HON’BLE SUPREME COURT · SOURCE-REVIEWED NOTE
Bikram Singh and Others v. Land Acquisition Collector and Others
Civil Appeal Nos. 12497-12500 of 1996
[1996] Supp. 6 SCR 214 ·
Income-tax Act, 1961: sections 2(28A), 4, 5 and 194A · Land Acquisition Act, 1894: sections 28, 31 and 34
Sources & disclosures includedDownload original judgment / order
Three-judge bench · K. Ramaswamy, J. · Faizan Uddin, J. · G. B. Pattanaik, J.
01 · Facts of the case
Landowners challenged notices seeking income tax on interest received because land-acquisition compensation had been paid late. The Punjab and Haryana High Court treated statutory interest as a revenue receipt and upheld the tax demand (SCR pp.214-217; PDF pp.1-4).
02 · Discussion by the Hon’ble Court
The Court followed Shamlal Narula and later authorities: interest compensates for delayed use of the compensation money and is not part of the capital compensation for the land. The expanded definition in section 2(28A) did not exclude this established revenue receipt from tax. Section 194A concerned deduction at source and did not determine the underlying charge in these appeals (SCR pp.217-220; PDF pp.4-7).
03 · Judicial decision
The Court held the delayed-payment interest taxable as a revenue receipt under section 4, allowed spreading over the period for which payment was made, and dismissed the appeals without costs.
Source: Primary judgment: decision
04 · Outcome / in whose favour
In favour of Revenue on chargeability; in favour of the landowners only to the limited extent of spreading the receipt over the relevant period.
05 · AKHB REVIEW POINT
AKHB analysis: classify each land-acquisition component separately - principal compensation, solatium and interest - and apply the law for the year of receipt or accrual. Preserve the Court's distinction between chargeability and TDS machinery, and check later specific provisions before computation.
Source & verification
Download original judgment / order · Open cited source rendition
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Statutory scope
The ruling applies the provisions considered in 1996. Later statutory rules for compensation interest and deductions require independent assessment-year verification.
Later treatment
Source checked 2026-10-12. Later treatment and current statutory applicability were not comprehensively checked.
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