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Judgment
ORDER
This assessee’s appeal for assessment year 2017-18, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2025-26/1082963033(1), dated 25.11.2025 involving proceedings under section 147 of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties. Case file perused.
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(1)(a) r.w.s. 145A(b) of the Act.
Learned Sr. DR representing the department 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 succeeded before their lordships that the impugned interest component ought to be ass essed as income from “other” sources only.
I have given my thoughtful consideration to the assessee’s pleadings and Revenue’s foregoing vehement contention. It emerges that this tribunal’s recent decision in Pawan Kumar Vs. PCIT (2024) 159 taxmann.com 61 (Del.-Trib.) has distinguished the said cas e law as under:
“3.B ri ef l y s tate d , the ass ess ee i s an i ndi vi du al . H e f il e d his re turn f o r AY 2018 - 19 on 29.08.2018 d ecl ar ing in co me of Rs. 6,35,470/ -. H is re tur n was p roc ess ed un d er se c ti on 143 (1 )( a) o n 28.06.2019. H is c as e was sel ec te d f or co mpl e te s cru ti ny as ses sm en t u n de r th e e - ass ess men t Sche me, 2019 on two issu es, n amel y r ef und cl ai m an d wi nn ing f r om L o tte r y /c ros s wo rd puz zl e/ho rs e r ac es. The L d. A sse ss ing Of f i ce r (" A O" ) se rv ed no ti ce und er se c ti on 143(2 ) up on the as sess ee on 22. 09.20 19 f ol l o wed b y is sue of no ti ce und er s ec ti o n 142(1 ) of the Ac t on 23.11.2020. The L d. AO c om pl e te d the as s ess men t on 22 .01.20 21 unde r s ec ti on 143 (3 ) r. w. sec ti on 143 (3 A) an d 143 (3B ) of th e A c t on in co me re tu rne d wi th the ob se rv ati o n th at on af o re s ai d two issu es n o ad d i ti on is m ad e.
4.In ex er ci se of hi s po we r s ves te d in h i m un de r s ec ti on 263 of th e Ac t, the L d. PC IT hel d th e i mpugn ed or de r of th e L d. AO as er rone ous an d p re ju di ci al to the in te r es t of Rev enue. Ac co rd i ng to Ld . P C IT, the L d. A O shoul d h av e tak en in to con si de r ati o n, th e bin ding d ec is ion of H on'bl e Ju ri sd ic ti on al H igh C our t i.e . Hon'b l e Punj ab & H ar y an a H igh C our t d ate d 19 .02.2020 in the c as e of M ahen de r P al N ar an g vs. CB DT (2020 ) 42 3 IT R 13 (P & H) whe r ein th e Hon' bl e High Co ur t h as d e al t wi th the con tr ove rs y ar i si ng f rom the ju dgm en t of Hon' bl e Sup re me C o ur t in the c ase of C IT vs. Gh ansh y am HU F d ate d 16 th Jul y , 2009 r el ati ng to the tax ab il i ty of in te r es t r ece iv ed on co mp ens ati on or enh anc ed com pens ati on and al so the am e nd men ts /pr ov is ions of se c ti on 56(2) (v i ii ) in tr o duc ed t hr ough Fin an ce Ac t, 2009 ef f ec ti ve f ro m 01.04.2010 on the above is sue, whi ch th e L d. A O f ail e d to d o. The Ld . PC IT p oin te d ou t th at th e S LP f il e d ag ai ns t th e o r de r of th e d ec is ion (su pr a) of the Hon'bl e P & H High Cou r t h as be en di sm is se d b y the Ho n'bl e Su pr em e Cou r t vi de i ts or de r d ate d 4 th M ar ch, 2021 in M ahende r P al N ar ang vs. C B DT (2021) 2 79 T axm an 74 (S C) . He , the ref o re , se t as id e th e i mpug ned as ses sm en t o rd er wi th a d ir ec ti on to p as s an o r de r af resh af ter m ak ing requ is i te enq uir ie s an d p ro pe r v er if ic ati on wi th r eg ar d to tax ab il i ty of in te r es t on enh anc ed co mp en s ati on.
5.Agg r iev ed , th e as sess ee is in ap pe al bef or e the T r ibun al an d al l th e g roun ds rel at e th er e to .
6.The L d. AR sub m i tte d th at th e as ses s men t o r de r was ne i ther er rone ous n or pr eju d ic i al to th e in te r es t of Re venue be c ause (i ) th e L d. A O h as p as s ed th e o r de r af te r m ak ing p rop er enqu i ri es dur ing as ses sm en t p roc ee ding s; (i i) the L d. P C IT h as e xe rc ise d th e jur is d ic ti on unde r se c ti on 263 m erel y b ase d on au di t obj ec ti on, whi ch is n o t pe r mi ss ibl e and ( ii i ) the L d. A O h as v al i dl y hel d th at i n te r es t un de r se c ti on 28 of L an d A cqui si ti on Ac t, 18 94 gr an te d by th e cou r t i s an in te gr al p ar t of e nh anc ed co mpen s ati o n an d e xe mp t un de r sec ti on 10 (37) of the A c t in c ase of th e as ses see .
6.1El abo r ati ng the above con ten ti ons , the L d. A R po in te d ou t th at in no ti ce und er sec ti on 142(1 ) of the Ac t d ate d 23 .11.2020 (co py at P ap e r B ook p age 1 -2), th e Ld . A O re quir ed th e as ses see to f urnish d ocu men tar y evi den ce in supp or t o f cl aim th at th e am ou n t of Rs . 6,86,17 ,767/ - is re ce ive d un de r s ec ti on 28 of the L an d Acqu is i ti on Ac t. Th e as ses see re spon de d v id e l e tte r ( cop y at p ag es 3 -58 of P ap e r Book ) th at the as se s see rec ei ve d enh anc ed com pens ati on on co mpul so ry acqu is i ti on of h is ag ri cul tu r al l an d by H ar y an a G ov t. of R s. 6,86,17 ,767/ - wh i ch incl u de d in te r es t unde r s ec ti on 28 of L and A cqui si ti on Ac t of R s. 3 ,97,56,460 / -wh i ch was p ar t of en h anc ed co mpen s ati on as hel d by the Hon' b l e Sup re me C our t in C IT vs. Gh anshy am HUF (2009) 315 IT R 1 (S C ). It was cl ai m ed th at t he ass ess ee was en ti tl ed to ex em p ti on und er sec ti on 10(37 ) of th e Ac t. The expl an ati o n of th e ass ess ee was ac cep te d by the Ld . A O wh o p as se d the i mpugn ed as se ss me n t or de r d ate d 22 .01. 2021 wi th ou t m ak i ng any ad d i ti on . T he as ses sm en t was c o mpl e te d af te r c ar r yi ng ou t p rop er enqui r ies wh i ch h e ough t to h av e c ar r ie d ou t in r espe c t of the enh anc ed com pens ati on rec ei v ed b y the as se sse e. It is n o t a c as e of 'l ack of enqu ir y'. M er el y b ec ause in h is o rd er the Ld . AO di d n o t m ake el ab or ate d is cuss ion bu t was s ati sf i ed wi th the ex pl an ati on of th e as ses see , th e o r de r coul d no t be h el d to be er ron eous . In suppo r t the dec is ion s of H on'bl e Del hi H igh Cou r t in C IT v s. Sunbe am Au to L td . (2011) 332 IT R 167 ( Del ) an d d ec is ion of Hon' bl e R aj as th an Hi gh Cour t in C IT v s. G anp at R am Bi sno i 296 IT R 292 ( R aj . ) we re c i te d .
6.2The L d. A R in vi te d ou r atte n ti on to Au di t Me mo at p ages 39 9 -402 of P ap e r Boo k in th e c as e of th e as se s see wh er ein IT O ( Aud i t) H is ar r ai se d an au di t ob je c ti on o bse rv i ng th at in te re s t un de r sec ti on 28 of L and Acqu is i ti on A c t of R s. 3,97 ,56,460/ - wa s ch arge abl e to tax u nde r se c ti on 5 6(2 )( vi ii ) of the Ac t an d al so ref e rr ed to the dec is i ons in the c as es of S hri M anj ee t S ingh H UF v. UO I & O th er s in C WP No. 15506 of 201 3; Shr i Punee t S ingh vs. C IT (2019 ) 110 tax m an. co m 116 an d Sh r i M ahen d r a P al N ar ang vs. C B DT in C WP No. 17971 of 2019. Th e Ld . AR con ten de d th at th e o r de r of the Ld . PC IT is me rel y b ase d on the au d i t ob jec tion wi th ou t ap pl y ing hi s in dep end en t m ind and wi thou t c ons id er i ng th e subs equen t dec is ions of Hon' bl e Sup r eme Cou r t in th e c as es of ( i ) C IT vs . Gov in d bh ai M am ai y a ( 2014 ) 52 tax m ann.c om 2 70 (S C) ; ( ii ) U O I v s. H ar i Singh (2018) 91 tax m ann.c om 20 ( SC ); and (i i i) IT O, T DS v. Mu k tan ang ir i M ah eshg i ri in C iv il A ppe al N o. 18475 of 20 I7 d ate d 10.11.2017, wh er ein th e r ati o of d ec isi on of C IT vs . Gh an shy a m ( HUF ) (2009) 181 T ax m an 368 ( SC ) h as be en af f i rm ed . The Ld . A R ci te d dec is ion s where in as sum p ti on of jur is d ic ti on un de r s e c ti on 263 on th e b as i s of au di t ob je c ti on by th e Au di t wi ng of the Dep ar tm en t h as b ee n hel d to be in v al i d.
6.3The L d. A R ex pl aine d th at th e e nh anc ed co mp ens ati on awar d e d b y the ap pel l ate au tho ri ty /co ur t to an as ses see on acqu is i ti on of c ap i tal asse t is ch ar ge abl e to tax as c ap i tal g ain in th e y e ar of r ece ip t as pe r s ec ti on 45(5 ) o f th e Ac t. Ho we ve r, i n th e c as e of an in di vi du al or HUF s uch c ap i tal g ai n f r om com pul so ry acqu is i ti on of ag r icul tu r al l an d be ing c ap i tal as se t i s exe mp t f r om tax un d er sec ti on 10 (37 ) of the A c t.
6.4The L d. A R p oi n te d ou t the d is tin c ti on be twe en in te r es t awar d e d un de r s e c ti on 34 an d in te res t p ai d on exc e ss com pens ati on un de r sec ti on 28 of L and A cquis i ti on Ac t. Whe re as in te r es t un de r s ec ti o n 34 i s p ay abl e f or d el ay in m ak ing p ay m en t af te r tak ing po ss es sion of the acqu ir e d l and , in te r es t un de r sec ti on 28 is awar d ed f o r ac cr e ti on in the v al u e of l and an d i s th e ref o re p ar t of enh anc ed co mp ens ati o n.
6.5In Gh ansh y am' s c as e ( sup r a) , the H on' bl e Sup re me Cou r t he l d th at i n te r es t un de r s ec ti on 28, unl ik e in te res t und er se c ti on 34 i s an ac cr e ti on to th e v al ue an d h ence i t is a p ar t of enh an c ed com pens ati on or co nsi de r ati on wh ich i s no t th e c as e un de r sec ti on 34 of th e 189 4 Ac t.
6.6As to the al l ege d non -cons i de r ati on of th e dec is ion of Hon' b l e P & H H igh C our t in M ahen de r P al N ar an g's c ase ( sup r a) by the Ld . A O, i t i s su bm i tte d th at th e H on'bl e Su pre me Cou r t d is mi ss ed th e S LP of th e as ses s ee f il e d ag ai ns t the s ai d d ec is ion of Hon 'b l e P & H H igh Cou r t i n l im ine an d i t i s a se ttl e d l aw th at t he di sm is s al of S LP in l im ine d oe s no t am o u n t to af f ir m ati o n of the vie w taken b y th e H igh Cou r t. Unl es s th e ju dgm en t of the Hi gh Cour t is af f i r me d, at l e as t, wi th sho r t re asoning , the s am e wo ul d no t am oun t to b ind in g pr ece den t.
6.7The Ld . AR el ab or ate d th at th e ins e r ti on of sec ti on 145 A, sec ti on 145 B, sec ti on 56(2 )( vi i i) an d s ec ti o n 57( iv ) by th e F in an ce (No .2) A c t, 2009 w.e . f . 01.04.2010 do es n o t ch ange the ch ar ac ter of in te re s t und er s ec ti o n 28 of the L and Acqu is i ti on Ac t g r an ted by the cou r t f ro m ' c api tal rec ei p t' f or m ing p ar t of enh ance d com pens ati on as env i s ag ed in se c ti on 45 (5 ) of the A c t to ' re venu e rec ei p t' ch ar ge abl e to tax as in co me f ro m o th e r s our ces . Th e vi e w tak en b y the Ld . A O th at i n te r es t un d er se c ti on 28 of L and Acqu is i ti on A c t r ece i ved by th e as ses see is exe mp t un de r sec ti on 10(37) of the Ac t is n o t con tr ar y to l aw. Hi s ass ess men t or de r i s, th e ref o re, n o t e rr oneo us an d no t l i abl e to b e rev is ed u n de r se c ti on 263 of th e Ac t.
7.The L d. C IT - DR su ppo r te d th e o r de r of the L d. PC IT . He pl ac ed on r eco r d a co py of th e de ci si on of Hon' bl e Pun j ab & H ar y an a H igh Cou r t i n M ah en de r P al N ar ang v . C BDT re po r te d in (20 20) 423 IT R 13 ( P& H ) wh e re in th e H on'bl e H igh Cou r t h el d th at in te r es t re c ei ve d on co mpen s ati on o r e nh anc ed co mp ens ati on unde r L an d Acqu is i ti on A c t, 1894 i s to be tr e ate d as 'in co me f r om o the r s our ces' an d no t und er the h e ad ' c ap i tal g ai ns'. The Ld . C IT -DR dr e w ou r atte n ti o n to p ar a 9 an d 10 of the d ec is ion (su pr a) .
8.We h av e g iven our c aref ul th ough t to th e ri v al sub mi ss ion s an d peru se d the rec or d s. The f ac ts ar e no t in d is pu te . The as se ss ee rec ei ve d in te re s t of R s. 3,97,56 ,460/ - on e nh anc ed co mpen s ati o n f rom H U DA af te r th e com pul so ry acqu is i tion of h is ag ri cul tu r al l and on whi ch T DS amoun ting to R s. 39,7 5,646/ - @ 10 % was al so de duc te d. The as ses see cl ai me d th e s ai d in te re s t as e xe mp t. On peru s al of c as e rec o rd s, the L d. PC IT g ath e re d th at the L d. AO h ad c om pl e te d th e asses sm en t wi th ou t c ar r ying ou t ne ces s ar y an d pr o pe r enqui ry wh ich shoul d h av e bee n m ad e reg ar d i ng ap pl ic abl e ju dg men ts on the tax ab il i ty o f in te re s t on enh an c ed com pens ati on. The Hon' bl e Pun j ab & H ar y an a H igh Cou r t h as given th e f in d ing th at in te r es t rec ei ve d on c om pens ati on or enh an ce d co mpe ns at ion wi l l b e tax ed as per am en de d p rov is i ons in tr o duc ed th ro ugh Fin ance ( No. 2) A c t, 2009 w. e.f . 01.04.2 010 an d the judg men t of the Hon' bl e Sup re me Cour t in the c as e of C IT vs. Gh anshy am HU F woul d no t c om e to th e r escu e of th e as ses see . The L d. P C IT th er ef or e r equi re d th e ass ess ee to sh o w c au se as to why an ap pr op ri ate o rd er un de r s ec ti on 263 of the Ac t b e no t p as se d. In re spon se the as se ssee sub m i tte d th at th e am oun t re ce ive d un de r sec ti on 28 of L an d Acqu is i ti on Ac t i s exe mp t f ro m tax rel ying on the d ec is ion of Del hi B ench of the Tr ibun al in the c as e of Sh ri Pun ee t S i ngh, K ar n al v s. A C IT pron ounce d on 08.1 2.2022 f o r AY 201 1 -12 wh er ein pl ac i ng rel i an ce u pon the de cis ion of Hon' bl e Sup re me Cou r t in th e c ase of Gh anshy am HU F ( s upr a) d ec id ed in f av o ur of th e ass es see . T he subm is si on of th e as sess ee was no t acc e p tabl e to the Ld . P C IT i n vie w of th e d ec is ion of H on'bl e P& H H igh Cour t in M ah end er P al N ar ang v s,. CB DT and d is m iss al of SL P f il ed ag ai ns t i t by the Hon' bl e Sup re me C o ur t. He, th er ef or e, se t as i de the as se ss me n t or de r an d di re c te d th e L d. A O to p as s an or de r af r esh.
9.As to the i ssue of l ac k of ne ces s ar y an d p rop er enqu i ry du rin g as ses sm en t p ro cee d ing, th e L d. A R de mons tr ate d th at in res pons e to no ti ce u nde r sec ti on 142(1 ) o f the Ac t is sue d by the Ld . A O the as ses see subm i tte d th at in te re s t of Rs. 3 ,97,56,460 / -rec ei ve d by the ass e ssee f or me d p ar t of enh an ce d co mpen s ation as hel d b y the Hon' b l e Su pr em e C our t in Gh anshy am H UF's c ase (sup r a) wh ich th e asses see cl ai m ed as ex em p t un de r sec ti on 10(37) of th e Ac t. P ages 1 to 61 of the P ap er B ook ref e r. In o ur opin ion , in th e l igh t o f evi denc e av ai l abl e on re co r ds, i t c anno t be al l ege d as don e by the Ld . PC IT th at i t i s a c as e of 'no enqu i ry' or 'l ack of enqui ry' . No dou b t th at th e L d. A O d i d n o t d i scu ss el ab or ate l y in the as sess men t o r de r bu t th at al one c anno t m ake th e or d er e rr oneou s as hel d b y the Hon' bl e Del hi H igh C our t in Sunbe am Au to L td .'s c ase (sup r a) and H on'bl e R aj as th an H i gh Cour t in G an p at R am B isn oi' s c as e ( sup r a) . An inc or rec t as sum p ti on of f ac ts o r an inc or re c t ap pl i c ati o n of l aw wi l l s ati sf y th e r equi re men t of the o r de r be ing e rr o neous as hel d by the Hon' bl e Sup re me C ou r t i n M al ab ar In dus tr i al C o. L td . vs. C IT 2 43 IT R 83 ( SC ). Non e of th es e el e men ts ex is t in the c ase at h and .
10.Pe rus al of th e o r de r of th e L d. PC IT s ho ws th at he as sum ed th e re vi si on ar y po we r un de r se c ti on 263 o f th e Ac t m ainl y on the groun d th at the L d. AO p as se d th e o r de r no t in ac co r d ance wi th th e bin d ing d ec is ion of H on'bl e P & H Hig h Cou r t in M ah end er P al N ar ang's c as e (s up r a) ag ai ns t wh ich S LP s tan d s d is mi sse d by the Hon' bl e Sup re me C our t. Thi s is no t s o. Du ring ass ess m e n t pro cee d ings in r esp o nse to no ti ce und er s ec ti on 143 (2) and 14 2(1) of the Ac t, wi th ref e r ence to s pec if i c que r y on r ece ip t of in te r e s t u nde r s ec ti on 28 of L an d Acqu is i ti on Ac t, th e as se sse e ex pl ain ed vi de l e tte r at p age s 3 -5 of P ap er Boo k th at in te r es t rec ei ve d un d er sec ti on 28 of th e L an d Acqu is i ti on A c t h as been hel d to b e p ar t of com pens ati on b y Ap ex Cou r t in the c as e of C IT vs . Gh anshy am HUF r epo r te d as (20 09 ) 315 IT R 1, th e s ame be ing exe mp t un d er sec ti on 10(3 7) of the Ac t h as n o t been in cl ude d i n th e to tal inc o me of the as ses see wh il e f il ing r e tu rn of inco m e. The L d. AO ac ce p te d th e expl an ati o n of th e ass ess ee.
11.Th e issu e of am e nde d pr ov is ions of s ec ti on 56 (2) (v i ii ) by the Fin ance Ac t, 2009 and the dec is ion of H on'bl e P & H H igh C o ur t in M ah end er P al N ar ang's c as e was r ai sed b y th e L d. PC IT in no ti ce und er se c ti on 263 on the b as is of au di t ob jec ti on (c opy of au di t m em o of IT O H i s ar at p ages 399 -402 of P ap er B ook ). B ef o re th e Ld . PC IT the as se ssee expl ai ne d th at the amen de d p rov is io ns we r e n o t in conne c ti o n wi th the d ec is ion of Hon'bl e Su pr e me Co ur t in Gh an shy am H UF' s c ase bu t to m ake si mpl e the tax ati on of in te r es t inco me as e arl ie r i t was tax abl e on ac c ru al /c ash b asis on the b as is of acco un ting pr inc ipl e s as hel d by the d ec is ion of Hon' bl e Su pr em e C ou r t in R am a B ai vs . C IT (1990 ) 181 IT R 40 0. It was al s o expl ai n ed th at i nse r ti on of sec ti on 145 A , 145 B, 56(2) (v i i i ) an d 57( iv ) by the F in anc e ( No .2) Ac t, 2009 d i d n o t ch ang e the c h ar ac te r of in te r es t un de r sec ti on 28 of th e L and Acqu is i ti on Ac t f ro m 'c ap i tal rec ei p t' f o r ming p ar t of enh an c ed com pens ati on as env i s ag ed in se c ti on 45 (5 ) of the A c t to ' re venu e rec ei p t' ch arg e abl e to tax as ' inc om e f ro m o the r sou rce s'. It wa s al so e xpl ain ed to the Ld . PC IT th at af te r an al ys ing th e pr ov is io ns of sec ti on 28 an d 34 of L and Acqu is i ti o n A c t the Hon'bl e Sup re me Cour t hel d in the c ase of Gh ansh y am HUF th at i n te res t i s dif f e ren t f r om c om p ens ati on . Ho we ve r, in te res t p ai d on the exce ss am oun t u nd e r se c ti on 28 dep end s upon a cl ai m b y a per son wh ose l and is acqu ir ed whe re as in te r es t und er s ec ti on 34 is f o r d el ay in m ak in g p aym en t. Th is vi tal dif f e renc e ne ed s to be kep t in min d in dec i d ing th is m atte r . In te r es t un de r se c ti on 28 is p ar t of the am oun t of comp ens ati o n where as in te re s t un d er sec ti on 34 i s onl y f or d el ay in m ak i ng p ay men t af te r the com pens ati on am oun t i s de te r min ed . In te r es t und er se c ti on 28 is a p ar t of enh an ce d v al ue of the l an d whi c h is n o t the c as e in the m atte r of p ay men t o f in te r es t un de r s ec ti o n 34. It i s thu s e vi de n t th at the vi e w tak en by th e L d. A O th at in te r es t un de r se c ti on 28 of L and Acqu is i ti on A c t rec ei ve d by the as sess ee is ex em p t un d er sec ti on 10 (37) of the Ac t is n o t con tr ar y to l aw.
12.We n o ti c e th at i n CB DT Ci rcul ar N o. 5, d ate d 03 .06.201 0 rep or te d in (2010) 32 4 IT R ( S t. ) 293, i t i s s tate d th at th e Hon' b l e Sup re me Cou r t in th e c as e of R am a B ai Vs. C IT ( sup r a) h as he l d th at ar re ar s of in tere s t co mpu te d on del ay ed o r enh an ced com pens a ti on sh al l b e tax abl e on acc ru al b asi s. Th is h as c aus ed undue h ar d shi p to the tax p aye rs . Wi th a v ie w to m i tig ate the h ard shi p se c ti on 14 5A h as been subs ti tu te d and cl ause (v i ii ) in sub- sec ti on (2 ) of s ec ti on 56 h as b een i nser te d by the F in ance (No .2) Ac t, 2009 s o as to p ro vi de th at the in te res t r ece iv ed on com pens ati on or on e nh anc ed co mp ens ati on r ef er re d to in cl au se (b ) of s ec ti on 14 5A sh al l b e ass ess ed as in co me f r om o ther sour ces in the ye ar i n whi ch i t is re ce ive d . It i s thus ev id en t th a t th e am en de d p ro vis ions of sec ti on 56 ( 2)( vi i i) of the Ac t r. w. sec ti on 145A we r e b rough t on the s tatu te to nul l if y the ef f ec t of Hon' bl e Sup re me Cou r t' s rul ing in the c as e of R am a B ai an d n o t Gh anshy am HUF . M o reo ve r, i t is b rough t to our no ti ce by th e L d. AR th at th e d ec is ion i n Gh an shy am H UF was p ron ounce d in Jul y, 2016 an d the F in an ce B il l pr opo sing am end men t to s ec ti on 56 was l ai d in Fe bru ar y 2016. So the in te n ti on of the l egi sl ature coul d n ev er be the ov er rul ing of the r ati o l ai d do wn in Gh ansh y am HUF c ase . The i ssu e in R am a B ai c ase inv ol ved the tax ab il i ty i n th e ye ar of rec ei p t. T he f ac ts an d ques ti o ns f or de te r min ati on in R am a B ai' s c as e we r e d if f eren t f ro m thos e of Gh ansh y am HUF 's c ase. The p os i ti on in Gh anshy am HUF' a c as e h as b een af f i rm e d by the Hon' bl e Su pr e me Cou r t in H ar i Sin gh's c as e. Fu r th e r, the Ld . A R sub m i tte d b ef ore u s th at S LP f il e d by th e Re venue in H ari Singh' s c as e h as b een wi th d r awn by th e Rev enue m e ani ng th e reb y th at no w the is sue h as attai ne d c er tain ty .
13.We h ave gone th r ough th e dec is ion of th e H on'bl e P & H H i gh Cour t in th e c ase of M ahen de r P al N ar an g ( sup r a) . In th at c ase th e l and of the as s es see was acqu i re d in AY 2007 -08 an d 200 8 -09. The enh anc ed co mpen s ati on was rec e ive d on 21.03 .2016. In his re tu rn f il e d f o r A Y 2016 - 17 he tr e ate d the in te res t re ce iv ed unde r se c ti on 28 of th e 1894 Ac t as inc o me f r om o th er sou rc es an d cl ai me d de duc ti on f or 50 % as pe r se c ti on 57 (i v) of the 19 61 Ac t. The re tu rn was p roc ess ed und er s ec ti on 143(1 ) of th e Ac t. An ap pl ic ati on un de r se c ti o n 264 was m ad e cl ai m ing th at b y m is take th e as ses see tr e ate d the in te re s t inc om e as inco me f ro m o th er sour ces wh er e as the s ame i s p ar t of enh anced co mp ens ati o n. T he rev is ion al au tho r i ty r eje c te d th e ap pl ic ati o n unde r se c ti on 264 o n 30.1.2019. It was in th is f ac tu al m atr i x th at the as se sse e f il e d wr i t p e ti ti o n bef o re the Hon' bl e P & H Hi gh Cou r t. The ques ti on f or con si de r ati o n was " wh e th er af te r the ins er ti on of se c tion 56(2) (v i ii ) and 57 (i v ) of the A c t w. e.f . 01.04.2010 , c an the as ses see cl ai m th at in te r es t r ece iv ed u nde r se c ti on 28 of the L and A cqui si ti on A c t, 1894 wi l l p ar tak e th e ch ar ac te r of the com pens ati on an d woul d f al l und er the h e ad " c ap i tal g ai n" and no t " inc o m e f ro m o th er s our ces " ? It was ar gue d by the as se s see th at the re i s no am e ndm en t in sec ti on 10 (37) an d by inse r ti on of sec ti ons 56 (2) (v i ii ) an d 57( iv ), the n atu r e of in te r es t und er s ec ti o n 28 of th e 1 894 Ac t wi l l re m ain th at of co mp ens ati on an d d ec is io ns of th e H on'bl e Sup re me Cou r t in th e c as e of Gh an shy am ( H U F) an d the dec is ion o f H on'bl e Gu j r at H i gh Cou r t in Mov al i y a Bhikhu bh ai B al abh ai vs. IT O T DS (20 16) 3 88 IT R 34 3 we r e rel i e d upon.
14.It m ay b e men ti oned th at th e Hon' b l e Sup re me C our t h as af f i rm ed i ts v ie w tak en in Gh an shy am HUF' s c as e an d the dec is ion of Gu jr at H i gh Cou r t i n Mo v al iy a' s c as e in i ts de ci si on in th e c as e of U O I vs. H ar i Singh (201 8) 9 1 tax m ann .co m 20 ( SC ). The d ec is io n of th e Hon' bl e Su pr em e Co ur t in H ar i Singh' s c as e (sup r a) was n o t b rou gh t to the no ti ce of H on'bl e P & H H igh C o ur t wh il e ren de r ing d ec i sion in M ahen de r P al N ar ang's c ase (su p r a) . Hon' bl e P& H H igh Cour t h as thu s ren de re d the dec is ion in M ahen de r P al N ar a ng's c as e in i ts pe cul i ar f ac ts and ci rcu ms tance s. A cco r dingl y , the op ini on o f the L d. PC IT th at the Ld . AO shoul d h av e p asse d the ass ess m en t in ac co r d ance wi th th e am en de d l aw an d b ind ing dec is ion in M ahen de r P al N ar an g's c ase (su pr a) o ve rl oo king the de ci si on of Hon' bl e Sup re me C o ur t in Gh anshy am 's HU F's c as e is n o t sus tai n abl e. R el i anc e of th e Ld . C IT - DR on the d eci si on in M ah end er P al N ar ang' s c as e is mi spl ace d. Nee dl es s to e mph as i s th at i n V.M . S al g ao c ar an d B r os Pv t. L td . vs . C IT 243 IT R 383 ( SC ), the Hon 'bl e Sup re me C our t h as hel d th at an o rd er d is mi ss ing the SL P at the th resh ol d wi th o u t de tail e d re as ons do e s no t cons ti tu te any decl ar ati on of l aw o r a bin ding p re ce den t. The ref o re , o ve re m ph asi sing the f ac t of di sm is s al of S LP in l im ine b y th e Hon' bl e Su p re me Cou r t in M ahen de r P al ' s c as e by the Rev enue is no t of an y l eg al ass is tan ce to i t.
15.R eco r d r eve al s th at th e o r de r of the Ld . P C IT was p ro mp ted sol el y by th e au d i t o bje c ti on . H on'bl e P & H H igh Cou r t h as h e l d in C IT vs . Soh an a W ool l en M il l s (2008) 2 96 IT R 238 ( P& H ) th a t me re aud i t ob jec ti on c ann o t l e ad to an inf eren ce th at th e or de r of th e L d. AO i s er ron eous o r pr eju d ic i al to th e in te res t of the Rev enue.
16.S inc e the or de r o f the L d. AO i s b as e d on th e dec is ion of the Hon' bl e Sup re me Co ur t in Gh anshy am H UF ( sup r a) on th e is sue of tax ab il i ty of in te r es t re ce ive d b y th e as ses see un de r s ec ti on 28 of L an d Acqu is i ti o n Ac t, i t c an at b es t b e s ai d to be a de b ata bl e issu e on wh ich two vie ws ar e p oss ibl e and th e L d. AO ac cep ts one of th e vi e ws . In th is v ie w of th e m atte r too , the L d. P C IT c ann o t assu me rev i sion al ju ri sd ic ti on as hel d b y the H on' bl e Del h i H igh C our t in C IT vs . H indu s tan Co c a Col a B eve r age s P L td . (2011) 331 IT R 192 ( Del . )
17.Acc or d ingl y, on the f ac ts an d in th e c i rcu ms tance s of the c as e as se t ou t ab ov e, we hol d th at th e o r de r of the L d. P C IT i s no t sus tai n abl e . Ac co r di ngl y, we al l o w th e ap pe al of the as ses see an d qu ash th e im pug ned or de r of th e Ld . PC IT.
18.In the re sul t, app e al of th e as ses see i s al l o we d.”
I adopt the above extracted detailed reasoning mutatis mutandis to accept the assessee’s instant sole argument in very terms. Ordered accordingly.
This assessee’s appeal is allowed.