9911796707
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Issues:
1. Disallowance of donation for charitable purposes. 2. Taxability of capital gains from agricultural lands within municipal limits. 3. Taxability of interest on enhanced compensation. Issue 1: Disallowance of donation for charitable purposes The appeal was against the disallowance of a donation of Rs. 10,498 claimed for charitable purposes as the donations were not made to approved institutions. The deceased's estate executor claimed that the donations were in line with the deceased's will for charitable purposes. However, the AAC held that no trust was established, no trust deed existed, and the donations were not made to approved charities, thus disallowing the deduction. The appellant contended that the donations should be allowed as per the deceased's will and alternatively under section 80G. The Tribunal found no evidence to support the deduction under section 80G and upheld the AAC's decision to reject the claim. Issue 2: Taxability of capital gains from agricultural lands within municipal limits The third and fourth grounds of appeal challenged the AAC's decision to tax capital gains from agricultural lands within municipal limits and direct the ITO to take action under section 155(7A) of the Act. The appellant argued that no additions were made by the ITO or the AAC regarding capital gains from the acquisition of agricultural lands. The Tribunal deemed the AAC's observations and directions unnecessary since no additions were made, ordering the expunction of those remarks. The Tribunal clarified that the ITO could invoke section 155(7A) if necessary, within the time limit. Issue 3: Taxability of interest on enhanced compensation The fifth and sixth grounds contested the AAC's decision to tax the entire interest received on enhanced compensation in the assessment year. The AAC had enhanced the assessed income by Rs. 3,49,075, considering the interest taxable for the year under appeal. The appellant argued that the interest had not crystallized during the relevant accounting period and should be spread over the relevant years. The Tribunal agreed with the appellant, stating that the interest crystallized when the High Court passed the order, falling in the accounting period for the next assessment year. The Tribunal held that only the interest pertaining to the year under appeal should be taxed, in line with a similar precedent. The appeal was partly allowed, withdrawing one ground during the hearing. This judgment addressed issues related to the disallowance of charitable donations, taxability of capital gains from agricultural lands, and taxability of interest on enhanced compensation, providing detailed analysis and clarifications on each matter based on the arguments presented and legal provisions applicable.
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