The decree holder in E.P.No.493 of 1999 in L.A.R.No.19 of 1994 on the file of the II Additional Subordinate Judge’s Court, Thrissur is the revision petitioner. The property owned by the petitioner was acquired for a public purpose. The petitioner claimed additional compensation. The matter was referred to the Land Acquisition Court. The Land Acquisition Court enhanced the compensation awarded by the Land Acquisition Officer. The petitioner filed E.P.No.493 of 1999 for realization of the amount decreed. The requisitioning authority directly deposited an amount of Rs.3,10,015/- on 16-08-2004, without deducting the income tax due from the total amount of compensation. Petitioner filed a cheque application and a cheque for Rs.2,87,617/- was issued after deducting the amount of Rs.22,398/- towards income tax. The Land Acquisition Officer filed an application to issues a cheque for Rs.22,398/- for depositing the same as income tax. The petitioner objected to the application of the Land Acquisition Officer contending that the property acquired was agricultural land and that he is not liable to pay income tax from the amount of compensation awarded. The executing court overruled the objection raised by the petitioner. It was held that a statutory duty is cast upon the Land Acquisition Officer to deduct income tax at source. The executing court relied on a decision reported in State of Kerala v. Mariyumma (2005 (1) K.L.T. 587) and ordered a cheque for Rs.22,398/- to the Land Acquisition Officer to be deposited as income tax and also directed the Land Acquisition Officer to issue a Tax Deduction Certificate. Challenging that order, this Civil Revision Petition is filed.

2. Since the question arising for consideration in this C.R.P is deduction of income tax at source, notice was issued to Senior Standing Counsel for the Income-tax Department. The C.R.P. is disposed of after hearing Sri. Thiyyannoor Ramakrishnan, counsel for the petitioner, Sri Mohan, C. Menon Senior Government Pleader and Mr. George K. George, Standing Counsel for the Income Tax Department.

3. Learned counsel appearing of the petitioner has argued that in Mariyumma’s Case (supra) this Court has held that if the land acquired is agricultural land, the owner has no liability to pay income tax and hence the court below went wrong in deducting the income tax. It is argued that the nature of the land involved in this case will show that the land acquired in this case was agricultural land.

4. Section 194A of the Income Tax Act deals with the liability to pay income tax on interest awarded provided the amount of interest exceeds Rs.5,000/-. So for any interest payable on enhanced compensation, solatium and other interest, a statutory liability is cast upon the Land Acquisition Officer to deduct income tax at source provided the amount of interest is more than Rs.5,000/-. Learned counsel appearing for the petitioner has argued that the interest accrued in this case is not for a single year but for a number of years and if the interest is appropriated for each year, the interest accrued for year will not exceed Rs.5,000/- and he would not be liable to pay any income tax. The authority competent to consider the benefit claimed by the petitioner is the Income Tax Officer.

5. Section 194L A casts a statutory liability on the Land Acquisition Officer to deduct income tax at source if the amount of compensation is paid after 1-10-2004 and the same exceeds one hundred thousand rupees. It is contended that the liability to deduct income tax under Section 194LA arises only if the land acquired is not agricultural land. It is true that Section 194LA excludes agricultural land. Explanation to section 194LA provides that “agricultural land” means agricultural land in India as referred to in items (a) and (b) of sub clause (iii) of Clause (14) of Section 2. Section 2(14) deals with capital asset. Section 2 (14)(iii) (a) and (b) read as follows: -

(iii) Agricultural land in India, no