Rakesh Kumar And Others vs Haryana State Industrial & ... on 17 August, 2011

[Cites 7, Cited by 4]

Punjab-Haryana High Court

Rakesh Kumar And Others vs Haryana State Industrial & ... on 17 August, 2011

Author: Ajay Kumar Mittal

Bench: Adarsh Kumar Goel, Ajay Kumar Mittal

CWP No. 14935 of 2011                                           -1-

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH


                                            CWP No. 14935 of 2011

                                            Date of Decision: 17.8.2011


Rakesh Kumar and others

                                                         ....Petitioners.
            Versus

Haryana State Industrial & Infrastructure Development Corporation Ltd.
and others
                                                      ...Respondents.


CORAM:-     HON'BLE MR. JUSTICE ADARSH KUMAR GOEL,
            ACTING CHIEF JUSTICE.

            HON'BLE MR. JUSTICE AJAY KUMAR MITTAL.


PRESENT: Mr. Sudhir Mittal, Advocate for the petitioners.


AJAY KUMAR MITTAL, J.

1. This order shall dispose of CWP Nos. 14935, 14956, 14996 to 15001 and 15017 of 2011 as according to the learned counsel for the petitioners identical facts are involved and similar relief has been claimed therein. For brevity, the facts are being taken from CWP No. 14935 of 2011.

2. In this petition, the petitioners have prayed for issuance of a writ in the nature of certiorari for quashing the certificates dated 28.1.2011 of deduction of tax at source and also for a direction to the respondents to refund the amount of tax deducted at source.

3. Put shortly, the facts necessary for adjudication as narrated in the petition are that the petitioners were owners of agricultural land situated in village Kassar, hadbast No. 43, Tehsil Bahadurgarh, District CWP No. 14935 of 2011 -2- Jhajjar, out of which, a substantial chunk of land was acquired by the State of Haryana for public purpose of development of an industrial area. Notification under Section 4 of the Land Acquisition Act, 1894 (in short "the 1894 Act") was published on 24.1.2001 followed by notification Section 6 of the Act. The Land Acquisition Collector vide award dated 8.10.2003 awarded a sum of Rs.2,00,000/- per acre for Nehri/Chahi and Barani/Banjar Kadim and Rs.2,50,000/- per acre for gair mumkin land. The claimants filed references under Section 18 of the 1894 Act. The reference Court vide award dated 24.3.2009 granted compensation at the rate of Rs.6,75,000/- per acre for Nehri/Chahi land and Rs.4,00,000/- per acre for gair mumkin, barani, banjar kadim land. The enhanced compensation was paid to the petitioners. While depositing the amount of enhanced compensation with the reference Court, respondent No.1 deducted tax at source under Section 194-A of the Income Tax Act, 1961 (in short "the Act") on the amount of interest. Hence, the present writ petition.

4. We have heard learned counsel for the petitioners.

5. The issue that arises in this petition is whether respondent No.1 was justified in deducting tax at source from interest paid to the petitioners under Section 194A of the Act.

6. The similar issue came up before this Court wherein, this Court vide order dated 30.5.2011 in CWP No. 9739 of 2011 (Sarti v. Haryana State Industrial & Infrastructure Development Corporation Ltd. and others) had observed as under:- "8. This Court, in Income Tax Appeal No. 209

of 2004, decided on 27.10.2010 (Commissioner CWP No. 14935 of 2011 -3- of Income Tax, Faridabad v. Bir Singh (HUF), Ballabgarh) had held that interest paid to the assessee under Section 28 of the Land Acquisition Act, 1894 (for brevity, "1894 Act") on enhanced amount of compensation in respect of the acquired land falls for taxation under Section 56 of the Act as "income from other sources" and is exigible to tax in the year of receipt under cash system of accountancy. It had also been observed that where the assessee is not maintaining books of account by adopting any specific method, it shall be treated to be cash system of accountancy. In the present case, the interest received by the petitioner was on account of delay in making the payment of enhanced compensation and, therefore, would fall under Section 28 of the 1894 Act. Such payment could not par-take the character of compensation for acquisition of agricultural land and, thus, was not exempt under the Act. Once that was so, the tax at source had been rightly deducted by the payer.

7. Learned counsel for the petitioners was unable to dispute that in view of receipt of interest element on enhanced compensation, the same being taxable in the year of receipt, the petitioners were CWP No. 14935 of 2011 -4- required to file return as tax was payable on the said amount. In such a situation, the petitioners have an alternative remedy by way of filing the income tax return and getting the tax deducted at source adjusted against their tax liability. If any amount deducted at source is found to be in excess of the tax liability, the petitioners are entitled to refund in accordance with the provisions of the Act.

8. In view of the above, the writ petitions stand disposed of with liberty to the petitioners to file the income tax returns and seek refund of excess tax deducted at source in accordance with law.




                                              (AJAY KUMAR MITTAL)
                                                     JUDGE



August 17, 2011                               (ADARSH KUMAR GOEL)
gbs                                           ACTING CHIEF JUSTICE
 CWP No. 14935 of 2011                                          -5-

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No. 14956 of 2011 Date of Decision: 17.8.2011 Raj Kumar and others ....Petitioners.

Versus Haryana State Industrial & Infrastructure Development Corporation Ltd. and others ...Respondents.