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TMI Blog2023 (2) TMI 1388X X X X Extracts X X X X X X X X Extracts X X X X ..... 2016 in para 3 states that exemption provided u/s 96 of the RFCTLAAR Act, 2013 is wider in scope than exemption provided under the existing provisions of the Act. CBDT Circular no. 36/2016, dated 25/10/2016 provides that in absence of specific provisions in the Income-tax Act, 1961, award under the RFCTLAAR Act, 2013, in the hands of land losers, both for agricultural and non agricultural land is tax free, both under normal and MAT provisions, under the Act. No reason to interfere with the findings of ld. CIT (A) directing ld. AO to delete the addition made in this respect. Accordingly, grounds taken in this respect are dismissed. Disallowance made towards salary expenses - CIT (A) has meritoriously dealt with the issue after going through the material placed on record for which, we do not find any reason to interfere with the same. Accordingly ground taken in this respect is dismissed. Disallowance of donation expenses claimed in the profit and loss account, it is a fact that assessee had suo moto added it back while computing its income and, therefore, no disallowance is called for in this respect as held by ld. CIT(A). Before ld. CIT(A), assessee has made a fresh claim of de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owever, ld. AO noted that provisions of Section 10(37) of the Act provides exemption on the capital gains arising only to an "individual" or "HUF" in respect of compulsory acquisition of an agricultural land situated in specified urban limit. According to him, it is not available to the assessee being a company. He, thus, disregarded claim of exemption made by the assessee and added Rs. 5,10,29,003/- to the total income of the assessee. 3.1. Further, in respect of salary expenses of Rs. 15,92,200/-, claimed in profit and loss account, ld. AO disallowed the same by observing that assessee has not produced books of accounts, bills, voucher and other documents for verification. On similar observations, ld. AO also added the amount of donation of Rs. 1,51,000/- claimed as expenses in profit and loss account by holding it as unexplained expenses u/s 69C of the Act. 4. Aggrieved, assessee went in appeal to ld. CIT(A). Before ld. CIT(A), assessee reiterated facts and submitted that assessee owned land, located at village Ujariyaon, Pargana, Tehsil and District Lucknow, measuring about 0.228 hectares. The said land was compulsorily acquired by Lucknow Development Authority ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is special as well as general provision special provision always prevails. This aspect has been well recognised by the Hon'ble Supreme Court in several cases * CIT v. Oriental Fire & General Insurance Co. Ltd. [2007] 161 Taxman 181,291 ITR 370 (SC) * Britannia Industries Ltd, v. CIT [2005] 148 Taxman 468, 278 ITR 546 (SC) * UOI v. AzadiBachao Andolan [2003] 132 Taxman 373, 263 ITR 706 (SC) * General Insurance Corpn. of India v. CIT [1999] 106 Taxman 389, 240 ITR 139 (SC). The AO's objection regarding section 10(37) does not hold good as exemption has not only been claimed under section 10(37) of the IT Act, 1961 but also under the RFCTLARR Act, 2013. Section 96 of the "RFCTLARR Act, 2013" exempts awards from the levy of Income-tax under the I.T Act, 1961. Section 96 was enacted under the 2013 Act for making tax-free award granted to the land losers but there was no specific provision to treat such award as tax-free under the Income-tax Act, 1961. CBDT vide Circular No: 36 of 2016 Dated 25/10/2016 offers due recognition to the provisions of section 96 enacted under the "RFCTLARR Act, 2013" so as to treat award under the said Act as tax-free under the In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levy of income-tax is barred by Section 96 and as a consequence, the deduction or collection under Section 194LA of the Income Tax Act, 1961, is impermissible" It is further seen that according to section 96 of the said Act and also as per the Circular No. 36 of 2016 it is clear that exemption from Income-tax provided under section 96 of the "RFCTLARR Act, 2013", being special Act, prevails over the Income-tax Act, 1961. The RFCTLARR Act, 2013 also applies to all land losers, irrespective of their status. Further any award in any form made under this Act as defined under section 96 (except those covered under section 46) is exempt from income-tax both under normal and MAT provisions under the I.T Act, 1961. Thus the addition so made of Rs. 5,10,29,003/- by disallowing the exemption is based on incorrect interpretation of the Act accordingly the same is directed to be deleted." 5. In respect of disallowance of salary expense of Rs. 15,92,000/-, ld. CIT (A) found favour with the assessee by observing that assessee has made payments through bank transfers for which ledger account was furnished and the same are duly reflected in books of accounts. Also, in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade (except those made under section 46) under the RFCTARR 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." "Para 3. As no distinction has been made between compensation received from compulsory acquisition of agricultural land and non-agricultural land in the matter of providing exemption from income-tax under section the RFCTLARR Act, the exemption provided under 96 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 the Board and it is hereby clarified that compensation received in respect of award or compensation has been exempted 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 provision of exemption for such compensation in the Income-tax A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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