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TMI Blog2018 (8) TMI 1946X X X X Extracts X X X X X X X X Extracts X X X X ..... pital gain is not taxable and is therefore, deleted. In view of this, ground of appeal of the assessee are allowed. - I.T.A No.1939/Ahd/2015 - - - Dated:- 30-8-2018 - Shri C.M.Garg, Judicial Member And Shri O.P.Meena, Accountant Member Assessee by: Shri Rameshchandra B Nagrsheth, the assessee himself Revenue by: Shri R.P. Rastogi, SR-DR ORDER O. P. Meena, 1. This appeal by the Assessee is directed against the order of learned Commissioner of Income tax (Appeals)-3, Surat (in short the CIT (A) ) dated 18.05.2015 pertaining to Assessment Year 2008-09, which in turn has arisen from the order passed by the Income Tax Officer, Ward- 8(3) Surat now re-designated as ITO Ward 3(2)(3), Surat (in short the AO ) dated 18.03.2014 under section 143 (3) r.w.s. 147 of Income Tax Act,1961 (in short the Act ). 2. The assessee has taken as many as 19 grounds of appeal, which are argumentative in nature. However, some in substance these grounds relates to confirmation of addition of ₹ 73,15,714 made on account of long-term capital gain arising in respect of land acquired under compulsory acquisition by Surat Municipal Corporation (SMC). In view of these fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... receding from the date of transfer and the land was acquired under compulsory acquisition. The extract of 7/12 showed that there was agricultural operation in undivided Survey No. 171 before division of block 270A and 270B of Kharif crops in financial year 2004-05 and 2005-06. However, there are no evidence of agricultural activity after that. Moreover, these 7/12 revenue extract also mentions the name of Ganotias who filed SCA No.4807 of 2008 before High Court as persons who did the agricultural operations. Hence, CIT (A) observed that there is no evidence of agricultural operations in F.Y. 2006-07 and 2007-08 as the land was in possession of Ganotias. The assessee has filed a letter no. TBT/OUT/ 4089 /22 dtd. 23.09.2014 and claimed that agricultural block situated at Dindoli Surat was kept under reservation by Government of Gujarat vide notification no. GH/100 of 2004 /DVP/1403/3307 dtd. 02.09.2014 and has been acquired under provision of Section 20 of Gujarat Town Planning Urban Development Act, 1976 and section 77 of Bombay Provincial Municipal Corporation Act, 1949(BPMC) for the public purpose by which it was conveyed that it was a case of compulsory acquisition. However, CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellate order. Since the land was in possession of Ganotias, who have not paid any rent on account of agricultural operations carried out by them on behalf of the assessee. However, the Ganotias were expected to pay token rent, but same was not paid. However, it is fact the Ganotais were carrying on agricultural operations, hence, there was agricultural operations on this land before two immediately preceding year from the date of sales or compulsory acquisition. In support of this contentions, the appellant has placed reliance in the case of CIT v. Amaratbhai S. Patel Tax Appeal No. 355 of 2013 of Hon ble Gujarat High Court ( copy of order placed at Page No. 52 to 56 of Paper Book) wherein it was held that for the purpose of section 10(37) it is not required that the assessee himself should carry out the agricultural operations on the land. The appellant referred para 8 of said order which states that In view of the above provisions, as noted , the Revenue contended that the assessee would not be entitled to the exemption since the agricultural land was not cultivated by the assessee himself. We may recall that CIT (Appeals) was himself convinced that such exemption would be a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion unless approval of statement government is taken. Hence, CIT (A) was right to confirming the action of the AO in disallowing the exemption 7. We have heard the rival submissions and perused the relevant material on record. We find that the AO has disallowed the claim under section 10(37) of the Act on the ground that the assessee has sold the land voluntarily, and it is not case of compulsory acquisition of land by SMC and there was no agricultural operations carried out in 2 years immediately preceding date of sale of agricultural land. Hence, conditions of section 10(37) of the Act are not satisfied. We find that there is no dispute that land is situated with 8 km of Municipal limit hence, it was acquired by the SMC. The AO noted that after F.Y. 2006-07, there was no cultivation as per 7/12 extract placed at Page No. 11 12 of Paper Book shows that the Kharif crop being grown as on 30.01.2007 and(PB-11) and 30.01.2006(PB-12). However Page No. 58 of Paper Book which is Extract of 7/12 also shows that Kharif crop being grown as on 04.02.2008. Thus, the land sold was an agricultural land, though the cultivation thereon was being done by Ganotias to whom the assessee has give ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. 31.08.2010 (PB-9) it has been clearly mentioned by the SMC that nature of payment was compulsory acquisition (Land/ Building).It is further seen from the perusal of letter no. TBT/OUT/ 4089/ 22 dtd. 23.09.2014 reproduced by the CIT (A) at Page No. 20 of appellate order, that land in question was placed under reservation by the Government of Gujarat vide order dated Notification No. GH/V/100 of 2004/DVP/1403/3307/L dtd. 02.09.2014 under the provision of section 20 of Gujarat Town Planning Urban Development Act 1976 at the disposal of the SMC to acquire the land under section 77 of Bombay Provincial Municipal Corporation Act, 1949 for erection of Sewerage Treatment Plant. Thus, it was a case of compulsory acquisition of land for which the SMC under the instruction of Government of Gujarat for which the SMC has also given a certificate dated 12.08.2010 [letter no. ACT/SR/NO2861] wherein nature of payment to the assessee is described against compulsory acquisition of land at Dindoli. The ld. CIT (A) has not appreciated this letter submitted by the appellant before him in proper perspective. This view of us is also supported decision of CIT (A)II, Surat, in his appellate order dt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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