VIKRAMBHAI SOMABHAI PATEL Vs. INCOME TAX OFFICER
LAWS(IT)-2014-5-74
INCOME TAX APPELLATE TRIBUNAL
Decided on May 23,2014

Vikrambhai Somabhai Patel Appellant
VERSUS
INCOME TAX OFFICER Respondents

JUDGEMENT

KUL BHARAT,JM - (1.) THIS appeal by the Assessee is directed against the order of the Ld.Commissioner of Income Tax (Appeals) -XVI, Ahmedabad ('CIT(A)' for short) dated 22/10/2010 pertaining to Assessment Year (AY) 2007 -08. The Assessee has raised the following grounds of appeal: - 1. The appellant submits that that in view of the decision of the Hon'ble Supreme Court in CIT V/s Ghanshyam HUF (315 ITR 1) the interest awarded ought to have been held to be not taxable at all being merely integral part of compensation to the compulsory acquisition of land. 2. The Ld.CIT(A) has erred in law and on facts in confirming the addition of Rs.22,93,378 on account of interest awarded on enhanced compensation on acquisition of agricultural land. 3. The Ld.CIT(A) has erred in law and on facts in confirming the addition of Rs.22,93,378 in the year of appeal by following the decision of Apex Court in CIT Vs Ghanshyam HUF (315 ITR 1) which is not applicable to the facts of the case of the appellant. The CIT(A) also erred in not following the various decisions of the Supreme Court cited by the appellant claiming the spread over of the interest awarded. It be so held now and the addition made the returned income be deleted. 4. Levy of interest u/s.234B of the Act is not justified. 5. Initiation of penalty u/s.271(1)(c) of the Act is not justified. The appellant craves to add, amend, alter, edit, delete, modify or change all or any of the grounds of appeal at the time of or before the hearing of the appeal.
(2.) BRIEFLY stated facts are that the assessee had filed return of income declaring total income of Rs.39,700/ - and subsequently, revised return was filed declaring income of Rs.59,934/ -. The case of the assessee was picked up for scrutiny assessment and the assessment u/s.143(3) of the Income Tax Act,1961 (hereinafter referred to as "the Act") was framed vide order dated 29/12/2009, thereby the Assessing Officer(AO) made addition of Rs.22,93,378/ - being the interest income received on additional compensation. Against this, the assessee filed an appeal before the ld.CIT(A). Before the ld.CIT(A), the assessee had submitted that the interest can be taxed on accrual basis and requested for spread over of interest. The ld.CIT(A) after considering the submissions, dismissed the assessee's appeal. Now, the assessee is in further appeal before us and has raised a ground that the interest awarded ought to have been held to be not taxable at all being merely integral part of compensation to the compulsory acquisition of land.
(3.) GROUND Nos.1, 2 and 3 are inter -connected, therefore these grounds are decided together for the sake of convenience. At the outset, the ld.counsel for the assessee submitted that the authorities below have misinterpreted the judgement of Hon'ble Apex Court rendered in the case of CIT vs. Ghanshyam HUF reported at (2009)315 ITR 01 (SC). The ld.counsel for the assessee submitted that as per the decision of Hon'ble Supreme Court, the interest awarded on enhanced compensation is an integral part of the compensation to the compulsory acquisition of the land. The ld.counsel for the assessee submitted that the land being agricultural land, therefore such amount is not taxable. On the contrary, the ld.Sr.DR supported the orders of the authorities below.;


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