1. In all the above appeals by the assessees, a common point relating to deduction under section 80-L out of interest on compensation allowed by acquisition authorities is involved.
2. The common facts are that the land of the assessee was acquired by Meerut Development Authority under the Acquisition Act and on account of delay in payment of compensation, interest was paid. In the returns, all the assessees claimed deduction under section 80L out of the above interest. The assessment was made under section 143 (1)(a) of Income-tax Act. While making prima facie adjustment the Assessing Officer did not allow deduction under section 80L. The assessees then moved applications under section 154 of Income-tax Act claiming deduction of interest under section 80L. It was claimed by the assessees that similar interest was allowed in the case of Shri Om Prakash S/o Kedar Nath by the learned CIT (A) vide his order dated 18-8-1993.
3. The Assessing Officer referred the matter to the Dy. Commissioner (D. C.) of Income-tax under section 144A and rejected the claim in the light of direction issued by the D. C. It was held that section 80L was not applicable as interest was not allowed on any deposit envisaged under section 80L of the Income-tax Act.
4. The assessees went in appeal before CIT (A). The learned CIT (A) discussed the issue in the case of Shri Om Prakash for the assessment year 1991-92. He took into account earlier order passed by the CIT (A) dated 24-8-1992 as also Circular of Board relied upon on behalf of the assessees. He was of the view that learned DCIT in directions under section 144A had discussed the matter thoroughly and his conclusion that interest was not allowed on deposit for purposes of section 80L, was uncontroversial. The controversy was limited to the point whether disallowance under section 80L could be made while making prima facie adjustment under section 143 (1)(a) of Income-tax Act. The learned CIT (A) held that assessee never made any deposit with State Housing Authority to earn interest which was paid to the assessee as a measure of compensation. The learned CIT (A) held that deduction under section 80L being inadmissible could be disallowed while making adjustments under section 143 (1)(a) of the Income-tax Act. Having regard to the fact that no "deposit" was made by the assessee, the CIT (A) held that assessees were not entitled to deduction under section 80L. The rejection of rectification application was accordingly upheld.5. The assessees have brought the issue in appeal before the Appellate Tribunal. Shri V. K. Goel, learned counsel appearing for all the assessees relied upon decision of Hon'ble Bombay High Court in the case of Bank of America NT & SA v. Dy. CIT [1993] 66 Taxman 426 (Bom.), as also on order of Income Tax Officer dated 1-1-1992. In the case of Shri Qasim wherein similar deduction under section 80L was allowed by the ITO following directions of CIT (A) dated 20-4-1992 and 21-12-1992.
Copies of orders of CIT (A) were placed before us. Shri Goel argued that when two reasonable views of the matter were possible, ITO was not legally correct in disallowing deduction under section 80L in prima facie adjustments under section 143 (1)(a) of the Income-tax Act. It was a controversial matter. His order was without jurisdiction and liable to be rectified. The learned D. R. opposed above submissions.
6. On careful consideration of rival submissions, we are inclined to agree with the view taken by learned CIT (A) in the impugned order.
Clause (viia) of section 80L which provides for exemption for certain categories of interest income is as follows :- "Interest on deposits with any authority constituted in India by or under any law enacted either for the purpose of dealing with an satisfying the need for housing accommodation or for the purpose of planning development or improvement of cities, towns and villages, or for both," What is exempted under the above clause is interest on deposits with authorities concerned with housing accommodation, planning development, improvement of cities, etc. The word, "deposit" normally implies to 'put or set down'; to place, to lay down things'. Keeping in view the text and context of section 80L, the word "deposit" has to be taken to mean as "deposit of money to gain interest". It must be a voluntary payment. The purpose of section 80L is to encourage investment in schemes enlisted under the said section and therefore as an incentive "interest" on deposits in above schemes is granted exemption from income tax. However, interest which is allowed under section 34 of the Land Acquisition Act is a compensatory measure intended to compensate for the loss caused due to deprived use of money not paid in time. Such interest cannot be claimed exempt under section 80L of the Income-tax Act.
It is settled law that while dealing with tax matters one has to go by words expressly used and not be impugned by equitable considerations.
We are, therefore, of opinion that the assessee could not claim exemption under section 80L of interest allowed by Meerut Development Authority on delayed payment of compensation. Such deduction being inadmissible under the law could be added back under section 143 (1)(a) as a prima facie adjustment. There was no mistake which could be rectified under section 154 of the Income-tax Act.
7. Reliance of assessee on Circular No. 204 dated 24th July, 1976 of Board and on certain decisions of CIT (A) is of no avail as in those decisions it was not held that interest on compensation is interest on deposit. Even Circular No. 204 clearly states that purpose of clause (viia) of section 80L is to provide an incentive to making a deposit with such State Housing Board etc. so as to provide more funds to them for house building activities. The learned counsel for the assessee is not right in asking us to follow view of CIT (A) in some cases which to our mind is erroneous. We, therefore, find no force in any of the arguments raised by Shri Goel. All the appeals are devoid of merit and are hereby rejected.