Lakhi Ram Vs Income Tax Officer

Parties Involved

Facts Summary

Lakhi Ram, the assessee, received interest of Rs. 3,97,56,460/- on enhanced compensation from HUDA after the compulsory acquisition of his agricultural land. The assessee claimed this interest as exempt under section 10(37) of the Income Tax Act. The Assessing Officer (AO) accepted this claim and passed the assessment order without making any addition. However, the Principal Commissioner of Income Tax (PCIT) revised the assessment order, directing the AO to pass a fresh order, based on the audit objection and the decision of the Punjab & Haryana High Court in Mahender Pal Narang vs. CBDT. The assessee appealed against this revision, arguing that the interest received under section 28 of the Land Acquisition Act is part of the enhanced compensation and hence exempt under section 10(37).…

Legal Issues

• 1. Correctness of the AO's action assessing the interest component of land acquisition compensation under section 28 of the Land Acquisition Act, 1894.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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