The Tribunal held that interest on compensation is treated as income from other sources in section 56(2)(viii) of the Act pursuant to an amendment with effect from April 1, 2010 by the Finance (No. 2) Act, 2009. Irrespective of the system of accountancy being followed by the assessee, interest on enhanced compensation shall be taxable in the year of receipt. For considering the hardship of the assessee 50 per cent. deduction was allowed under section 57(iv) of the Act. (AY. 2012-13)
Gunwant Kaur v. CIT (2022) 96 ITR 21 (SN) (Amritsar) (Trib)
S. 56 : Income from other sources-Interest on enhanced compensation for compulsory acquisition of land-Method of accounting-Taxable in year of receipt irrespective of system of accounts followed-Considering hardship 50 Per Cent. deduction allowed [S. 56(2)(viii), 57(iv), 145A]