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TMI Blog2019 (12) TMI 1291X X X X Extracts X X X X X X X X Extracts X X X X ..... , namely of the cultivation of such land by the assessee would crucial. So far the contention of the assessee that land was agricultural land and it was case of compulsory acquisition by SMC, it is noticed that as per letter no. ACT/SR/3161 dated. 31.08.2010 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 dated. 23.09.2014that 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 dated. 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. ITAT- D- B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up I.T.A.No.1566/AHD/20116 in the case of Shri Satish M Patel for assessment year 2009-10 as lead case whose finding would mutatis mutandis apply to other cases listed above. 3. The assessee has taken as many as 7 grounds of appeal stating that Ld. CIT (A) has erred in holding the appellant ineligible for exemption under section 10(37) on the basis of failure to qualify definition of Compulsory acquisition and ought to have held acquisition of impugned agricultural land by Surat Municipal Corporation (SMC) eligible for exemption under section 10(37) of the Act .The sum in substance these grounds relates to not allowing long-term capital gain as exemption under section 10(37) of the Act arising in respect of land acquired under compulsory acquisition by Surat Municipal Corporation (SMC). In view of these facts and circumstances, these grounds of appeal are being considered together as common ground for the sake of convenience and brevity. 4. Brief facts are that the assessee along with other co-owners has sold immovable property on 29.09.2008 for ₹ 3,80,40,000 in which assessee`s share was 1/3rd which worked out to ₹ 1,26,80,000.. Therefore, the AO has considered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atment Plant to erected by the SMC and proceedings for acquisition of land were initiated. However, in the meantime the land owners have entered into negotiation with SMC and sellers agreed to sell the subject land at negotiated price and conveyed their consent. Therefore, CIT (A) viewed that reservation per se cannot be termed as acquisition of land leave aside compulsory acquisition instead of purely sale and purchase transaction between SMC and the assessee / group of the assessee. The CIT (A) has also distinguished the decision of tribunal in the case of ITO v. Shri Dipak Kalidas Pauwaala in the name 2685/Ahd/2011 relied by the assessee on the ground that that there are contradictory certificate from Day Commissioner (P D) SMC Resolution and negotiation. However, CIT (A) of the view as per hat section 77 of Bombay Provincial Municipal Corporation Act, 1949, the SMC is not competent to make compulsory acquisition and it only competent to make recommendation to government. Therefore, the assessee has neither done agricultural operations before two years nor the case if of compulsory acquisition hence, the assessee is held to be not entitled for exemption under section 10(37) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f but by the tenants. The appellant further supported his view that by placing reliance on the order dated 19.11.2015of CIT (A)-II, Surat, in the case of Shri Ramesh B Nagarsheth in I.T.A.No. 1939/Ahd/2015 date 30.08.2018, wherein the tribunal has held the sale of land as compulsory acquisition and allowed the exemption claimed under section 10(37) of the Act. in respect of land situated at Dindoli Similarly, the learned counsel for the assessee has relied in the case ITO v. Shri Dipak KalidasPauwaala in the name 2685/Ahd/2011 wherein the decision of it was held that the land in Dindoli (at Block no. 305) was acquired by SMC for sewerage Treatment Plant are agricultural land which has been compulsory acquired by SMC under the provision of section 107 of GTP UD Act, 1976 as the land needed for the purpose of Town Planning Scheme or Development Plan shall be deemed to be meaning for public purpose within the meaning of Land Acquisition Act , 1894 (I of 1894) and eligible for exemption under section 10(37) of the Act. This decision of Tribunal was also confirmed by the Hon`ble Jurisdictional High Court of Gujarat in [ Tax Appeal No. 249 of 2016 dated 28.03.2016] . 7. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goes without saying that had steps not been taken by the Government under Sections 4 6 followed by award under Section 9 of the LA Act, the appellant would not have agreed to divest the land belonging to him to Techno Park. He was compelled to do so because of the compulsory acquisition and to avoid litigation entered into negotiations and settled the final compensation. Merely because the compensation amount is agreed upon would not change the character of acquisition, from that of compulsory acquisition to the voluntary sale. It may be mentioned that this is now the procedure which is laid down ever, under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 as per which the Collector can pass rehabilitation and resettlement award with the consent of the parties/land owners. Nonetheless, the character of acquisition remains compulsory. 8. Per contra, the ld. Sr. D.R. relied on the order of the lower authorities and contended that execution of sale deed with SMC. Does not amount to compulsory acquisition. Further, the sale was voluntary and not under compulsory acquisition as the SMC does not have power to acquire la ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... compulsory acquisition of land at Dindoli. The ITAT- D- Bench, Ahmedabad in the case of ITO v. Dipak Kalidas Pauwala in I.T.A.No.2685/Ahd/2011 dated. 14.08.2015 wherein the Tribunal has held the that said land in Dindoli ( at Block no. 305) was acquired by SMC for sewerage Treatment Plant are agricultural land which has been compulsory acquired by SMC under the provision of section 107 of GTP UD Act, 1976 as the land needed for the purpose of Town Planning Scheme or Development Plan shall be deemed to be meaning for public purpose within the meaning of Land Acquisition Act , 1894 (I of 1894) and eligible for exemption under section 10(37) of the Act. This decision of Tribunal was also confirmed by the Hon`ble Jurisdictional High Court of Gujarat in Tax Appeal No. 249 of 2016 dated 28.03.2016. Therefore, respectfully following the decision of Coordinate Bench in the case of ITO v. Dipak Kalidas [I.T.A.No. 2685/Ahd/2011 dated. 14.08.2015 (PB-26-34) which has been confirmed by the Hon`ble Jurisdictional High Court of Gujarat in Tax Appeal No. 249/ 2016 dated. 28.03.2016(PB-19-25), we hold that the land in question was compulsory acquisition by the SMC under the direction of Governme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant agreed to execute the sale deed as well which was a necessary consequence and a step which the appellant had to take. In our view, insofar as acquisition of the land is concerned, the same was compulsorily acquired as the entire procedure prescribed under the LA Act was followed. The settlement took place only qua the amount of the compensation which was to be received by the appellant for the land which had been acquired. It goes without saying that had steps not been taken by the Government under Sections 4 6 followed by award under Section 9 of the LA Act, the appellant would not have agreed to divest the land belonging to him to Techno Park. He was compelled to do so because of the compulsory acquisition and to avoid litigation entered into negotiations and settled the final compensation. Merely because the compensation amount is agreed upon would not change the character of acquisition, from that of compulsory acquisition to the voluntary sale. It may be mentioned that this is now the procedure which is laid down ever, under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 as per which the Collector can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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