Income Tax Appellate Tribunal - Delhi
Income Tax Officer, Panipat vs Dinesh Kaushik, Panipat on 5 June, 2025
IN THE INCOME TAX APPELLATE TRIBUNAL,
DELHI BENCH: 'B' NEW DELHI
BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER
AND
SHRI MANISH AGARWAL, ACCOUNTANT MEMBER
ITA No.5753/Del/2024
Assessment Year: 2018-19
Income Tax Officer, Vs. Sh. Dinesh Kaushik,
Panipat VPO Baljattan, Panipat,
Haryana
PAN: AWJPK9483E
(Appellant) (Respondent)
Assessee by None
Department by Sh. Rajesh Kumar Dhanesta, Sr. DR
Date of hearing 05.06.2025
Date of pronouncement 05.06.2025
ORDER
PER SATBEER SINGH GODARA, JM
This Revenue's appeal for assessment year 2018-19, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the "CIT(A)/NFAC"], Delhi's DIN and order no. ITBA/NFAC/S/250/2024-25/1068487789(1), dated 10.09.2024 involving proceedings under section 143(3) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act').
2. This Revenue's appeal raises the following substantive grounds:
ITA No.5753/Del/20241. The CIT(A) has erred in law and on the facts and circumstances of the case in deleting the addition made by the AO within the meaning of provisions of sec. 145B read with section 45(5) and amended provisions of sections 56(2)(viii), 57(iv) of the Act.
2. The appellant craves to add, amend or modify the grounds of appeal subsequently, before the appeal is disposed of.
3. Learned departmental representative vehemently argues that the CIT(A) herein has erred in law and on facts in reversing the assessment findings assessing the assessee's section 28 interest on enhanced compensation, as taxable under section 56(2)(viii) read with section 57(iv) read with section 145B of the Act despite the fact that the issue is covered in the department's favour in Mahender Pal Narang Vs. CBDT (2020) 423 ITR 13 (P&H) as well as PCIT Vs. Inderjit Singh Sodhi HUF (2024) 161 taxmann.com 301 (Del.)
4. We have given our thoughtful consideration to the Revenue's foregoing vehement contentions and find no merit therein in light of tribunal's recent decision in Pawan Kumar Vs. PCIT (2024) 159 taxmann.com 61 (Del.-Trib.) distinguishing the said case law as under:
"3. Br ief ly s tated, the ass es s ee is an indiv idu al. H e f ile d his re turn for AY 2018 -1 9 on 2 9.08.201 8 de cl ar ing in come o f Rs . 6,35,4 70/-. His re turn was pr oce sse d unde r s ec tio n 143 (1)( a) on 28 .0 6.2019 . His c as e was s ele cted f or co mplete s cru tiny as sessme nt unde r the e- as se ssmen t Scheme , 20 19 o n two is s ues, namely ref und cl ai m and winn ing f r om Lo tte ry /cro ss wo rd puzzle/ho rs e races . T he Ld. As se ssing
2|Page ITA No.5753/Del/2024 Of f icer ("AO ") se rved n otice unde r s ectio n 1 43(2) up on the as se s se e on 22. 09 .2019 fo llowe d by is su e of no tice und e r s ec tio n 142( 1) o f th e Ac t o n 23 .1 1. 2020 . The Ld. AO comp lete d the as se ss me nt on 22.01 .2 021 und er s ec tio n 143 (3) r. w. s e ctio n 143(3A) an d 1 43(3 B) of the A c t on inco me re turned wi th the o bserv a tio n th at o n afo re s aid two is su es no add i tio n is m ad e .
4. In exercis e of his po wer s ve sted in him un der se c tion 2 6 3 o f the A c t, the Ld. PC IT held the imp u gned or der of the Ld. AO as er ro neo us and pre judic i al to the interes t of Re ve nue. Accor d ing to Ld. P CIT, the Ld . AO sh ould h av e take n in to consid era tion, the bind ing decis ion of Hon'ble J urisd ic tio n al Hig h Cour t i. e. Ho n'ble Pu nj ab & H ary an a H ig h Cour t d a ted 19.02 .2020 in the c as e o f M ahender P al Nar ang v s. CBDT (202 0) 423 ITR 13 (P&H ) wh er e in th e H on'ble H igh Cour t h as de al t wi th th e co n tro ver sy aris ing f ro m th e judgme n t of Ho n'ble S upreme Co ur t in the c as e of CIT vs . Gh ansh yam HUF d a te d 1 6 th J u ly, 2009 r el ating to the tax abil i ty of in te re s t re ce ive d on compens ation or e nh anc ed comp en sation and also the ame nd men ts /pro v is ion s of s ec tio n 56(2)(v iii) in tro duced thr ough Fin ance Ac t, 2 0 0 9 e ff e ctiv e fr om 01.0 4. 2010 o n the abo ve is sue, whic h the Ld. AO f aile d to d o. The Ld. PC IT po in ted o ut th at th e SLP fil ed ag ains t the or de r of the decis io n ( supr a) o f the Ho n'ble P &H Hig h Court h as bee n dism is se d by the Ho n'ble Suprem e Cour t vide its o rde r d ated 4 th M arch , 2 021 in M ah end er P al N ar ang vs. CBDT (2 021) 2 79 T axm an 7 4 (SC). H e, the ref ore, s et as ide the impugn ed ass e ss men t o rde r with a d irec tion to pass an or der af re sh af ter m aking r eq uis ite enqu ir ies and pr op er ve rif ic ation with reg ard to taxabil i ty o f in te re s t o n e nh anced co mpen s atio n.
5. Agg rieved, the ass e ss ee is in ap peal befo re the Tr ibu n al and all the gr ou nds r el ate there to .
6. The Ld. AR s u b mitted th at the ass essm en t or der was neither e rron eo us nor pr ejudic ial to th e in ter es t of Revenue be c ause (i) the Ld. AO h as p assed th e order af ter m ak ing pr op er enq uir ies dur ing ass es s men t pr ocee dings ; (ii) the Ld. PC IT h as exe rcis ed th e jur is dic tion und er s ec tio n 2 63 me re ly base d on aud it obj ec tio n, wh ich is no t pe rm issible and ( iii) the Ld. AO h as v al idl y he ld th at in tere s t unde r s ec tion 28 of Land Acq uis ition Ac t, 1 894 g r an te d by the cour t is an in te gral par t of e nh anced com pens ati on and exemp t un de r s ec tio n 10(37) of th e Ac t in c ase of the ass e ss ee .
6.1 Elabor ating th e abo ve con te n tio n s, the Ld. AR poin ted o ut that in no tice under se ctio n 142( 1) of the Ac t d a te d 23.11 .2020 (co py at P aper Boo k page 1-2), the L d. AO requ ire d the ass e ss ee to fur nis h doc umen tar y evide n ce in
3|Page ITA No.5753/Del/2024 s uppor t of cl aim th at the amoun t of Rs. 6,86 ,17,767/ - is received under sectio n 28 of the Land Acqu is ition A c t. The as se s se e responde d v ide le tte r (cop y at page s 3 -5 8 of Pa pe r Boo k) th at the as s es se e receiv ed en hance d co mpens atio n o n comp uls or y acqu is ition o f his agr icul tu r al l and by H ar ya n a Go v t. of Rs. 6,86,17,767/ - wh ich in clud ed in te re s t un de r s ec tio n 28 of Lan d Acqu isition Ac t of Rs. 3, 97,56,46 0/- wh ich was p ar t o f enhanced compe ns atio n as hel d by the Ho n'ble Supr eme Co ur t in CIT v s. Ghansh yam HUF (20 0 9) 315 IT R 1 (S C). It was cl aimed th at the as se ssee was e ntitled to e xempti o n und er sec tion 1 0(37) of the Ac t. The e xplan ation o f the ass essee was ac cepte d by the Ld. AO who pass ed the impug ne d asses sm en t or der dated 22.01.2 0 21 wi tho u t making an y add ition. Th e ass es sme n t was comp lete d af ter c ar rying o ut pro per e nq uir ie s wh ic h he ou ght to h ave c ar r ied ou t in respec t o f the e n hanced com pen s ati o n received by the asses se e. It is no t a c a se o f 'l ack o f e nquiry'. Mere ly becaus e in his o rd er the Ld. AO did no t m ake e l abo r ate d iscuss io n bu t w as s atis f ied wi th the ex pl an ati o n o f the assessee , th e order co uld not be held to be er ro neous . In sup port the d ec is ion s of Ho n'ble De lhi H igh Cour t in C IT v s. S unbe am Au to Ltd. (2 0 11) 3 32 ITR 1 67 (De l) and de cis io n o f Ho n'b le Raj as th an H igh Cour t in CIT v s. Ganp at R am Bisn o i 296 IT R 292 (R aj.) wer e c ited.
6.2 T he Ld. A R inv ite d our atte n tio n to Aud i t Memo at p ag es 399 -4 02 of Paper B o ok in the c ase of the as ses se e where in IT O (Au d i t) His ar r aised an audit o bj e ctio n obs er vin g th at in te re s t u n der sectio n 2 8 of Lan d A cquis itio n Act o f Rs . 3,97,5 6,460/ - was ch ar ge able to tax under s ection 56(2 )(viii) of th e Act and als o r ef e rred to th e dec is ions in the c as es o f Shri Manje et S ing h HUF v. UO I & Others in C WP No. 155 06 of 2013; Shri Pu nee t S in gh vs. CIT (20 1 9) 1 1 0 tax man.com 11 6 and S hri M ah end r a P al N ar an g v s. CBDT in CWP No . 17 971 of 2019. The Ld. AR con te nde d th at th e ord er o f the Ld . PC IT is merely base d o n the aud i t o bjec ti o n wi tho u t ap plyin g his inde penden t mind and wi th ou t consid ering the s u bseque n t d e c isions of Ho n'b le Supreme Cour t in th e c as es o f (i) C IT vs. Go vin dbhai Mamaiy a (20 14) 52 taxm ann. co m 2 7 0 (SC) ; (ii) UO I vs. H ar i S ing h (201 8 ) 9 1 tax mann.com 2 0 ( SC); and ( iii) ITO, TDS v . Mu k tan an gir i M ahe shgir i in C iv il Appe al No. 1 8475 o f 20 I7 d a ted 10.11 .2017, whe re in the r atio o f de cision o f CIT vs. Gh ans hy am (HUF) (200 9) 181 Taxm an 3 68 (SC) h as bee n af f irmed . The Ld. AR ci ted de c isions w herein assump tio n of jurisd ic tio n un der s ec tio n 263 on the bas is of audit o bjecti o n by the Aud it wing of the De par tme nt has been held to be inv al id.
6.3 The Ld. AR expl ained th at the en hanced compensa ti on awar ded by the ap pell ate au tho rity/ c our t to an ass essee o n
4|Page ITA No.5753/Del/2024 acq u isi tio n of c ap i tal as se t is ch arge able to tax as c ap i tal g ain in th e ye ar o f re ceip t as pe r s ec tion 4 5(5) o f the Ac t. Ho wev er, in th e case o f an indiv idual or HUF s uch capital g ain from compulsory acq u is i tio n of agr icul tur al l an d be ing c ap ital ass e t is ex emp t f ro m tax under sectio n 10(37) o f the Act.
6.4 The Ld. AR po in te d o u t the d istinctio n betwe en inte re st awar ded un der sec tion 34 and in ter es t paid o n excess comp en sation und er s ec tio n 28 of Land Acqu is i tio n Ac t. Wh er e as in te re st u nder s ectio n 34 is p ayable for del ay in m akin g p aymen t af ter taking posses sio n of the acq u ir ed l and , in tere s t un de r s ec tio n 28 is awarde d f or accre tio n in the valu e o f l an d and is the re fore par t of e nh anc ed comp en sation.
6.5 In Gh ans hy am ' s c ase (s upr a), the Hon'ble Supre me Co ur t held that in teres t un der se c tion 2 8, unlike in ter es t und e r s ec tio n 34 is an accr e tio n to the v alue and he n ce it is a part o f enhanced co m pe ns a tio n or consider ation wh ich is no t the c as e u nder se c tion 3 4 of the 1 894 Ac t.
6.6 As to the alleg ed non -co ns ider ati on of the d ecis ion of Ho n'ble P & H H ig h Cour t in M ahen d er Pal Nar ang 's c ase (s upr a) by th e L d. AO, it is su bm i tted that the Hon 'ble Sup re me Cou rt d ismis sed the S LP of the as se sse e filed ag ains t the s aid decisio n o f Ho n'ble P & H H igh Co ur t in lim ine and it is a se ttled l aw th at th e dismis s al of SLP in lim ine do es no t am ou n t to af f irm ation of the v ie w take n b y the H igh Court. Un les s the judgmen t of the H igh Cour t is af f irmed , at leas t, wi th sho r t r e aso n ing, the s ame wo uld n ot am oun t to bind in g pr ecede n t.
6.7 The Ld. AR elabor ated th a t th e in se rtio n o f sec tion 145 A, s ec tio n 145B, se c tio n 56 (2)(viii) and se c tio n 57 (iv) by the Fin ance (No. 2) Act, 200 9 w.e. f . 01. 04.2010 do es no t change the ch ar ac te r of interes t under se ction 28 of the L and Acqu is ition Ac t gr an ted by the co ur t f ro m 'c apital re ce ipt' f or ming p ar t of en h anced co mpens ati o n as env is ag e d in s ec tio n 45(5 ) of the Act to 'r ev e nue receip t' char ge able to tax as in co me f ro m oth er s ources . The vie w taken by the Ld. AO th at in tere s t under sec tio n 28 o f Land Acqu is itio n Ac t received by the as ses se e is ex em pt un der se c tion 10 (37) of the Ac t is n o t con tr ar y to l aw. His asse ss men t or de r is, the refo re, no t e rr one ous and no t l iable to be re v ise d unde r s ec tio n 263 o f the Act.
7. The Ld. CIT-DR suppo r te d the o rde r of the Ld. PC IT. He pl ace d o n recor d a copy of the de c is ion of H on 'ble Punjab & H ar y an a H igh Cour t in M ahe nde r Pal N ar an g v. CBDT repo r te d in (2020 ) 423 ITR 13 (P&H ) wh er e in the Hon'bl e
5|Page ITA No.5753/Del/2024 Hig h Cou rt held th at in ter es t receive d on compens atio n o r e nh anced co mpe ns a tio n u nder Land Acquis ition Ac t, 1 894 is to be tre ate d as ' income f r om othe r so urces ' and no t unde r the he ad 'c ap i tal g ains '. Th e Ld. CIT- DR dre w o ur atten tion to p ar a 9 and 10 of the dec is io n (su pr a).
8. We h ave g ive n o ur c ar ef ul tho ug h t to the r iv al s ubmis s io ns and perus e d the r eco rds . T he f acts ar e no t in dis pu te . The as se s se e re ceive d inte re st of Rs . 3,97,5 6,460/- on enh ance d comp en sation f ro m HUDA af ter the co m puls or y acqu is ition of his ag r icul tur al l and o n whic h TD S am ou n tin g to Rs. 39,75 ,646/- @ 10% was also de duc ted. The asse ss ee cl aime d the s aid in ter es t as ex em pt. On perus al of c ase records, the Ld . PCIT g athe red th at the Ld. AO h ad comp lete d the as sess men t wi th ou t c ar ryin g o u t ne ces s ar y and pro per enq uiry wh ich sh oul d h ave been m ade re g ard ing ap pl ic ab le judgments o n th e tax ab il ity of in ter es t o n e nh anced co mpe nsatio n. Th e H on'ble Punj ab & H arya n a Hig h Cou rt h as g ive n the f inding th at in te re s t re ce ive d o n comp en sation or enh ance d compe ns ation will be tax ed as pe r amend ed p ro vis ions in tro du ce d th rough Finance (No . 2) Act, 2 009 w.e .f . 01.04.2 010 and the ju dgmen t of the Hon 'ble Sup re me Co ur t in th e c ase of CIT vs . Ghansh y am HUF wo ul d no t co me to the r es cue o f the asse ssee. The Ld. PC IT the refo re re quired th e ass es see to s ho w caus e as to why an ap propria te order unde r sec tion 26 3 o f the Ac t be no t pass ed . In res po ns e the as s es se e submitte d th at the amo unt received under s ec tion 28 of L and Acquisitio n Ac t is e xempt f rom tax re lying on th e de c ision o f De lhi Ben ch o f the Tr ibunal in th e c ase o f Shr i P unee t S ingh, Kar n al vs. ACIT pr ono un ce d on 08 .12.2022 f or AY 2011 -12 where in pl ac ing reliance upon the d ecis ion o f Hon'ble Sup re me Court in the c as e o f Ghan shy am HUF (supra) de c ided in f avo ur of the as se s se e. The submiss ion of the ass es s ee was n ot ac cep table to the Ld. PC IT in v ie w o f th e decision of Hon'ble P&H High Co ur t in Mahe nder Pal N ar ang v s, . CB DT and dism iss al of SLP f ile d agai ns t i t by the Ho n'ble Supre me Cour t. H e, ther efo re, s e t aside th e as se s sme nt or der a nd direc ted the Ld. AO to pass an or der a fresh.
9. As to the is su e of l ack o f neces s ar y and pro per en qu ir y dur ing as se ss men t procee ding , the Ld. AR de mo ns tra te d th at in res po nse to n otice under s ec ti o n 142( 1) of the Ac t issue d by the Ld. AO the as se ss e e subm itte d th at in te re s t o f Rs . 3, 97,56, 46 0/- rece iv ed by the as se sse e forme d par t o f en h ance d com pe ns ation as h eld b y the Ho n'ble Su preme Cour t in Gh ans hy am HUF's c ase (s u pra) wh ich the asse ss ee cl aime d as e xe mp t u nder sec ti on 1 0(3 7) of the Ac t. P ag es 1 to 61 o f the P ape r Book refe r. In ou r op inio n, in the l ight of e vidence avail able on re cords, it c ann o t be alle ged as do ne by the Ld. PC IT th at i t is a c as e of ' no enquiry' or 'l ac k of
6|Page ITA No.5753/Del/2024 e nqu iry'. No doubt th at th e Ld. A O did not d is cuss e l abo r ate ly in th e ass essm en t o rder bu t th at alone c an n ot m ake the order e rr oneous as held by the Ho n'ble De lh i H igh Cour t in Sun b eam Au to L td.'s c as e (s upr a) and Hon'ble R aj as th an Hig h Cour t in G anpat Ram Bisno i's c as e (s upr a). An inco rre c t as s um p tion o f f ac ts or an in corr ec t appl ic ati o n o f l aw will s atisf y the requ ire men t of the or der be ing e rrone ou s as he ld by the Ho n'ble Supr eme Cour t in M al ab ar In dus tr i al Co . L td. vs. CIT 24 3 IT R 8 3 (SC). No ne of the se e leme n ts ex is t in th e c ase a t h and.
10. Pe rus al o f the order of the Ld. PCIT sho ws that he as su me d the re vis ion ar y po wer unde r s ectio n 263 of the Ac t m ainl y on th e groun d that th e Ld. AO pas se d the or der n ot in ac co rd ance wi th the b ind in g dec is ion o f Ho n'b le P & H Hig h Co ur t in M ah ender P al Narang's c ase (supr a) agai n st wh ich SLP s tand s dis m iss ed by the Hon'ble Supr eme Co ur t. Th is is no t so . Dur ing as se ss me n t pro ceedings in re spon se to n o tice u nde r s e ction 14 3(2) and 14 2(1 ) of the Ac t, wi th ref erence to s peci fic quer y on r e ce ipt of inte res t unde r s ec tio n 28 o f Land Acq u is ition Ac t, the ass ess ee e xpl aine d v ide le tte r at p ages 3-5 o f Pape r Bo ok th at in te res t re ce iv ed unde r s ec tio n 28 of th e L an d Acq uis iti on Ac t has been held to be par t of compens ation by A pex Cour t in the case o f CIT v s. G h ans hy am HUF re po r ted as (2 0 09 ) 31 5 ITR 1, the s a me be ing exem pt u nder s ec tio n 10(37) o f the Ac t h as n o t be e n in cluded in the to tal in come o f the ass es se e wh ile fil ing re turn of in co me. T he Ld. AO ac ce p ted the e xpl an ation o f the as se s se e.
11. T he iss ue of am ended pro visio ns of sec tio n 56(2 )(v iii) by the F inance Ac t, 2 0 09 and the dec is ion of H on'ble P & H H igh Cour t in Mahender Pal N ar an g's c as e w as r aised by the Ld. PC IT in no tice un der se ctio n 26 3 on the b as is o f audit o bjection (co py of audi t me mo of ITO His ar at p ag es 39 9 -4 02 o f Paper Bo ok ). Befo re th e Ld. PCIT th e as s es se e e xpl ain ed th at the amend ed provisio ns wer e no t in co nne c tion wi th the decis io n o f Ho n'bl e Supr eme Cour t in G hans hy am HUF's c as e bu t to m ak e s imple th e tax atio n of in teres t i ncome as e arl ier it was tax able o n ac cru al/c ash basis on the bas is of ac coun ting pr incipl es as he ld by the decis ion of Hon'ble Sup re me Co ur t in Ram a Bai v s. CIT ( 1990 ) 181 ITR 400 . It was also ex pl aine d that ins er tion o f sec tio n 145 A, 145B, 56(2 )(viii) and 57( iv ) by th e Fin ance (No .2) Ac t, 2 009 d id n ot change the char ac ter of in ter es t under sec tion 28 of the L and Acqu is ition A c t from 'c ap ital re ce ip t' f o rm ing p ar t of e nh anced compen satio n as env is ag ed in sec tion 4 5(5) of the Act to 'reven ue r ec e ipt' ch arg eable to tax as 'in come from o th er source s '. It was also ex pl aine d to the Ld. PCIT th at af ter an al ys ing the pro visio ns of se c tion 2 8 and 34 of L and Acqu is ition Ac t the H on'ble Su pre me C our t held in the c ase
7|Page ITA No.5753/Del/2024 o f Ghansh yam HUF th at in ter es t is dif f eren t from comp en sation. Ho wev er, intere s t p aid o n the e xce ss amo u nt unde r s ec tion 2 8 depe nds upon a cl ai m by a pers on who se l and is acq u ire d w he re as in te re st un der se c tion 3 4 is f o r del ay in making p aymen t. Th is vital d if fe re nce needs to be ke pt in min d i n deciding th is ma tte r. In te res t under s ecti o n 28 is p ar t o f the amou n t of compens atio n whe re as inte re st unde r s ec tio n 34 is o nly fo r de l ay in m aking paymen t af ter the co mpe nsa tio n amoun t is de te rm ined. In tere st unde r s ec tio n 2 8 i s a p ar t of enh an ce d value of the l and wh ich is no t the c as e in th e m atter o f pay me nt of in teres t und e r s ec tio n 34. It is th u s evid en t that th e v ie w take n by the Ld. AO th at in te re s t unde r se c tio n 28 of L and A cquis i tion Ac t received by the as ses se e is ex em pt un der se c tion 10 (37) of the Ac t is n o t con tr ar y to l aw.
12. We notice that in CBDT C ircul ar No. 5 , dated 03.06.2 0 10 repo r te d in (2010) 324 ITR (St.) 293 , it is s tated th at th e Ho n'ble Supre me Cour t in the case o f R am a Bai V s. C IT (s upr a) h as hel d th at ar re ars o f in te re s t compu te d o n del aye d or enh an ced co mpe ns ation s hall be tax ab le o n ac cru al bas is. Th is h as c ause d un due h ar dsh ip to the tax paye rs . W i th a vie w to mi tiga te th e h ar dsh ip s ec tio n 145 A h as been s ub s ti tu te d and cl ause (vi ii) in su b- s ec tio n (2) o f sec tio n 56 h as bee n ins er ted by the Finance (No. 2) Ac t, 200 9 so as to p ro vide that the in ter es t r ece ived o n comp en sation o r o n en h ance d com pe ns ation re ferr ed to in cl ause (b) o f se ctio n 145A s hall be as sess ed as in come from o th er s our ces in th e ye ar in which it is re ceived. It is th us e viden t th at the am ended pr ov isions of sectio n 56(2)(v iii) of the Act r. w. s e ctio n 145 A were bro u gh t on the s ta tu te to nullif y the e ff ec t o f Hon'ble Suprem e Cou rt's ru lin g in the c as e o f R am a Bai and no t G h ans hy a m HUF. Mor eo ve r, it is br oug h t to our no tice by the L d. AR that the dec is ion in Gh ans hy am HUF was pronou nce d in Ju ly, 20 16 and the Fin ance B ill pr op os ing amendme n t to s ec tio n 56 w as l aid in Febru ary 20 16. So the in ten tio n o f the le gis l ature coul d never be the o v er ru ling o f the r atio l aid down in Gh ans hyam HUF c as e. The issue in R am a B ai c as e invo lved the tax ab il ity in the year o f r ece ipt. The fac ts and que s tio ns f o r de te rm in a tio n in R am a Bai's c ase wer e dif f er ent f rom tho se o f Ghans hy am HUF's c as e. Th e positio n in Gh anshyam HUF' a c as e h as be en aff ir med by the Hon'ble Su preme Co u rt in H ari S ing h's c as e . Fur th er , the Ld. AR s u bmitte d be fo re us that S LP f ile d b y the Rev e nue in Har i Sing h's c as e h as be en withdr awn b y the Rev en ue me an ing the reb y that no w the is sue h as attai ne d ce r tain ty .
13. We have go ne through the decis io n of the H on 'ble P & H Hig h Cour t in the c as e o f M ahender P al N ar ang (s upr a). In th at c ase th e l and o f the assess ee was acq u ire d in AY 2 00 7-
8|Page ITA No.5753/Del/2024 08 and 20 08- 09. T he enh ance d co m pe nsa tio n was rece iv ed o n 21.0 3. 2016 . In his re turn f ile d f or A Y 20 16 - 17 he tr ea ted the in teres t r ece iv ed u nder se c tio n 2 8 o f the 1 89 4 A ct as in co me f ro m other s our ces an d cl aimed dedu c tio n f or 50 % as pe r s ec tion 57 ( iv) o f th e 1 9 61 Ac t. The r e turn was pr oce ssed unde r sec tion 143(1) of the A ct. An appl ic ation under s ectio n 264 was m ade cl aim ing th at b y m is take the ass es see tre ated the in te res t inco me as incom e fro m o ther s ourc es where as the s am e is par t of enhance d comp en sation. The rev isio nal au th or ity re jecte d the appl ic ation unde r s ec ti o n 264 o n 30.1.2 019. It was in this f ac tu al m a tr ix th at the as se s se e f iled wr it pe tition bef ore the Ho n'ble P & H H ig h Cour t. The q ues tio n for conside r ation w as " whe ther af te r the ins er tion o f s e ctio n 56(2 )(v iii) an d 57(iv) o f th e Ac t w. e .f . 01.04 .2010, c an th e asse ss ee cl aim that in te res t re ce iv ed unde r section 2 8 of the L and A cq u isitio n Ac t, 189 4 will par take th e ch aracte r of the compensatio n and would f al l unde r the he ad "c api tal gain " and n o t " inco me f rom o the r s ources " ? It was arg ued by the asse ss ee th at there is no am endmen t in se c tio n 10 (37) an d by inser tion of se c tion s 56(2 )(viii) and 57( iv ), the n atu re of in te re s t u nder sec tion 28 o f the 18 94 A ct will r em ain th at of compens atio n a nd decis io ns of the Hon'ble Supreme Cour t in the case of Gh ans hy am (HUF ) and the dec isio n o f Ho n'ble Gujr at H igh Cour t in Mo val iy a Bhikhu bh ai B al abh ai vs. ITO TD S (20 16) 388 IT R 343 wer e r elie d upon.
14. It m ay be men ti o ned th at th e H on'ble Supre me Cour t has af f irmed its vie w tak en in G h an sh y am HUF's c as e and the decis io n of G ujr at H igh Co ur t in M o val iya's c ase in its decis io n in the c ase of UOI vs . H ar i S ing h (2 018) 91 tax mann.com 20 (S C). The d ecis ion o f the Ho n'ble Supre me Cour t in H ar i S ingh's case (su pra) was no t br ou gh t to the no tice o f Ho n'ble P & H High Cour t wh ile rendering de cis io n in M ahen der P al Nar ang 's case (supr a). H on'ble P& H Hig h Cour t h as thus re nder ed the dec is io n in M ahender P al N ar ang's c ase in its pecul iar f ac ts and cir cums tan ces . Accor d ingly, the opinio n o f the Ld. PCIT th at th e Ld. AO s hould have p asse d the ass essment in ac co rdance wi th the am ended l aw an d bind ing decis io n in M ahe nde r P al N ar ang's case (s upr a) ov erlo oking the d ecis ion of Hon'ble Sup re me Co ur t i n G hans hyam 's HUF's case is n ot s us tain able . Rel ian ce o f the Ld. C IT-D R on the decis ion in M ahe nde r P al N aran g's c as e is m is pl ace d. Ne edle ss to e mph as is th at in V .M. Salgaoc ar and Br os Pv t. Ltd. vs . CIT 243 ITR 383 (SC), the Ho n'ble Supr eme Co urt h as held th at an or der d ism iss ing the SLP at the thres hold wi th o u t de tailed re as o ns does not co ns ti tu te any de cl ara tion of law o r a b inding prece d en t. The re fore, overemph as izin g the f act o f dis miss al of SLP in l im ine b y the H o n'b le Su preme Co urt
9|Page ITA No.5753/Del/2024 in Mahe nder Pal's c as e by the Reve n ue is no t o f an y leg al as s is tan ce to it.
15. Re cor d re ve al s th at the o rde r of the Ld. PC IT was pr om pted so lely b y th e aud i t objec tio n. H on'ble P & H High Cour t has held in CIT vs. So han a Wo o llen Mills (2 0 08) 2 96 IT R 238 (P &H) that me re audit o bje cti o n c anno t le ad to an inf e rence th at the order o f the Ld. AO is er ro neous o r pr eju dic ial to the in teres t of the Rev en ue.
16. Sin ce the or de r o f the Ld. AO is b as ed o n the dec is io n of the H on 'ble Sup re me Cou r t in Gh ans hy am HUF (supr a) o n the is sue of tax ab il ity o f in teres t re ce ived by the asse ss ee unde r sec tio n 28 o f Land Acqu isi tion Ac t, it c an at bes t be s aid to be a deb ata ble is s ue on wh ich two vie ws are po ssible and the Ld. AO ac c epts o ne of the v ie ws. In this v ie w o f the m atte r too, th e Ld. PC IT c anno t as sume rev isio nal jurisd ic tio n as held by the Hon'ble Del hi H igh Co urt in C IT v s. H indus tan Coc a Col a Beve rage s P Ltd. (2 01 1) 331 ITR 192 ( De l.)
17. Accord in gly, on th e f ac ts and in th e cir cums tan ces o f the c as e as se t ou t abov e , we hold th at the order of th e Ld. PCIT is no t s us tainable . Acco rdin gly, we all o w the appe al of the as se s se e and qu ash the im pugned or der of the Ld. PC IT.
18. In the re sul t, appe al of th e as sessee is allo we d. "
5. We adopt the above extracted detailed reasoning mutatis mutandis to accept the assessee's instant sole argument in very terms. Ordered accordingly.
No other ground or argument has pressed before us.
6. This Revenue's appeal is dismissed.
Order pronounced in the open court on 5th June, 2025 Sd/- Sd/-
(MANISH AGARWAL) (SATBEER SINGH GODARA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 5th June, 2025.
RK/-
Copy forwarded to:
1. Appellant
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ITA No.5753/Del/2024
2. Respondent
3. CIT
4. CIT(A)
5. DR
Asst. Registrar, ITAT, New Delhi
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