Vimla Devi Thakran Vs. Income Tax Officer

Parties Involved

Facts Summary

The case involves Vimla Devi Thakran, who received interest of Rs. 3,97,56,460/- on enhanced compensation from HUDA after the compulsory acquisition of her agricultural land. TDS amounting to Rs. 39,75,646/- @ 10% was also deducted. The assessee claimed the said interest as exempt. The Income Tax Officer completed the assessment without carrying out necessary and proper enquiry regarding applicable judgments on the taxability of interest on enhanced compensation. The Principal Commissioner of Income Tax (PCIT) set aside the assessment order and directed the Assessing Officer (AO) to pass an order afresh. The assessee argued that the interest received under section 28 of the Land Acquisition Act is exempt from tax relying on the decision of the Delhi Bench of the Tribunal in the case of Shri Puneet Singh, Karnal vs. ACIT.…

Legal Issues

• 1. Correctness of the learned lower authorities action assessing the assessee’s interest component of land acquisition compensation u/s 28 of the Land Acquisition Act, 1894, while invoking section 57(iv) r.w.s. 56(1)(a) r.w.s. 145A(b) of the Income-tax Act, 1961.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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