Sh. Mahender Malik Vs. Income Tax Officer, Ward-1, Hisar

Parties Involved

Facts Summary

The assessee, Sh. Mahender Malik, received interest of Rs. 3,97,56,460/- on enhanced compensation from HUDA after the compulsory acquisition of his agricultural land. TDS amounting to Rs. 39,75,646/- @ 10% was also deducted. The assessee claimed the said interest as exempt. The assessing officer (AO) completed the assessment without making any addition. However, the Principal Commissioner of Income Tax (PCIT) set aside the assessment order, directing the AO to pass a fresh order, based on the argument that the interest should be taxed as 'income from other sources'. The assessee appealed against this order, arguing that the interest was part of the enhanced compensation and thus exempt under section 10(37) of the Income-tax Act, 1961.…

Legal Issues

• 1. Correctness of the lower authorities' action assessing the interest component of land acquisition compensation.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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