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TMI Blog2015 (11) TMI 180X X X X Extracts X X X X X X X X Extracts X X X X ..... rts of which have been re-produced by us above, then these would not fall within the definition of compulsory acquisition. However, we are of the opinion, that the acquisition whether the acquisitions for which assessee had not deducted tax at source were based on agreements similar to the one produced by the assessee before us or in other words whether in all such compensation amounts were fixed in accordance with Sec. 29(2) of the KIA Act require verification by the lower authorities. We therefore, set aside the orders of the authorities below and remit the issue back to the file of the AO for verifying the agreements to reach a conclusion whether acquisitions fell under ‘compulsory acquisition’ or not. Learned AO shall proceed as per law declared by Hon’ble Apex Court and elucidation given by Hon’ble Chattisgarh High Court which we have reproduced above. Since we have remitted the question regarding nature of acquisition back to the file of the AO, the other question as to the failure of machinery provision for applying Sec.194LA is kept open at this juncture. - Decided partly in favour of assessee for statistical purposes. - ITA No.1375(B)/2013 - - - Dated:- 23-9-2015 - SMT. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt caution to Ground no.2. 3. The failure to adopt these grounds in the original was neither willful nor deliberate. It does not require any fresh investigation into facts apart from looking into the material already on record. Principles for admission of additional grounds have been laid down repeatedly by Courts and we may refer only to few of those decision in 229 ITR 383 (SC), 187 ITR 688(SC) 199 ITR 351 (Bom.FB) 193 ITR 624 (Ker.). Being unaware of the correct position in law and the same has not been brought to my knowledge by my counsels. We may add here that the very additional aground no.3 is only an alternative ground. Hence, it is prayed that the above ground may be entertained and disposed of in accordance with law . 3. Facts apropos are that the assessee a State Government undertaking was subject to a survey proceeding under the Act. During the course of survey proceedings, it was noticed that the assessee had acquired certain pieces of land from non-agricultural landowners and effected payment without deducting tax at source, as required u/s 194LA of the IT Act, 1961. A notice was issued to the assessee whereupon Shri H.D.Nagavi, Manager appeared before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was the State Government which was responsible for making the payments for the acquisition of the land. Just because an Officer of the assessee made the payments as per the learned AR, assessee could not be visited with the obligations stipulated u/s 194LA of the IT Act, 1961. Relying on Sec.2(2) of the Karnataka Industrial Areas Development Act, 1966 (KIADA) learned AR submitted that the Board meant Industrial Area Development Board established under the said Act. Relying on Sec.5 of the KIADA Act, the learned AR submitted that the Board was a body corporate with perpetual succession and common seal. As per the learned AR u/s 28(1) of KIADB Act, the State could acquire land when the State was of the opinion that land was required for the purpose of development by the assessee Board. The land vested with the State Government and not with the Board. Relying on sub-section of 8 of Sec.28, the learned AR submitted that the State Government after it had taken possession of the land acquired by it, transferred the land to the Board, only where such land was required by the Board. As per the learned AR Sec.29 of the KIADB Act, clearly specified that it was for the State Government to pay ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mounts) has been paid to me I have received the same. Further, I have noted that there is a prevention to make appeal to the Civil Court for higher compensation amount over and above the compensation amount paid to me. I am also bound by I have agreed that the land compensation amount included for all the ownership rights building situated in the said land. 4. In case, in future, if it is provided that I am not the true original owner of the acquired land, then I am bound by and omitted to refund the entire compensation amount obtained by me I will indemnify the losses and cost to the Board or to the Govt. immediately. 5. Further, in case the compensation amount is not refunded by me to the Govt. or to the true original land owners if I retained the compensation amount illegally, then, the said amount may be recovered from me legally as land revenue arrears as agreed under this said agreement. I witness thereof, I have signed this agreement including above terms conditions, before the following wit nesses. Sd/- S.S.Keeliputti Land Owners 7. Learned AR submitted that the consideration for land was fixed u/s 29(2) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he acquisitions for which payment were effected were not compulsory in nature. 11. We deem it appropriate to first to deal with the second line of argument taken by the assessee. Section 194LA of the IT Act, is reproduced hereunder; Any person responsible for paying to a resident any sum, being in the nature of compensation or the enhanced compensation or the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land) shall, at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten percent of such sum as income-tax thereon. Provided that no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to a resident during the financial year does not exceed. (two) hundred thousand rupees. Explanation .For the purpose of this section,- i) agricultural land means agricultural land in India including land situate in any area referred to in items (a) and (b) of sub-clause(i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compulsory acquisition is not defined in the IT Act or for that matter in any other statute. However, it is expropriation or is done in exercise of eminent domain the word, which was coined by 17th Century Jurist Grotius. 14. Halsbury s Laws of England, Vol.8(1), 4th Edition explains that where land on an interest in land is purchased or taken under statutory powers without the agreement of the owner . It is said to have been compulsorily acquired . 15. In Sunder Vs Union of India (2001) 7(SCC 211) the question involved before the Supreme Court was whether the State liable to pay interest on the amount envisaged under section 23(2) of the Land Acquisition Act, 1894 (LA Act) or not. While deciding this question, the Court observed, (1) In the compulsory acquisition the land owner is deprived of the right and opportunity to negotiate and bargain for the sale price. It depends on what the Collector or the Court fixes as per the provisions of the LA Act . 16. It is clear that in case of compulsory acquisition, the seller has no option. He can neither refuse to sell his land nor can he negotiate the price. The price is fixed by the statute itself. The condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the persons to whom such compensation shall be paid (4) On receipt of a reference under sub-section (3), the Deputy Commissioner shall serve notice on the owner or occupier of such land and on all persons known or believed to be interested herein to appeal before him and state their respective interests in the said land . It is clear that the question of compulsory acquisition will arise only where the compensation cannot be determined by agreement. Sub-sec.3 4 will come into play only when there is a failure to determine the compensation through negotiation between State Government and the land owners. In other words when the compensation is based on an agreement between State Government and owner of the land, no more can we say that it is a compulsory acquisition. Especially so, in view of the elucidation of law by the Hon ble Chattisgarh High Court in the case of Naya Raipur Development Authority. Once the acquisition is not considered as compulsory, Sec.194LA of the IT Act will not be applicable. Thus, in our opinion, if the compensation paid by the assesee for acquisition of land were all through agreements similar to the one entered by the assessee with Smt.Sumit ..... X X X X Extracts X X X X X X X X Extracts X X X X
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