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| The Tax Publishers2020 TaxPub(DT) 0835 (Del-Trib) INCOME TAX ACT, 1961
Section 56
Interest received on compulsory acquisition of land under section 28 of Land Acquisition Act (LAA) would be in the nature of compensation and not interest, which is taxable under the head Income from other sources. In the instant case it was not clear as to whether interest received was in respect of land acquired under section 28 of the LAA or interest under section 34 thereof. Accordingly, matter was remanded to AO.
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Income from other sources - Taxability - Interest received on enhanced compensation on compulsory acquisition of land -
Question arose for consideration was whether interest received on enhanced compensation was exempted under section 10(37) as part of the compensation on compulsory acquisition of land or was taxable under section 56(2)(viii). Held: Interest received on compulsory acquisition of land under section 28 of Land Acquisition Act (LAA) would be in the nature of compensation and not interest, which is taxable under the head Income from other sources. Accordingly, matter was remanded back to AO to decide the taxability in accordance with law after verifying as to whether interest received was in respect of land acquired under section 28 of the LAA or interest under section 34 thereof.
REFERRED :
FAVOUR : Matter remanded.
A.Y. :
INCOME TAX ACT, 1961
Section 250
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