2017 (7) TMI 1337 - AT - Income Tax

Tribunal allows appeal on agricultural land exemption under section 10(37) despite filing delay

Delay in filing appeal was condoned by the Tribunal due to the misplaced appeal papers, not attributable to the assessee. The matter proceeded to be ... Claim for exemption u/s 10(37) denied - whether negotiated sale after acquisition proceedings falls under compulsory acquisition under the Land Acquisition Act? - HELD THAT:- Admittedly, the land was acquired under Land Acquisition Act and additional compensation was received after negotiating and signing the sale deed. When the land was acquired by invoking the provisions of Land Acquisition Act, the dictum laid down by the Hon’ble Apex Court in BALAKRISHNAN VERSUS UNION OF INDIA & ORS [2017 (1) TMI 1380 - SUPREME COURT] will have application to the facts of the case, though the enhanced compensation was paid after negotiating and signing of the sale deed. Further, on perusal of the certificate issued by the revenue authority, it is clear that the impugned land is an agricultural land where agricultural operation was carried on till it was acquired. Therefore, the provisions of section 10(37) has application to the facts of the instant case and the amount received by assessee on acquisition of such land would not be includable in the total income. It is ordered accordingly. Issues:Delay in filing appeal - Condonation of delayExemption u/s 10(37) - Agricultural land or notDelay in filing appeal - Condonation of delay:The appeal was filed with a delay of 274 days, and the assessee sought condonation of the delay. The Chartered Accountant's affidavit explained that the delay was due to the paper for filing the appeal being misplaced in the office. The Tribunal found that there was sufficient cause for the delay as it was not attributable to the assessee. The delay was condoned, and the matter proceeded to be disposed of on merits.Exemption u/s 10(37) - Agricultural land or not:The case revolved around whether the land acquired by the assessee qualified for exemption under section 10(37) of the Income Tax Act as agricultural land. The assessee contended that the land was agricultural, supported by a certificate from the Agricultural Officer stating the same. The Assessing Officer disallowed the claim, citing lack of evidence regarding the agricultural nature of the land.The assessee appealed to the CIT(A), who upheld the disallowance, relying on a Kerala High Court judgment. Subsequently, the assessee appealed to the ITAT, arguing that the land was indeed agricultural and presenting the Supreme Court's decision overturning the Kerala High Court judgment. The ITAT analyzed the Apex Court's ruling, emphasizing that the land was compulsorily acquired under the Land Acquisition Act. The ITAT noted that negotiations for enhanced compensation did not change the compulsory acquisition nature of the land. The certificate from the revenue authority confirmed the land's agricultural status, making it eligible for exemption under section 10(37).In conclusion, the ITAT allowed the appeal, holding that the land qualified as agricultural and the amount received by the assessee upon acquisition was not includable in the total income under section 10(37). The judgment was pronounced on July 4, 2017.