgment
Per Satbeer Singh Godara, Judicial Member:
This assessee’s appeal for Assessment Year 2016-17, arises against the C IT(A)/NFAC, Delhi’s DIN & order No. ITBA/NFAC/S/250/2024-25/1064404501(1) dated 26.04.2024, in proceedings u/s 143(3) of the Income Tax Act, 1961 (in short “the Act”).
Heard both the parties at length. Case file perused.
Delay of 369 days in filing of the instant appe al is condoned in the larger interest of justice in light of Collector Land Acquisition vs. Mst. Katiji & Ors (1987) 167 ITR 471 (SC).
It emerges during the course of hearing that the sole substantive issue between the parties is that of correctness of the learned lower authorities action assessing the assessee’s interest component of land acquisition compensation u/s 28 of the Land Acquisition Act, 1894 , while invoking section 57(iv) r.w.s. 56 r.w.s. 145A(b) of the Act.
Learned Sr. DR representing the departme nt vehemently argued that the instant issue is no more res integra in light of Mahender Pal Narang Vs. CBDT (2020) 423 ITR 13 (P&H) as well as PCIT Vs. Inderjit Singh Sodhi HUF (2024) 161 taxmann.com 301 (Del.) wherein the department has succeede d before their lordships that the impugned interest component ought to be assessed as income from “other” sources only.
The asse ssee on the other hand places stro ng reliance on Movaliya Bhikhubhai Balabhai vs. ITO (2016) 388 ITR 343 (Guj.), Rupesh Rashmikant Shah vs. Union of India (2019 ) 108 taxmann.com 181 (Bo m) and Anvar Ali Poolakkodan Vs. ITO (2025) 173 taxmann.com 633 (Ker) holding that such an interest income on enhanced compensation under the provisions of the Land Acquisition Act, 1894 is not taxable even after the statutory ame ndment in section 57(iv) r.w.s. 56 r.w.s. 145A(b) of the Act.
Faced with this situation, the Revenue could hardly dispute that no valuable guidance on the instant issue o f taxability of interest income on enhanced compensation has come from hon’ble jurisdictional high cour t at Allahabad. That being the case, we hereby quote CIT Vs. Vegetable Products Ltd. (1973) 88 ITR 192 (SC) to decide the issue in the assessee’s favour in very terms. Both the learned lower authorities’ action holding the assessee’s interest income on enhanced land acquisition compensation as taxable stands reversed therefore.
This assessee’s appeal is allowed.