2016 (4) TMI 431 - HC - Income Tax

Appeal dismissed on land acquisition compensation exemption upheld under Income Tax Act

The appeal challenging the order of the Income Tax Appellate Tribunal under section 260A of the Income Tax Act, 1961 was dismissed. The Tribunal upheld ... Exemption u/s 10(37) - compensation received from the Surat Municipal Corporation for acquisition of its lands - Held that:- Tribunal upon appreciation of the evidence on record has concurred with the findings of fact recorded by the Commissioner (Appeals) and has found as a matter of fact that the assessee was carrying on agricultural activity on the land in question being Survey No.192, Block No.305 in village Dindoli. The Tribunal has also concurred with the finding recorded by the Commissioner (Appeals) that the land in question is situated within the municipal limits of SMC in terms of item (a) of sub-clause (iii) of clause (14) of section 2 of the Act. Insofar as the land in question having been acquired by way of compulsory acquisition is concerned, that is an undisputed position. The fourth condition, namely, that the income arising out of the acquisition in relation to such transfer should have been received on or after 1.4.2004 is also an undisputed position. Thus, the Tribunal, after appreciation of the evidence on record, has recorded a concurrent finding of fact to the effect that the assessee fulfills all the requisites for the purpose of being entitled to exemption under section 10(37) of the Act and has based its conclusion thereon. It is not the case of the appellant that the Tribunal has placed reliance upon any irrelevant material or that any relevant material has been ignored, nor is the learned counsel for the appellant in a position to dislodge the concurrent findings recorded by the Tribunal by pointing out any material to the contrary. Except for the contention that in the sale deed, the subject land is not shown to an agricultural land, no other contention has been raised. Under the circumstances, it is not possible to state that the impugned order suffers from any legal infirmity warranting interference. - Decided in favour of assessee Issues:1. Challenge to the order of the Income Tax Appellate Tribunal under section 260A of the Income Tax Act, 1961.2. Determination of whether the land in question qualifies as agricultural land for exemption under section 10(37) of the Act.Analysis:Issue 1: The appellant revenue challenged the order of the Income Tax Appellate Tribunal (ITA) under section 260A of the Income Tax Act, 1961, proposing substantial questions of law. The first question pertained to the deduction of Tax Deducted at Source (TDS) by the Surat Municipal Corporation (SMC) on compensation paid to the assessee for non-agricultural land acquisition. The second question focused on the ITA upholding the decision treating the land as agricultural without sufficient evidence of agricultural income generation.Issue 2: The respondent-assessee filed for exemption of compensation received from SMC for land acquisition under section 10(37) of the Act. The Assessing Officer initially denied the claim, citing TDS deduction by SMC as proof of non-agricultural land. However, the Commissioner (Appeals) found evidence of agricultural activities on the land through official records. The Commissioner concluded that all conditions under section 10(37) were met, exempting the compensation. The Tribunal upheld this decision, noting the fulfillment of all requisite conditions for exemption.In conclusion, the Tribunal's decision was based on concurrent findings of fact, affirming the fulfillment of conditions for exemption under section 10(37) of the Act. The Tribunal did not rely on irrelevant material, and no legal infirmity was found in the decision. As such, the appeal challenging the Tribunal's order was dismissed for lack of substantial legal questions.