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| The Tax Publishers2020 TaxPub(DT) 2132 (Bang-Trib) INCOME TAX ACT, 1961
Section 56(2)(viii)
Interest under section 28 of Land Acquisition (LA) Act of 1894, partook the character of compensation, and it did not fall within the ambit of expression 'interest' as contemplated in section 145A or interest under section 34 of LA Act which was only for delay in making payment after the compensation amount was determined. Interest under section 28 was thus part of enhanced value of the land and assessee was not liable to pay any tax under the head 'income from other sources' on interest paid to it under section 28 of said Act.
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Income from other sources - Applicability of section 56(2)(viii) - Interest received under section 28 of Land Acquisition Act, 1894 -
Assessee-received interest under section 28 of the Land Acquisition Act, 1894 on account of enhanced compensation on compulsory acquisition of assessee's land and enhanced compensation on compulsory acquisition of assessee's land and claimed the same as exempt under section 10(37). AO taxed the same under section 56(2)(viii).Held: Interest under section 28 of Land Acquisition Act of 1894, partook the character of compensation, and it did not fall within the ambit of expression 'interest' as contemplated in section 145A or interest under section 34 of Land Acquisition Act which was only for delay in making payment after the compensation amount was determined. Interest under section 28 was thus part of enhanced value of the land and assessee was not liable to pay any tax under the head 'income from other sources' on interest paid to it under section 28 of Land Acquisition Act, 1894.
Followed:ITO, Ward-1 v. Basavaraj M. Kudarikannur 95 Taxman.com 106 in ITA Nos. 1747 & 1750/Bang/2017, dt. 1-6-2008 : 2018 TaxPub(DT) 4445 (Bang-Trib).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2012-13
IN THE ITAT, BANGALORE BENCH
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