MANJET SINGH Vs. UNION OF INDIA AND ORS.

JUDGEMENT

(1.) This order shall dispose of CWP Nos. 15506, 26907, 26921 and 26924 of 2013 as according to the learned counsel for the parties, the issues involved herein are identical. However, the facts have been extracted from CWP No. 15506 of 2013.

(2.) Briefly, the facts necessary for adjudication of the controversy involved, as narrated in CWP No.15506 of 2013 are that Notifications under sections 4 and 6 of the Land Acquisition Act, 1894 (in short, "the 1894 Act") were issued on 2.1.2002 and 24.12.2002 respectively for acquisition of land in Village Budha Khera, Hadbust No.1, Tehsil and District Karnal. After considering all the relevant factors, the Land Acquisition Collector assessed the compensation vide award No.22 for Rs. 4 lacs per acre for all kinds of plain land except low lying area having depression upto 2-1/2 feet for which compensation @ Rs. 3 lacs per acre was assessed. The reference was made under Section 18 of the 1894 Act which was accepted vide order dated 11.8.2009, Annexure P.1. Compensation was awarded at the rate of Rs. 439/- per square yard alongwith other statutory benefits. It was further held that the petitioners shall also get compulsory acquisition charges @ 30%, additional amount @ 12% per annum and interest in accordance with sections 23(1-A), 23(2) and 28 of the 1894 Act. Thereafter, Form 'D', Annexure P.2 had been drawn on 11.5.2010 and 27.5.2010 by the Land acquisition Officer containing the complete details regarding the names of the petitioners, principal, interest, cost, total amount, TDS and net payable in accordance with the decision dated 11.8.2009, Annexure P.1. Proceedings for reassessment were initiated under Section 148 of the Income Tax Act,1961 (for brevity, "the Act") on 9.4.2012, Annexure P.5. Notice under Section 148 of the Act was issued to the assessee. He submitted written submissions and prayer was made for supply of reasons for initiation of reassessment proceedings. According to the petitioner, the notice was issued primarily relying upon decision of this Court in CIT v. Bir Singh (HUF), ITA No.209 of 2004 decided on 27.10.2010. In the reply submitted to the Assessing Officer, the benefit of exemption under Section 10(37) of the Act was claimed. It was also pointed out that interest under section 28 of the 1894 Act does not fall for taxation under Section 56 of the Act as income from other sources in view of judgment of the Apex Court and in case still it was treated as income from other sources then the assessee was entitled to mandatory deduction as enumerated under Section 57(iv) of the Act on protective basis. The main grievance is regarding the treatment given qua the amount of interest received under section 28 of the 1894 Act while arriving at the chargeable income under the Act. In accordance with the decision of the Apex Court in CIT v. Ghanshyam (HUF), 2009 315 ITR 1, it was claimed that the amount of interest component contained under section 28 of the 1894 Act should form part of enhanced compensation and secondly the concluded matters should not be reopened. The earlier petition filed by the petitioner was dismissed as withdrawn vide order 3.7.2013, Annexure P.10 with liberty to file the fresh one with better particulars.

(3.) The claim of the assessee was controverted by the revenue by filing written statement. In the reply, the initiation of proceedings under Section 148 of the Act was sought to be justified by relying upon judgment of this Court in Bir Singh (HUF)'s case . It has also been stated that legislature has introduced Section 56(2) (viii) and also Section 145A(b) of the Act by Finance (No.2) Act, 2009 with effect from 1.4.2010, according to which the interest received by the assessee on compensation or enhanced compensation shall be deemed to be his income in the year of receipt irrespective of the method of accountancy followed by the assessee. Income referred to in Section 56(2) (viii) of the Act, shall, however, be subject to deduction of 50% under Section 57(iv) of the Act. It has further been pleaded that the amendment is applicable with effect from assessment year 2010-11 and the assessee had received the interest amount during the period relevant to assessment year 2010-11 and therefore, the assessee is liable to pay tax.