Shri Jagpal Vs. The PCIT

Parties Involved

Facts Summary

The assessee, Shri Jagpal, received interest of Rs 82,88,672/- under Section 28 of the Land Acquisition Act, 1984 during the year on enhanced compensation for the acquisition of land. The assessee claimed this interest as exempt in its return filed in response to a notice under Section 148. The Assessing Officer (AO) accepted the claim in the reassessment proceedings. However, the Principal Commissioner of Income Tax (PCIT) found that the AO did not conduct a proper enquiry and invoked revisional powers under Section 263(1) to hold that the AO's assessment order was erroneous and prejudicial to the revenue's interest. The issue for adjudication was whether the interest received under Section 28 of the Land Acquisition Act on enhanced compensation for acquisition of land is exempt under Section 10(37) or taxable under 'income from other sources' in view of the amendment w.e.f 01.04.2010 in the provisions of Section 56(2)(viii) and 57(iv) of the Income Tax Act.…

Legal Issues

• 1. Whether the interest received on enhanced compensation under Section 28 of the Land Acquisition Act is exempt under Section 10(37) of the Income Tax Act.

Judgment Outcome

Decided in favour of Revenue.

Precedents Relied Upon

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