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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 ..... Revenue by: Smt. Anupama Singla, Sr.(DR) & Sreenivas T. Bidari, CIT(DR) ORDER PER BENCH: 1. The above captioned appeals by the Assessee are directed against the common order of learned Commissioner of Income tax (Appeals)-1, Surat(in short "the CIT (A)") dated 28.03.2016 pertaining to various Assessment Years as mentioned in above table of cause title. 2. These appeals were heard together as common issue is involved and common appeal order is passed by the CIT (A). We are taking 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Gujarat vide notification no. GH/100 of 2004 /DVP/1403/3307 dated. 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. The CIT (A) observed that the AO has not debited the fact that the subject land was put under Reservation for Sewage Treatment 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 Commi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ural land was not cultivated by the assessee himself. We may recall that CIT (Appeals) was himself convinced that such exemption would be available even in case of a land situated in municipal area. But that the other conditions, namely of the cultivation of such land by the assessee would crucial." Thus, it was contended that exemption under section 10(37) would be available even if the land is situated in municipal area and being not cultivated by the assessee himself 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 u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... into the agreement, the appellant 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 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ban 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 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 Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that was fixed as above. To reiterate his grievance, the appellant, could have either taken the aforesaid adjudicatory route of seeking reference under Section 18 of the LA Act leaving it to the Court to determine the market value. Instead, the appellant negotiated with Techno Park and arrived at amicable settlement by agreeing to receive the compensation in the sum of Rs. 38,42,489/-. For this I purpose, after entering into the agreement, the appellant 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 litiga ..... X X X X Extracts X X X X X X X X Extracts X X X X
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