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TMI Blog2025 (2) TMI 826X X X X Extracts X X X X X X X X Extracts X X X X ..... land is involved. The AO is further directed to verify whether Form J issued in the name of Director are related to the sale of agriculture produce by the assessee or not. The AO is also directed to allow proper opportunity and assessee is directed to make proper compliance of the notice issued by the AO. Addition on account of gain from the compulsory acquisition of land by holding the same as unexplained income of the assessee - assessee is not entitled for exemption on the compensation received of the said land acquired by NHAI. He further observed that the assessee is not entitled for exemption u/s 10(37) of the Act as the same is not available to companies as well as in case of non-agricultural land - HELD THAT:- As per amended sub-section 3 of section 105, the provisions of the RFCTLARR Act, 2013 relating to the determination of compensation in accordance with First schedule shall apply to all cases of land acquisition under the enactments specified in Fourth schedule of the said Act. Since NHAI Act is already included in Fourth schedule of the RFCTLARR Act, 2013 thus exemption as provided in section 96 of the said act is available in cases where land is compulsory acquired ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2021-22/1042150274(1) u/s 263 of the Income Tax Act, 1961 ["the Act"] arising from the assessment order dated 25.12.2019 passed u/s 143(3) of the Act pertaining to assessment year 2017-18 (in ITA No.1369/Del/2022). 2. The issues are common, interlinked and similar in both appeals arising by the assessee for AYs 2016-17 and 2017-18. Hence, both appeals have been heard together and accordingly adjudicated by a common order. ITA No.1798/Del/2021 [Assessment Year : 2016-17] 3. Ground No.1 is general in nature, needs no separate adjudication. 4. Ground Nos. 2 to 4 are in relation to the addition of INR 20,01,529/- made u/s 68 of the Act by holding the agricultural income as unexplained income of the assessee. 5. Brief facts leading to this issue are that the assessee is a company and having land on which agricultural income of INR 38,43,270/- was declared and claimed as exempt income. During the course of assessment proceedings, details of agricultural income were not filed therefore, the AO has treated the said income as unexplained and added to the total income of the assessee company u/s 68 of the Act. 6. In first appeal before the Ld.CIT(A), the assessee has filed fresh eviden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bmitted were in the name of the Director of the assessee company and not in the name of the assessee-appellant. She further submits that the Shri Jagroop Singh who cultivates the land at Malakpur, District Mansa which is situated at 110 KMs therefore it is not possible for him to carry out agricultural activity day to day basis. She further supports the order of the lower authorities and prayed for the confirmation of the additions made. 9. We have heard the rival submissions and perused the material available on record. We find that the assessee is having both types of land i.e. agricultural as well as commercial land and part of the lands were acquired by National Highway Authority of India ("NHAI"). The Ld.CIT(A) while confirming the additions, has observed that the assessee has not been able to clarify as to how the agricultural operations were claimed to have been carried out on commercial land. Before us also, the assessee could not be able to justify whether the agricultural income earned, were from the agricultural land and no commercial land was used for the same. Moreover, Form J submitted contained the name of the Director of the assessee company. All these facts need p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e tax is leviable on the award made in this Act. The relevant section is reproduced as under:- 96. "Exemption from income-tax, stamp duty and fees-No income tax or stamp duty shall be levied on any award or agreement made under this Act, except under section 46 and no person claiming under any such award or agreement shall be liable to pay any fee for a copy of the same." 13.1. He further submits that section 105 stood was amended by Ordinance No.9 of 2014 wherein sub-section (3) of section 105 of RFCTLARR Act, 2013 is superseded by a new section (3) wherein requirement of issuing notification was done away and therefore, enactments appearing in Fourth Schedule which contained NHAI are also covered under the provision of RFCTLARR Act, 2013. This amendment has come into operation from 01.01.2015. 14. Ld.AR submits that though one of the land acquisition order was issued on 04.02.2014 however, the compensation were received by the assessee starting from 09.09.2015 to 17.03.2016 and therefore, the amendment made in section 105(3) of RFCTLARR Act, 2013 w.e.f. 01.01.2015 is applicable to the case of the assessee and there is no requirement to issue notification under the RFCTLARR Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... House of Parliament, while it is in session, for a total period of thirty days which may be comprised in one session or in two or more successive sessions, and if, before the expiry of the session immediately following the session or the successive sessions aforesaid, both Houses agree in disapproving the issue of the notification or both Houses agree in making any modification in the notification, the notification shall not be issued or, as the case may be, shall be issued only in such modified form as may be agreed upon by both the Houses of Parliament. 16.1. Sub-section 3 to Section 105 of the RFCTLARR Act, 2013 is substituted by the Ordinance No. 9 of 2014 w.e.f. 01.01.2015 and the relevant amendment in sub-section (3) to Section 105reads as under: (3) The provisions of this Act relating to the determination of compensation in accord acne with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule shall apply to the enactments relating to land acquisition specified in the Fourth Schedule with effect from 1st January, 2015." 16.2. It is thus clear that after the amendment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... LARR Act which came into effect from 1st January, 2014, in section 96, inter alia provides that income-tax shall not 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 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 agreement which has been exempted from levy of income-tax vide section 96 of RFCTLARR Act shall also not be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere there 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 ITR139 (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 I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me-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." 17. Regarding the judgement of Co-ordinate Bench of ITAT, Agra in the case of Jagdish Arora as relied upon by the Revenue, we find that the said judgement pertained to AY 2010-11 when the RFCTLARR Act, 2013 was not introduced and therefore, the said judgement was not applicable in the facts of the case of the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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