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TMI Blog2022 (9) TMI 337X X X X Extracts X X X X X X X X Extracts X X X X ..... 016 dt. 25/10/2016 clarified that the compensation received in respect of award or agreement which has been exempt from levy of Income Tax vide section 96 of the RFCTLARR Act shall also not be taxable under the provisions of Income Tax Act, 1961 even if there is no specific provisions of exemption for such compensation in the Income Tax Act, 1961. In the said Circular it is also clarified that no distinction had been made towards compensation received for compulsory acquisition of agricultural land and non agricultural land in the matter of providing exemption from income Tax under the RFCTLARR Act. In the instant case the assessee received compensation for compulsory acquisition of commercial land during the F.Y. 2014-15 which was exemp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rse and bad in law frets in as much as he failed to understand that TDS was deducted v/s 194LA treating it to be other than Agriculture Land, hence, it comes within the meaning of Capital Assets u/s 2(14)(iii). iv. The Order of CIT [A] is further perverse and bad-in-law facts in as much as he did not consider the Word, Compulsory Acquisition, for which the Assessee had given consent. v. The Order of CIT [A] is further perverse and bad-in-law frets in as much as he failed to consider the issue, reason and main frets behind the Addition, as to why the Assessing Officer has considered and treated it fit to be Capital Gain/Assets in the Assessment Order keeping in view of the provisions u/s 2(14)(iii) and u/s 10(37) of the I.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the head, agricultural income and Rs. 3,68,19,767/- under the head, compensation receipt amount totaling to Rs. 3,71,75,267/-. 3. Further, the AO issued notice u/s 142(1) to assessee to submit documentary evidence in relation to the compensation receipt and exempted income and in response to the same, the assessee had submitted his detailed reply. However, the AO on the basis of submission made by assessee, he had calculated the long term capital gain as under: Sale consideration Rs. 3,68,19,767/- Less: Estimated cost of acquisition Rs. 4,69,500/- 50,000/- x 939/100 Long Term Capital Ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of land as asked by AO during the assessment proceeding such as Gazette Notification in relation to acquisition of his land, sale receipt of agricultural product, letter of NHAI etc. which evidentially confirms the said compulsorily acquired land under the provision of section 2(14)(iii) of the I.T. Act. I have considered the submission made by the appellant and also going through documents such as Gazette Notification in relation to acquisition of land I am of the view that the whole of the capital gain arising on transfer of land by way of acquisition by the State Government is not taxable. I accordingly hold that the additions made by computing LTCG and disallowing exemption u/s 10(37) of the Income Tax is not sustainable. The same ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t be levied on any award or agreement made (except those made under section 46) under the RFCTLARR Act. Therefore, compensation received for compulsory acquisition of land under the RFCTLARR Act (except those made under section 46 of RFCTLARR Act), is exempted from the levy of income-tax. 3. As no distinction has been made between compensation received for compulsory acquisition of agricultural land and non-agricultural land in the matter of providing exemption from income-tax under the RFCTLARR Act. the exemption provided under section 96 of the RFCTLARR Act is wider in scope than Ihe tax-exemption provided under the existing provisions of Income-tax Act, 1961. This has created uncertainty in the matter of taxability of compensation r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the RFCTLARR Act is wider in scope than the tax exemption provided under the existing provisions of Income-tax Act, 1961. This has created uncertainty in the matter of taxability of compensation received on compulsory acquisition of land, especially those relating to acquisition of non agricultural land. The matter has been examined by board it is hereby clarified that compensation received in respect of award or agreement which has been exempted from levy of income tax vide section 96 of the RFCTLARR Act shall not be taxable under the provisions of Income-tax Act, 1961 even if there is no specific provision of exemption for such compensation in Income-tax Act, 1961 And as such the compensation received by the assessee against compu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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