IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, CHANDIGARH PHYSICAL HEARING HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM आयकर अपील सं. / ITA No.1287/CHANDI/2025 (िनधा(cid:330)रण वष(cid:330) / Assessment Year: 2015-16)

Shri Gurmeet Singh ITO Ward 5 Village Manakpur Devilal, Pinjore बनाम/ Vs. Panchkula Panchkula, Haryana - 134109 Haryana - 134112 (cid:830)थायीलेखासं./जीआइआरसं./PAN/GIR No. CTNPS-5895-M (अपीलाथ५/Appellant) : (ঋ(cid:529)थ५ / Respondent)

अपीलाथ५कीओरसे/ Appellant by : None ঋ(cid:529)थ५कीओरसे/Respondent by : Sh. Vivek Vardhan (Addl. CIT) – Ld. Sr. DR सुनवाईकीतारीख/Date of Hearing : 08-01-2026 घोषणाकीतारीख /Date of Pronouncement 14-01-2026 :

आदेश / O R D E R

1. Aforesaid appeal by assessee for Assessment Year (AY) 2015- 16 arises out of an order of learned Addl. / Joint Commissioner of Income Tax (Appeals)-1, Mumbai [CIT(A)] dated 18-03-2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143(3) r.w.s. 147 of the Act on 14-11-2019. At the time of hearing, none appeared for assessee. However, Ld. Sr. DR pointed out that the impugned issue stood covered against the assessee by the recent decision of this Tribunal in bunch of appeals titled as Shri Ajay Kumar & Ors. (ITA Nos.463/Chd/2023 & ors. dated 11-11-2025). A copy of the order has been placed on record. In the above background, the appeal is disposed-off as under. The registry has noted delay of 129 days in the appeal which stand condoned. The sole issue that arises in the appeal is taxability of interest on enhanced compensation for Rs.11,16,597/-.

2. The assessee received interest on enhanced compensation u/s 28 of Land Acquisition Act of 1894 for Rs.22,33,294/- which was claimed to be exempt. The Ld. AO opined that 50% of the same would be taxable. The Ld. AO, following various binding judicial precedents and considering the amendment made by Finance Act 2009 by way of insertion of clause (viii) under sub-section 2 of Sec.56, brought the same to tax. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before Tribunal.

3. As rightly pointed out by Ld. Sr. DR, this issue has elaborately been adjudicated upon by coordinate bench of this Tribunal in the cited case as under: -

59. The following propositions emerge from a conjoint reading of the relevant statutory provisions of the income tax after its amendment w.e.f 1/4/2010 reproduced hereinabove :

(i) By inserting Section 56(2)(viii) and Section 145B(1) with effect from 1st April 2010, the Legislature introduced a specific charging mechanism mandating that interest received on compensation or enhanced compensation shall be taxable under the head “Income from Other Sources”, and that such income shall be brought to tax on receipt basis.

(ii) This amendment marks a substantive legislative departure from the earlier scheme of Section 45(5), wherein the entire compensation, including enhanced compensation, was treated as part of capital gains. The post-2010 regime thus establishes a distinct head of income and a clear basis of charge for interest on such compensation.

(iii) It is pertinent to note that the opening words of Section 56(2)—“In particular, and without prejudice to the generality of the provisions of sub section (1), the following incomes shall be chargeable to income-tax under the head ‘Income from Other Sources’”—constitute a deeming provision, bringing within its sweep certain categories of income which might not otherwise fall under this head. The inclusion of clause (viii) therein deems interest on compensation or enhanced compensation to be taxable as Income from Other Sources, notwithstanding its earlier characterization under capital gains.

(iv) A conjoint reading of Section 2(24), Section 2(28A), Section 4, Section 10(37), Section 14, Section 45(5), Section 56(2)(viii), Section 145B(1) and Section 194LA of the Act makes it abundantly clear that any income which arises or is deemed to arise or accrue in India is chargeable to tax in the hands of a resident ass