आयकर अपीलीय अिधकरण िद(cid:671)ी पीठ “एस एम सी”, िद(cid:671)ी

(cid:373)ी िवकास अव(cid:830)थी, (cid:586)ाियक सद(cid:735)

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.2756/िद(cid:671)ी/2024 (िन.व. 2018-19)

ITA No.2756/DEL/2024 (A.Y.2018-19)

Raj Singh, Fazilpur, Jharsa, Gurugram, Haryana 122101 PAN: CYLPS-8635-J ...... अपीलाथ(cid:7278)/Appellant बनाम Vs.

Income Tax Officer, Ward-3(1)

Gurugram, Haryana 122001 ..... (cid:7079)ितवादी/Respondent अपीलाथ(cid:334) (cid:554)ारा/ Appellant by : None (cid:366)ितवादी(cid:554)ारा Respondent by : Shri Rajesh Tiwari, Sr. DR /

सुनवाई क(cid:7409) ितिथ/ Date of hearing : 11/12/2024 घोषणा क(cid:7409) ितिथ/ Date of pronouncement : : 07/03/2025 आदशे /ORDER PER VIKAS AWASTHY, JM:

This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 31.03.2024, for assessment year 2018-19.

2. The primary issue raised by the assessee in appeal is against the addition made by Assessing Officer (AO) in respect of interest received by the assessee on enhanced compensation of land u/s. 28 of Land Acquisition Act, 1894.

3. The assessee has received enhanced compensation of Rs.67,32,824/- including interest of Rs.42,92,939/- u/s. 28 of Land Acquisition Act, 1894. The assessee has claimed aforesaid interest as exempt from tax in light of decisions rendered by Hon’ble Supreme Court of India in the case of CIT vs. Ghanshyam HUF, 2009 (8) SCC 412/315 ITR 1 and the decision rendered in the case of Union of India vs. Hari Singh, 91 taxmann.com 20. Per contra, the AO in light of the provisions of section 56(2) (viii) of the Act r.w.s. 57(iv) as amended by the Finance (No.2) Act 2009 w.e.f. 01.04.2010, held that the interest received by the assessee on enhanced compensation is taxable.

4. Shri Rajesh Tiwari, representing the department vehemently defended the impugned order and prayed for dismissing appeal of the assessee. The ld. DR submitted that the Hon’ble High Court in the case Mahender Pal Narang vs CBDT, 120 taxmann.com 400 (P&H) and in the case of PCIT vs. Inderjit Singh Sodhi HUF, 161 taxmann.com 301 (Delhi) has held that interest whether on compensation or enhanced compensation is liable to be taxed as income from other sources u/s.

56(2)(viii) of the Act.

5. Submissions made by ld. DR heard, orders of the authorities below examined. The provisions of section 56(2) of the Act were amended by the Finance (No.2) Act 2009 w.e.f 01.04.2010 by way of insertion of clause (viii) to sub-section (2) to section 56. The same reads as under:

"(viii) Income by way of interest received on compensation or on enhanced compensation referred to in clause (b) of section 145A"

4. Prior to insertion of aforesaid Clause the Hon'ble Apex Court in the case of CIT vs Ghanshyam HUF (supra) has held that interest received on compensation/enhanced compensation is part of solatium paid for compulsory acquisition of land, hence, exigible to tax u/s. 45(5) of the Act. The Hon'ble Punjab and Haryana High Court in the case of Mahender Pal Narang vs CBDT (supra) after considering amended provisions of section 56(2) (viii) of the Act distinguished the decision rendered in the case of Ghanshyam HUF (supra) and held that interest received on compensation or enhanced compensation is to be treated as ‘Income from Other Sources’ and not under the head ‘Capital Gains’. Recently, the Hon'ble Delhi High Court in the case of PCIT vs. Inderjit Singh Sodhi (supra) held that interest whether on compensation or enhanced compensation received on acquisition of land u/s. 28 or u/s. 34 of the Land Acquisition Act, 1894 shall be exigible to income tax as ‘Income from Other Sources u/s. 56(2)(viii) of the Act.

5. In light of recent decisions rendered in the case of Mahender Pal Narang (supra) and Inderjit Singh Sodhi (supra), I find no infirmity in the order of CIT(A), hence, the same is upheld.