IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: ‘F’: NEW DELHI BEFORE SHRI SUDHIR PAREEK, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No. 2561/Del/2023 (Assessment Year: 2015-16)

Vijay Singh Chauhan, Income Tax Officer, House No.-193, Gali No.-3, Vs. Ward- 2(5), Noida, Village Chhalera, Sector-44, Uttar Pradesh, Noida, Uttar Pradesh India.

India.

PAN No: AEIPC4637E APPELLANT RESPONDENT Assessee by : Sh. Naveen Kumar, Adv.

Revenue by : Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing: 01.07.2025 Date of Pronouncement: 26.09.2025

ORDER

PER SUDHIR PAREEK, JM:

The aforetitled appeal has been preferred against the order of National Faceless Appeal Centre, Delhi [hereinafter, in short, ‘CIT(A)’] dated 17.07.2023 for AY 2015-16, by which appeal of the assessee was dismissed.

2. Brief facts of the case may be narrated as that the appellant filed return of income declaring total income of Rs. 3,74,740/- for the Assessment Year 2015-16 on 04.08.2016, claiming refund of Rs.1,33,93,740/-. Thereafter, case was selected through CASS for limited scrutiny, on the reasons as mentioned below.

(i)Whether interest income has been correctly shown in the Return of Income.

(ii) Whether refund claim is justified.

(iii) Whether sales turnover/receipts has been correctly offered for tax.

(iv) Whether the claim of agricultural income is correct.

2.1. In the abovesaid proceeding notices u/s 143(2) and 142(1) of the Act, was issued and duly served upon the appellant on different dates, and it was noticed that the appellant had received a sum of Rs. 13,43,02,195/- as interest on enhanced compensation from New Okhla Industrial Development Authority. The interest income which was received by the appellant, has not been declared in his return of income for the AY 2015-16. The Learned AO, made addition of Rs 6,71,51,098/- in the income of the appellant as in the head ‘income from other sources”.

3. In appeal, the Learned CIT(A) upheld the impugned addition and on being aggrieved with the same, the assessee before us by way of present appeal.

4. The appellant has raised the following grounds of appeal:

“GROUND OF APPEAL - 1:

The Ld. CIT(A) erred in upholding the decision of the Ld. AO to include an additional amount of Rs.6,71,51,098/- in the appellant's taxable income under the head "Income from Other Sources."

GROUND OF APPEAL - II:

The Ld. CIT(A) failed to appreciate the factual and legal contentions raised by the appellant with respect to the taxation of interest received as compensation/enhanced compensation under Section 28 of the Land Acquisition Act 1894. In addition as per the legal precedent of CIT vs. Ghanshyam Das (HUF) to support the contention that interest paid under Section 28 should not be taxable.

GROUND OF APPEAL-III:

The Ld. CIT(A) failed to understand that interest components under Section 28 and Section 34 of the Land Acquisition Act 1894 are different. Interest under Section 28 is rightfully viewed as an integral part of the compensation amount and should not be subjected to regular income tax treatment.

GROUND OF APPEAL-IV:

The CIT(A), failed to consider the decisions of various courts, including the Supreme Court and this Hon'ble ITAT wherein under similar circumstances the Interest received u/s 28 was treated as an integral part of section 28. Since, it was an agricultural land on which the compensation has been awarded by the court; and secondly, the interest received on enhanced compensation u/s 28 of the Land Acquisition Act is part of compensation and hence is not taxable, and the assessee is entitled for exemption u/s 10(37) of the Act. The appellant prays for a fair consideration of his contentions and a just decision in line with the principles of law and equity.

In support of the contention of the assessee reliance is placed on the following judgments passed by the Hon'ble Delhi ITAT, wherein the facts in question were similar and the Hon'ble ITAT Delhi passed the judgment in favour of the Assessee.

 ITO, Ward 2. vs. Hari S