2023 (1) TMI 625 - AT - Income Tax

Benefit of exemption claimed u/s 10(37) - compulsory acquisition of agricultural land of the assessee under the Land Acquisition Act - population of Village - understanding the language not less than 10,000 - AO was of the opinion that the said land bearing address at Village Jasola, Delhi was situated within the jurisdiction of municipality, therefore, as per section 2(14) (iii) of the Act, exemption u/s 10(37) of the Act is not applicable in this case - HELD THAT - It is true that what is mentioned in the provisions of section 2(14) (iii) of the Act is that the population of the municipality should be more than 10,000. But what is important is the context in which clause (a) is inserted. Provisions define agricultural land in India as not being a land situated in any Municipality/Cantonment having population of 10,000 and above. Since the land of the assessee is situated in the municipality as per the certificate and population is more than 10,000, then it is not an agricultural land referred to in Section 10(37) of the Act for the simple reason that it is situated in a municipality/cantonment where it is not considered as agricultural land as per provisions of section 2(14) (iiia) of the Act. In our considered opinion, interpretation given by the ld. counsel for the assessee is erroneous and not acceptable.

Summary

Issues:
1. Exemption claimed under section 10(37) of the Income-tax Act, 1961 for compulsory acquisition of agricultural land.
2. Discrepancy in the cost of acquisition of land.

Analysis:
1. The primary issue in this case is the denial of exemption claimed under section 10(37) of the Income-tax Act, 1961 for the compulsory acquisition of agricultural land. The Assessing Officer contended that the land in question, located in a municipality with a population exceeding 10,000, did not qualify as agricultural land as per the provisions of section 2(14)(iii)(a) of the Act. The Assessee argued that the population criterion should be interpreted as "more than 10,000" rather than "not less than 10,000." However, the Tribunal held that the land being situated in a municipality with a population exceeding 10,000 does not meet the definition of agricultural land under section 10(37) of the Act, thus upholding the Assessing Officer's decision.

2. The second issue pertains to the discrepancy in the cost of acquisition of the land. The Assessee contested the cost taken by the Assessing Officer at Rs. 400 per sq. yard instead of Rs. 2,240 per sq. yard as on 01.04.1981. The Tribunal noted that the primary focus of the appeal was on the denial of exemption under section 10(37) and did not delve into the alternative argument regarding the cost of acquisition. Consequently, the Tribunal dismissed the appeal based on the grounds argued before them, without addressing the issue of the cost of acquisition in detail.

In conclusion, the Tribunal dismissed the appeal of the Assessee, upholding the decision to deny exemption under section 10(37) for the compulsory acquisition of agricultural land situated in a municipality with a population exceeding 10,000. The Tribunal did not delve into the alternative argument regarding the cost of acquisition, as the primary focus of the appeal was on the exemption issue.