GURU RAO Vs. STATE OF KARNATAKA

JUDGEMENT

(1.) THE short question for consideration in these writ petitions is whether the Land Acquisition Officer, Koppal, the second respondent herein is justified in deducting 10% of the interest awarded under Sections 28 and 34 of the Land Acquisition Act, 1894 (for short 'the Act') towards deduction of tax at source though the lands acquired were agricultural lands?

(2.) THE petitioners were the owners of agricultural lands at Arekeri Village, Yelburga Taluk, Koppal District. The said lands were acquired by the State Government for Hirehalla Irrigation Project. The second respondent made an award under Section 11 of the Act determining the compensation. Not being satisfied with the quantum of compensation, the petitioners sought reference under Section 18 of the Act. The Reference Court enhanced the compensation. The petitioners filed appeals before this Court under Section 54 of the Act seeking further enhancement of the compensation.

(3.) LEARNED Counsel for the petitioners submits that having regard to Section 194LA of the Income Tax Act, 1961, the second respondent is not justified in deducting the tax at source from the interest accrued on delayed payment of compensation. The circular at Annexure 'B' is violative of Section 194LA of the Income Tax Act.