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2017 (11) TMI 969 - SC - Income TaxTDS on enhanced compensation - TDS on the amount of compensation and interest received pursuant to judgment and award of the Land Acquisition Reference - whether the compensation is paid for property other than agricultural land or otherwise and whether deduction of tax at source was permissible under any provision of law? - as decided by HC 2016 (12) TMI 1084 - GUJARAT HIGH COURT the land of the petitioner was acquired for public purpose and he received compensation and interest under the provisions of Land Acquisition Act, the assessee was not liable to pay any tax on the aforesaid amount received by him. Held that - We find that the issue involved in this case is squarely covered by case Union of India and Ors. v. Hari Singh and Ors 2017 (11) TMI 923 - SUPREME COURT since the Land Acquisition Collector had already deducted tax at source and deposited with the Income Tax Department, in such circumstances, better course of action, which is in consonance with the provisions of Income Tax Act, is for the respondents to approach the concerned Assessing Officer(s) and to raise the issue that no tax is payable on the compensation/enhanced compensation which is received by them as their land was agricultural land. Once such an issue is raised before the Assessing Officer(s), it is for the Assessing Officer(s) to examine the facts of each case and then apply the law as contained in the Income Tax Act to determine the aforesaid question. Appeal disposed of with directions to AO, and Land Acquisition Collectors.
Issues involved:
1. Delay condonation and grant of leave 2. Ex-parte proceedings due to non-appearance of respondent 3. Application of directions from a previous order in a similar case regarding compensation for acquired land and tax refunds 4. Refund of Tax Deducted at Source (TDS) to Land Acquisition Collector 5. Compliance with High Court procedure for Land Acquisition Collectors Issue 1: Delay condonation and grant of leave The Supreme Court, in this judgment, first condoned the delay and granted leave in the matter. Despite no appearance by the respondent, the Court proceeded ex-parte. Issue 2: Ex-parte proceedings due to non-appearance of respondent Since no one appeared on behalf of the respondent, the Court proceeded with the case ex-parte after hearing the learned senior counsel for the appellant. Issue 3: Application of directions from a previous order in a similar case regarding compensation for acquired land and tax refunds The Court found that the issue in the present case was similar to a previous order in 'Union of India and Ors. v. Hari Singh and Ors.' The Court directed the respondents to file appropriate returns before the Assessing Officer(s) within two months if they believed the compensation for acquired land was agricultural. The Assessing Officer(s) were instructed to determine if the compensation was for agricultural land based on relevant legal provisions. Issue 4: Refund of Tax Deducted at Source (TDS) to Land Acquisition Collector The direction to refund the TDS to the Land Acquisition Collector was set aside, except in cases where the amount had already been refunded. The Income Tax Department was directed to proceed according to the provisions of the Income Tax Act in such cases. Issue 5: Compliance with High Court procedure for Land Acquisition Collectors The Court directed Land Acquisition Collectors to follow the procedure stipulated by the High Court of Kerala in Nalini's case for future cases. The appeal was disposed of in line with the directions given in the previous order, ensuring consistency in the application of legal principles.
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