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Judgment
ORDER
This assessee’s appeal for assessment year 2020-21, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s order dated 05.12.2025 passed in case no. NFAC/2019-20/10458425, involving proceedings under section 147 r.w.s. 144B 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 assessed 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 case law as under:
“3 . B ri efl y s tate d , th e ass ess ee i s an indi vidu al . H e f il e d h is re tu rn fo r AY 2 01 8- 1 9 on 29 .08 .20 18 decl arin g in co m e o f Rs. 6, 35 ,47 0/ -. His re tur n w as p roc ess ed u n d er se c ti on 14 3 (1 )( a) on 28 .0 6.2 01 9. H is c as e was s elec te d f or co mpl e te s cru ti ny asses s men t un de r th e e- ass ess men t Sch em e, 2 01 9 on two issu es, n amel y ref u nd cl aim an d winn in g f r om Lo tte ry / c ros s wo rd p uz zle/ ho rs e rac es. Th e L d. As se ss ing Of fi ce r (" A O") se rv ed no ti c e u nd er se c ti on 1 43 (2 ) up o n the assess ee on 22 . 0 9.2 0 1 9 f oll o wed by is sue of n o ti ce u nd er s ec tio n 14 2(1 ) of the Ac t o n 23 .1 1.2 02 0. Th e L d. AO c omp le te d th e as sess men t on 22 .01 .20 21 un de r s ec ti on 1 43 (3 ) r. w. sec tion 14 3 (3 A) an d 14 3 (3 B ) of th e A c t on in c om e re tu rn e d wi th th e ob serv atio n th a t on afo re s ai d two issu e s n o ad di ti on is m ad e.
4.In ex erc ise of his po we r s ves te d in h im un de r s ec ti on 2 63 of th e Ac t, the Ld . P C IT h el d th e impug n ed or de r of th e L d. AO as errone ou s an d p re ju di ci al to the in te r es t of Rev enu e. Ac c o rd ing to Ld. P C IT, the L d. A O sh oul d h av e tak en in to con si de r atio n , th e b in ding d ec is ion of H on' bl e Ju ri sd ic ti on al H ig h C ou r t i.e . Hon 'b le P un j ab & H ar y an a Hig h C ou r t d ate d 19 .0 2.2 02 0 in the c as e o f Mahen de r P al N ar an g vs. CB DT (2 02 0 ) 4 2 3 IT R 13 (P & H) whe rei n th e Hon' bl e Hig h Co ur t h as de al t wi th th e co n tr o ve rs y ar isi ng f rom the ju d gm en t o f Ho n 'b le Sup rem e C o ur t in th e c ase of C IT vs. Gh ansh y am HU F d a te d 1 6 th Ju l y , 20 09 rel a ti ng to the tax abil i ty of in te res t rece iv ed on co mp e ns a ti on or enh an c ed comp ens a tion an d al so the am e n dm en ts /p rov is ion s of sec ti o n 56 (2 ) (v i ii) i n tr od uc ed thr oug h F in an ce Ac t, 20 09 ef f ec ti ve f ro m 01 .0 4.2 01 0 on th e above is sue, wh ich th e L d. AO f ail e d to do. T he Ld . PC IT p oin te d ou t th at th e S LP f il e d ag ai n s t th e o r de r o f th e d ec is ion (su pr a) of the Hon' ble P &H High Cou r t h as be e n di sm is sed b y th e Ho n 'b le Su pr e me Cou rt vid e i ts or de r da te d 4 th Marc h, 2 02 1 i n M ah en de r P al N ar ang vs. C B DT (2 02 1) 2 7 9 T axm an 74 ( SC). He , the ref ore , se t as id e th e impug n ed asses s men t o rder wi th a d irec tion to pas s an o r de r af resh af ter m ak in g req u is ite enq ui rie s an d pro pe r v erif ic ation wi th reg ar d to tax abil i ty of in te res t o n en h anc ed co mp en s ati on .
5.Ag g rie ved , th e as sessee is in app e al befor e th e T r ibu n al an d all th e g rou n ds rel a t e th ere to .
6.The L d. AR sub m i tte d th a t th e as ses s men t o r de r was ne i th er errone ou s n or pr eju d ic i al to th e in te re s t of R even ue be c ause (i ) th e Ld. A O h as p as s ed th e o rder af te r mak in g p ro p er enqu i ries du ri ng as ses smen t p ro c ee ding s; (i i) th e L d. PC IT h as e xe rc ise d th e j ur is d ic ti on u nd er se ction 2 63 m erel y b ase d on au di t obj ec tion, whic h is n ot pe r mi ss ib le and (ii i ) th e L d. A O h as v al idl y hel d th a t in te r es t un de r sec tion 2 8 of L an d A c qu i si tion Ac t, 1 8 9 4 g ran te d by th e c ou r t is an in tegr al par t of e nh anc ed co mp en s a tio n an d exe mp t u n de r sec tion 10 (37 ) of the A c t in c ase of th e asses s ee .
6.1 El abo ra tin g the above con ten tions , th e L d. A R po in te d ou t th at in no ti ce u nder sec ti on 1 42 (1 ) of th e A c t d ate d 23 . 11 .20 20 (co py at Pape r B ook p ag e 1 -2), th e Ld. AO re qu ir ed th e as se ssee to f urni sh d o cu m en tar y ev iden ce in su pp or t o f cl aim th at th e am ou n t of Rs . 6 ,86 ,17 ,76 7/ - is re ce ive d u n d er s ec tion 28 of th e L an d Acq u is iti on Ac t. T h e as s es see re spon d ed v id e le tte r ( cop y at p ag es 3 - 58 of P ap e r Book) th at the as se s see rec eived enh an c ed comp ens a tion on co mp ul so ry acq u is i ti on of h is ag ric ul tu r al l an d b y Hary an a G ov t. of R s. 6,8 6,1 7 ,7 67 /- wh i ch inc l u ded i n te res t un de r s ec ti on 2 8 of L and A cqui si tion Ac t of R s. 3 ,97 ,56 ,4 60 /-wh i ch was par t of en h an c ed c om pen s ation as hel d by th e Hon ' b le Su p re me C ou r t in C IT vs. Gh ansh y am HUF (20 09 ) 3 15 IT R 1 (S C ). It was cl aim ed th a t t he ass es s ee was en ti tl ed to ex em ption u nd er sec tion 10 (37 ) of th e A c t. The exp l an ati o n of th e assess ee w as ac ce p te d by th e Ld . A O wh o p as se d the i mpu gn ed as se ssm e n t orde r d a ted 2 2 .0 1. 2 02 1 wi th ou t m ak ing an y ad d iti on . T he asses s men t was c o m pl e te d af te r c arr y ing ou t pro per enqui ries wh i ch h e oug h t to h ave c ar rie d ou t in re spe c t of the enh an c ed comp ens a tion rec eiv ed b y th e as sesse e. I t i s n ot a c as e of ' l ack of enqu i ry'. M erel y b ec au se in h is o rd er the Ld. AO d id n o t m ake el ab or ate d is cuss ion bu t was s atisf i ed wi th the ex p l an a ti on o f th e as s es see , th e o r de r coul d no t be h el d to be erron eo u s. In supp or t th e d ec is io n s of H on' bl e Delh i H ig h Cou rt in C IT v s. Su nbe am A u to L td. (2 01 1) 3 32 IT R 1 67 (D el) an d d ec is ion of Hon' ble Raj as th an Hi g h Cour t in C IT vs. G anp at R am Bis n oi 29 6 IT R 29 2 (R aj. ) we re c i te d .
6.2 The L d. A R in vi te d ou r a tten tion to Au d i t Me mo a t pag es 39 9-40 2 of P ap e r Book in th e c as e of th e as se s see wh er ein ITO (Aud it) H is ar r ai sed an au d i t obje c ti on o bse rv in g th at in te re s t u n der sec tion 28 of L an d Acqu is ition A c t of R s. 3 ,97 ,56 ,46 0/ - wa s ch argeab l e to tax u n de r se c ti on 5 6(2 )(vi ii ) of th e Ac t an d al so ref e rred to th e dec is ions in the cas es of Sh ri Man jee t Sin gh HU F v. UO I & O th er s in C WP No. 1 55 06 of 2 01 3; Shr i P un ee t Sin gh v s. C IT (2 01 9 ) 1 10 tax m an . co m 11 6 an d Sh r i M ah en d r a P al N ar a ng vs. C B DT in C WP No. 17 97 1 of 20 19 . Th e Ld . AR con ten de d th at th e o rde r of the Ld . PC IT is m erel y b ase d on the au dit ob jec tion wi th ou t ap pl yin g h i s in depe n den t m in d a nd wi tho u t c on s ider ing th e sub s eq uen t dec is ions of Hon ' bl e Sup r eme C ou r t in th e c as es of (i ) C IT vs. Go v in d bh ai Mamaiy a (20 14 ) 52 tax mann .c om 2 70 (S C) ; (ii ) U O I v s. Har i Sin g h ( 20 18 ) 91 tax m an n.c om 20 (SC ); an d (i ii ) IT O, TD S v. Mu k tan ang ir i M ah esh g iri in C iv il A ppe al N o. 18 47 5 of 20 I7 d ate d 1 0.1 1.2 01 7, wh er ein th e r ati o of dec i sion o f C IT vs. Gh an shy am ( HUF ) (2 00 9) 1 81 T ax m an 3 68 ( SC ) h as be e n aff i rmed . Th e Ld . A R ci te d de cis ion s wh e re in assu m p tion o f ju ris d ic ti on u n d e r s e c ti on 2 63 on th e b as is of au di t o bj ec ti on by th e Au di t wi ng of the D ep ar tm en t h as b een hel d to be in v al id.
6.3 Th e Ld. A R ex pl aine d th at th e e nh an c ed co mp ens a ti on awar d e d b y the ap pell a te au tho ri ty /co u rt to an as sessee o n acq u is i tion of c api tal asse t i s ch ar ge abl e to tax as c api tal g ain i n th e y e ar of r ec e 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 divi du al or HUF s uc h c ap i tal g ain f r om comp ul so ry acq u is iti on of ag ric ul tu r al l an d be in g c ap i tal as se t is exe mp t f r om tax u n d er sec ti on 10 (37 ) of the A c t.
6.4 T he Ld. AR poi n te d ou t the d is tin c ti on be twe en in te res t awar d e d un de r s e c ti on 3 4 an d in te res t p aid on exc e s s comp ens a tion u n de r sec tion 2 8 of L an d A cq uis i ti on Ac t. Whe re as in ter es t un de r s e c ti o n 34 is p ay able f or del ay in m akin g pay m en t af te r tak in g po ss es sion of th e acq u ir e d l and , in te res t u n der sec tion 28 i s a war d ed f o r ac cre ti on in th e v alu e o f l and an d is th e ref ore p ar t of e n h anc ed co mp ens ati on .
6.5 In Gh an sh y am' s c as e ( su pr a) , the Ho n 'b le S up re m e Cou r t h e l d th a t in ter es t un de r s ec ti on 28 , un l ik e in teres t un der se c tion 34 is an ac cre ti on to th e v alue an d h enc e i t is a p ar t of enh an c ed comp ens a tion or c o nsi de r ation wh ich is n o t th e c ase u n der sec tion 3 4 of th e 18 9 4 Ac t.
6.6 As to th e al l ege d non -cons i de ra tion of th e dec is ion of Hon ' b le P & H H ig h C our t in Mahen de r P al N aran g ' s c ase (s up ra) by the Ld. A O, i t is su bm i tte d th a t th e H on' bl e Su pre me Cou r t dis mi ss ed th e S LP of th e as ses s e e file d ag ain s t the s ai d d ec is io n of Hon 'b le P & H Hi gh C ou r t i n limin e an d i t is a s e ttl e d l aw th at the di sm is s al of S LP in lim in e d oe s n o t amo u n t to af f irm a tio n of the vie w take n by th e H ig h Cou r t. Un les s th e ju dg m en t o f th e Hi g h Cour t is af fi rme d, at l eas t, wi th sho r t re a sonin g , the s ame wo ul d no t am oun t to bin d in g pr ece den t.
6.7 T he Ld . AR el ab or a ted th a t th e ins e r tion of se c ti on 1 45 A, sec tion 14 5 B, sec ti on 5 6(2 )( vii i) an d s ec ti on 5 7(iv ) by th e F in an ce (No .2 ) A ct, 2 00 9 w.e . f . 0 1.0 4.2 01 0 do es n o t ch an g e the ch ar ac ter of in te re s t un d er sec tio n 28 of the Lan d Acq u is i ti on Ac t gr an ted b y th e cou r t f rom ' c api tal rec eip t' f or m in g p ar t of enh an ce d comp ens a tion as env is ag ed in se c tion 45 ( 5 ) of th e A c t to ' re ven u e rec ei pt' ch ar ge abl e to tax as in c om e f ro m oth e r sou rc es. Th e vi e w tak en by th e Ld . AO th at in te r es t un d er s e c ti on 2 8 o f L an d Acq u is iti on Ac t rece ived by th e as ses see is exe mp t un de r sec ti on 10 (3 7) of th e Ac t is n ot c on trar y to l a w. His ass ess men t or de r is, th e ref ore, no t e rron eou s an d n o t l iabl e to b e rev is ed u n d e r sec ti o n 26 3 of th e Ac t.
7.Th e Ld . C IT - DR su p po r te d th e o r de r of the L d. PC IT . He pl ac ed on reco r d a co p y of th e de ci sio n of Hon ' bl e Pun jab & H ar y a n a H ig h Cou r t in M ah en de r P al N ar ang v . C BD T re po r te d in (20 20 ) 42 3 IT R 1 3 (P& H ) wh e re in th e H on' bl e H ig h C ou rt h el d th at in ter es t rec eiv ed on co mpen s a ti on o r e n h anc ed co mp ens a ti on un de r L an d A cqu is iti o n A c t, 18 94 is to be tre a ted as 'in co me f r om o the r s our ces' an d no t un d er the h e ad ' cap ital g ains' . T h e Ld. C IT-D R dr e w ou r a tten ti o n to p ar a 9 an d 1 0 of th e dec is ion (su p ra).
8.W e h av e g iven our c arefu l th ou g h t to th e riv al sub mi ss ion s an d p eru se d th e rec or ds. Th e f ac ts are n o t in d is p u te . Th e as sess ee rec ei ved in te re s t of R s. 3,9 7,5 6 ,4 60 /- on e n h anc ed co mp en s a ti on f rom HU DA af te r th e com pu l sory ac qu is i tio n of h is ag ri cul tu ral l and on whic h T D S amou n tin g to R s. 3 9,7 5,6 46 /- @ 10 % was also de d uc te d. Th e as ses see cl aime d th e s ai d in te res t as e xe mp t. On p eru sal of c ase rec o rds, the L d. PC IT ga th e re d th at the L d. AO h ad c om pl ete d th e a sses sme n t wi th ou t c arr yin g o u t n e ces sary an d pr oper en qui ry wh ich shou l d h av e b een m ade reg ard i ng app lic abl e ju dg m en ts on the tax ab ili ty o f in tere s t on enh an c ed comp ens a tion. T he Hon' bl e Pun j ab & H ary an a H ig h Cou r t h as g iven th e fin d ing th a t in te r es t rec eive d on c o mpe n s ati on or enh an ce d co mpe n s at ion wi ll be taxed as p er am en de d p rovi s ions in tro du c ed th rou g h F in an ce (No . 2) Ac t, 2 00 9 w. e.f . 01 .0 4.2 01 0 an d the ju dg men t of the Hon' bl e Su pre me Cou r t in th e c as e of C IT vs. Gh an shy am HU F wou ld n o t c om e to th e rescu e of th e asses s ee . Th e L d. P C IT th er ef ore req u i re d th e ass e ssee to sh o w c au se as to why an app rop ri ate o rd er u n de r sec ti on 2 63 of the Ac t b e n o t p as se d. In re sp on se the as se ssee s u bm i tte d th at th e amo un t re ce iv e d un de r sec tion 28 of Lan d A cqu is i tion Ac t is exe mp t f ro m tax rel y ing o n the dec i s ion of Del hi B ench o f the T ribun al in the c as e of Sh ri Pu n ee t S i ngh, K ar n al v s. A C IT p ron ou nc e d on 08 .1 2 .20 22 f or AY 20 1 1 -12 wh er ein p l ac i ng rel ian ce u pon the de ci s ion of Hon ' bl e Sup re me Cou rt in th e c ase of Gh an sh y am HU F ( su pr a) d ec ided in f av o u r of th e ass es see. T he subm is sion of th e as sess ee was n o t acc e p tab le to the Ld . P C IT i n vie w of th e dec is ion of H on' bl e P& H H ig h Co u r t in M ah ender P al N arang v s,. CB DT a nd di sm iss al of SL P fil ed ag ai n s t i t b y the Hon' ble Su pre me C o ur t. He , th e r efo r e, se t as i de th e as se ssm e n t orde r an d dire c te d th e Ld. A O to pas s an or de r af r esh.
9.As to the issu e of l ac k of n ec e ss ary an d p rop er enq u iry du rin g asses s men t p ro c ee d ing , th e L d. A R d em ons tr a te d th a t in res p ons e to n o tice u n de r sec ti on 14 2(1 ) o f th e Ac t is su e d by the Ld. A O th e as se s see subm i tte d th at in te re s t of Rs. 3 ,97 ,56 ,4 60 /-rec ei ved by the asse ssee f or me d p ar t of enh an ce d co mp en s a tion as h el d b y the Hon' b le Su p rem e C ou r t in Gh ansh yam H UF's c ase (su p r a) wh ich th e ass es see cl aim ed as ex em p t u n de r sec ti o n 10 (3 7) of th e Ac t. P age s 1 to 61 of the Pap er B ook ref e r. In o ur opi n ion , in th e lig h t o f evi denc e av ai l ab le on re co r ds, i t c ann o t be all ege d as don e b y the Ld. P C IT th a t i t is a cas e of 'n o en q u iry ' or 'l ack of enq ui ry' . No dou b t th a t th e L d. A O d id n o t d iscu ss el ab or ate ly i n the as sess men t o r de r b u t th a t al on e c an no t m ake th e ord er err o neo u s as hel d b y the Hon ' bl e Del h i H igh C our t in Su nbe am Au to L td.' s c ase (sup ra) and Ho n 'b le R aj as th an H i g h Cour t in G an p at R am B isn oi 's c ase ( su pr a) . An in c or re c t assu m p tion of f ac ts o r an in c orre c t ap pl ic ati on of l a w wi ll s a ti sf y th e req u ire m en t of the o r de r be in g e rro neou s as h el d b y the Hon' ble S up rem e C ou r t in M al ab ar In du s tr ial C o. L td. vs. C IT 2 43 IT R 83 (SC ). Non e of th es e ele men ts ex is t in the c ase a t h and .
10 . Pe rus al of th e o r de r of th e L d. PC IT s ho ws th a t he as su m ed th e re visi on ary po we r u n de r s e c ti on 26 3 of th e Ac t m ainl y on the g rou n d th at the L d. AO p as se d th e o rd e r n ot in ac c or danc e wi th th e bin d in g d ec isi on o f H on' bl e P & H Hig h Cou r t in Mah en der Pal N arang's c as e (s up ra ) ag ai n s t wh ich S LP s tan ds dis mi sse d by the Hon' ble Su p re me C our t. Thi s is no t s o. Du ri ng ass es s m e n t p ro cee di ng s in r espo n se to n o tic e un der s ec ti on 1 43 (2) an d 14 2(1 ) of th e Ac t, wi th ref er ence to s pec ifi c qu e ry o n re c eip t of i n te re s t un de r s ec ti on 28 of Lan d Acq u is ition Ac t, th e as se sse e e x pl ain ed vi de le tter a t p ag e s 3 -5 of P ap er Book th at in te r es t rec eive d u n der sec tion 28 of th e L an d Acqu is i tion Ac t h as be en held to be p ar t of comp ens a tion by Ap ex Cou r t in the c as e of C IT vs. Gh ansh y am HUF r epo r ted as (2 0 0 9) 3 15 IT R 1, th e s a me be ing exem p t u n d er sec tion 10 (3 7 ) of the Ac t h as n o t bee n in cl u de d in th e to tal in co me of th e as ses see wh il e f ili ng r e tu rn of in co m e. The Ld. AO ac ce p te d th e e xpl an atio n o f th e ass ess ee.
11 . T h e issu e of am e n de d pro v is ion s of s ec ti on 5 6 ( 2)(v ii i) by the Fin ance Ac t, 2 00 9 an d th e dec is ion of Ho n 'b le P & H H ig h C o u rt in Mah en de r P al N a rang' s c as e was r ai s ed by th e Ld. PC IT in no ti c e u nd er se c ti on 2 63 on the b as is of au di t o bje c ti on (c o py of au di t m em o of IT O Hi sar at p ages 3 99 -40 2 of P ap er B ook ). B ef ore th e Ld . PC IT th e as se ss ee expl ain ed th a t the amen de d p rov is io ns we r e n o t in con ne c tio n wi th th e de c is ion of Hon 'b le Su pr e me Co u rt in Gh an shy am HUF ' s c ase bu t to m ake si mp le the tax a ti on o f in ter es t in co me as e arl ie r i t was tax abl e o n ac c ru al /c ash b asis on the b as is of acco un ting pr in c ip le s as h eld by the d ec is ion o f Hon' ble Su p rem e C ou r t in R am a B ai vs . C IT ( 19 90 ) 18 1 ITR 40 0 . It was al s o expl ain ed th a t in ser ti on of se c ti on 14 5 A , 1 45 B, 56 (2 ) (v i ii) an d 5 7( iv ) by th e F in an c e (No .2) Ac t, 2 00 9 di d n o t ch an g e th e c h ar ac te r of i n te re s t u n der sec ti on 28 of th e L an d Acq u is iti 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 comp ens a tion as env is ag ed in se c tion 45 ( 5 ) of th e A c t to ' re ven u e rec ei pt' c h arg e abl e to tax as 'in c ome f ro m o the r s ou rce s'. It was also e xpl ain ed to the Ld . PC IT th at af ter a n aly sing th e pr ov is io ns of sec tion 28 an d 34 of Land Acq u is iti o n A c t the Hon 'b le Su pre me Cour t held in th e c ase of Gh an sh yam HUF th at i n te res t is di ff e ren t f rom c om p ens a ti on . Ho we ver, in te res t p ai d on the exce ss amo un t u nd e r se c ti on 28 d epe n ds up on a cl aim b y a p er son wh ose l and is acq u ired whe re as in te res t u nd er s ec tio n 3 4 is f o r del ay in m akin g p aym en t. Th is vi tal diff e ren c e n e ed s to be k ep t in min d in dec i din g th is m a tte r . In te r est un de r se c tion 28 is p ar t of th e am oun t of co mpe n s ati o n wh ere as in te re s t u n d er sec tion 3 4 i s on l y f or d el ay in m ak in g paymen t af ter the comp ens a tion amo un t is de te r min ed . In te r est u nd er se c tion 28 is a par t o f enh an ce d v al ue of th e l an d wh ic h is n o t th e c as e in the m a tter of p ay men t of in te res t un de r s ec ti o n 3 4. It i s th u s e vid e n t th a t the vie w tak e n by th e Ld . A O th at i n te res t un de r sec tion 28 of L an d Ac qu is iti on A c t rec e ive d b y the as sess ee is ex em p t u n d er sec tion 1 0 (37 ) o f th e Ac t is n o t con tr ar y to l a w.
12 . W e n o ti c e th a t i n CB DT Circul ar N o. 5 , da te d 03 .0 6.2 01 0 rep or te d in ( 20 10 ) 32 4 IT R (S t. ) 29 3, i t is s ta ted th a t th e Hon 'b l e Su p re me Cou r t in th e c as e o f Ram a B ai V s. C IT ( su pr a) h as h e l d th a t arre ar s of in te re st co mp u te d on del ay ed or enh an ced comp ens a tion sh all b e taxabl e on acc ru al b asi s. T h is h as c au s ed un du e h ard ship to the tax p ay e rs . W i th a v ie w to m i tig a te the h ardshi p se c ti on 14 5A h as been su bs ti tu te d and cl au s e (v iii ) in sub- sec ti on (2 ) of s ec tion 5 6 h as b een i nser te d b y the F in an ce (No .2 ) Ac t, 20 09 s o as to p rovi de th a t the in te res t rece iv ed o n comp ens a tion or on e nh anc ed co mpen s ati on re fe rre d to in cl au se (b ) o f s ec tion 1 4 5 A sh al l b e as s ess ed as in co me f r om o th er sour ces in the y e ar i n whi c h i t is re ce ive d. It is thu s evid en t th a t th e am en de d pro vis io ns of sec ti on 5 6 (2 )(vi ii ) of the Ac t r. w. sec tion 1 45 A we re b roug h t on th e sta tu te to n ul l if y the ef f ec t o f Hon' ble Su pre me Cou r t' s rulin g in the c as e of R am a B ai an d n o t Gh ansh yam HUF . M oreo ve r, i t is b rou gh t to our no tic e b y th e L d. AR th at th e dec i sion i n Gh an sh yam HUF was pro n ou nce d in J ul y , 20 16 an d the F in an c e B il l pro po s ing am end men t to sec tion 5 6 was l ai d in Fe bru ar y 20 16 . So th e in te n ti on of th e l eg isl atu re cou ld nev er b e the over ru lin g of th e r atio l ai d d o wn in Gh ansh y am HUF c ase. Th e i ssu e in R am a B ai c ase i nv olve d the tax ab il i ty i n th e y e ar of rec ei pt. T he f ac ts an d qu es tio ns f or de te r min ation in R ama B ai' s c as e we re dif f eren t f ro m thos e of Gh an sh y am HUF 's c ase. The p osi ti on in Gh an sh y am HUF' a c as e h as b een af f irm e d b y the Ho n' ble Su pre me Cou r t in H ar i Sin gh 's c as e. Fu rth e r, the Ld. A R s ub m itte d b ef ore u s th at S LP f il e d by th e Re ven ue i n H ari Si ng h' s c as e h as been wi th d ra wn by th e Rev enu e m e an i ng th e reby th a t no w th e is sue h as a tta ine d c er tain ty .
13 . We h ave g one th r oug h th e dec is ion of th e Hon 'b le P & H H i g h Cour t in th e c ase of Mahen de r P al N ar an g ( su pr a) . In th at c ase th e l and of th e as s es see was ac qu ire d in A Y 20 07 - 08 an d 2 00 8 -09 . T he e nh an c ed co mpen s a ti on was rec e ive d on 21 .03 .20 16 . In his re tu rn f il e d fo r A Y 2 01 6- 1 7 he tre a te d the in te res t re ce iv ed un de r se c ti on 2 8 of th e 18 94 Ac t as inc o m e f rom o th er sou rc es an d cl aime d de du c tion f or 5 0 % as p e r se c tion 5 7 (i v) of the 1 9 6 1 Ac t. Th e re tu rn was p roc ess ed un d er s ec ti on 14 3(1 ) of th e Ac t. A n app lic a tio n un de r se c ti o n 26 4 w as m ad e cl ai min g th a t b y m is take th e as sessee tr e ate d th e in tere s t in c om e as i nco me f ro m o th er sour ces wh ere as the same i s par t of enh an ced co mp en s ati o n . T he rev i sion al au tho r i ty reje c te d th e ap plic atio n un de r se c tion 26 4 o n 30 .1 .20 19 . It was in th i s f ac tu al m atri x th a t th e as sesse e fil e d wr i t p e ti tio n b efo re th e Hon' bl e P & H Hi g h Cou r t. The qu es ti o n f or co n side ra ti o n was " wh e th er af te r the i ns er ti on of sec tion 56 (2 ) (v i ii) and 57 (iv ) of th e Ac t w. e.f . 01 .04 .20 10 , c an the asses s ee cl ai m th at in te res t rece iv ed u nde r se c ti on 2 8 of the L an d Acq uisi ti on A c t, 1 89 4 wil l p ar tak e th e ch ar ac te r of the comp ens a tion an d would f al l un der th e h ead " c ap ital g ain" an d no t " in c om e f ro m o th er s our ces " ? It was arg u ed by the as ses see th a t the re i s no am e ndm en t in sec ti on 10 (3 7) an d by in se r tion o f sec tions 56 (2)( v iii) an d 5 7( iv ), th e n a tu r e of in te res t u nd er s ec ti o n 28 of th e 18 94 Ac t wi ll re main th a t of co mpe n s ati on an d dec is io ns of th e Hon 'b le Sup re me Cou r t in th e c as e of Gh an sh y am (HU F ) an d th e dec is ion of H on' bl e Gu j ra t Hi g h Cou r t in Mov al iy a Bh ikh u bh ai B al abh ai vs. IT O T D S (2 0 1 6) 3 8 8 ITR 3 4 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 S up re m e C ou r t h as aff i rmed i ts vie w tak en in Gh an sh y am HUF' s c as e an d the dec i s ion of Gu jra t H i g h Cou rt i n Mo v al iy a' s c as e in i ts dec i sion in th e c as e of U O I vs. H ar i Sing h (20 1 8) 9 1 tax m ann .co m 20 ( SC ). T he d ec is ion of th e Hon ' bl e S u pre me Co ur t i n Hari Sing h 's c as e (su p r a) was n o t bro u gh t to the n o tice of H on' ble P & H H igh C o u rt wh ile ren de r ing d ec isio n in Mahen de r Pal N ar an g's c ase (s u p ra) . Hon' ble P &H H igh Cou r t h as thu s ren de re d the dec is ion in Mahen de r P al N ar an g 's c as e in its pe c uli ar f ac ts an d circu ms tan ce s . A c co rd ingl y , the opin ion o f th e L d. P C IT th at the Ld. AO sh ou l d h av e p asse d the ass ess m en t in ac co rd an ce wi th th e ame n de d l aw an d b ind ing dec is ion in M ah en de r P al N ar an g 's c ase (su pr a) o verloo king th e dec is ion o f Hon 'b le Su p re me C o u rt in Gh ansh yam ' s HU F's c ase is n o t sus tain abl e. Rel ianc e of th e Ld. C IT - DR o n the d ec isi on in Mah end e r P al N ar an g' s cas e is mi spl ace d. N ee dl es s to e mph as is th a t in V.M . Salg ao c ar an d B ros P vt. L td . vs . C IT 2 43 IT R 3 83 (S C ), th e Hon 'b le Sup reme C our t h as hel d th at an o rder dis m i ssing th e SLP a t th e th resh ol d wi th o u t de tail e d re as ons do e s n ot con s ti tu te an y d ecl ar ati on of l a w o r a b in ding pre ce den t. T h eref o re , o ve re mp h asisin g the f ac t o f di sm is s al of SLP in lim ine by th e Hon'b le Su pre me Cou r t i n Mahen de r P al ' s c as e b y the Rev enu e is no t of an y leg al ass is tan ce to i t.
15 . R eco rd reve als th a t th e o r de r of the Ld. P C IT was p ro mp ted sol ely by th e au di t o bje c tio n . H on 'b le P & H H ig h Cou r t h as h e l d in C IT vs . Soh an a W ooll en M ills (20 08 ) 2 96 ITR 23 8 ( P&H ) th a t me re au di t o b jec ti on c an n o t l ead to an inf eren ce th at th e order o f th e Ld . AO i s er ron eous or pr eju d ic ial to th e in te res t of the Re v enu e.
16 . Si nc e the or de r of th e L d. AO i s b ase d on th e d ec is ion of the Hon' ble Su pre me Cou rt in Gh an s hy am H UF (sup ra) on th e is sue of taxab ili ty of in te res t re ce ive d b y th e asses se e u n de r s ec ti o n 28 of Lan d A cq u is iti o n Ac t, i t c an a t b es t b e s ai d to be a de b ata b le issu e on wh ich two vie ws ar e p oss ibl e a nd th e L d. AO ac cepts one of th e v iews . In th is v ie w of th e m atte r too , th e Ld . PC IT c ann o t assu me rev ision al ju ris dic tion as hel d b y the Hon 'b le Del h i H ig h Cou r t in C IT vs . H ind u s tan Co c a Col a B eve rag e s P L td. (2 01 1) 3 31 IT R 19 2 (De l. )
17 . A cc ord ing ly , on the f ac ts an d in th e c ircu m s tanc es of the c as e as s e t ou t ab ov e, we hol d th a t th e o r de r of th e L d. PC IT is no t sus tain abl e. Ac co r din gl y, we al l ow th e ap pe al of the as sessee an d qu ash th e im pug n ed o r de r of th e Ld . PC IT .
18 . In th e resu l t, ap p eal of th e as sessee is all 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.