On appeal the Court held that where an assessee receives interest on delayed payment of compensation or enhanced compensation under the Land Acquisition Act, such interest (whether awarded u\/s 28 or u\/s 34) is not in the nature of \u201cinterest\u201d as defined in S. 2(28A), but is an accretion to the principal compensation itself, arising from the constitutional obligation to pay full compensation under Art. 300A. Accordingly, such interest must be treated as part of the compensation and assessed under the head \u201cCapital gains\u201d and not as \u201cIncome from other sources\u201d u\/s 56. Consequently, the interest component will also enjoy the benefit of exemption u\/s 10(37) where the land compulsorily acquired is agricultural land. The applicability of S. 56(2)(viii) depends on whether, in the facts, the interest is distinct from compensation; where it is only compensatory for delayed payment, S. 56 is not attracted. Referred,\u00a0 Sundar v. UOI (2001)7 SCC 211.<\/p>\n","protected":false},"excerpt":{"rendered":"
S. 56 : Income from other sources-Capital gains-Agricultural land-Interest on enhanced compensation for acquisition of land-Interest on delayed payment under the Land Acquisition Act partakes the character of compensation-Eligible for exemption u\/s 10(37) where land is agricultural-Not \u201cinterest\u201d u\/s 2(28A), hence S. 56 not attracted. [S. 2(28A), 10(37), 45, 56(2)(viii), 145, Land Acquisition Act,1894, S. 28, 34, Art. 300A]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-58507","post","type-post","status-publish","format-standard","hentry","category-income-tax-act"],"acf":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p9S2Rw-fdF","jetpack-related-posts":[],"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/58507","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/comments?post=58507"}],"version-history":[{"count":1,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/58507\/revisions"}],"predecessor-version":[{"id":58508,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/posts\/58507\/revisions\/58508"}],"wp:attachment":[{"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/media?parent=58507"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/categories?post=58507"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/itatonline.org\/digest\/wp-json\/wp\/v2\/tags?post=58507"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}