Tribunal upholds tax on land compensation due to timing & Act provisions

The Tribunal upheld the tax liability on compensation received by the appellant for land acquisition by the National Highway Authority of India. The decision was based on the timing of entitlement to compensation and the inapplicability of the RFCTLARR Act provisions, dismissing the appellant's appeal.

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Issues:
1. Assessment under section 156 of the Act
2. Claim under section 154 of the Act
3. Entitlement for deduction under section 10(37) of the Income Tax Act
4. Exemption from levy of capital gain under section 45(5) of the Act

Analysis:

Assessment under section 156 of the Act:
The appellant challenged the assessment order for the assessment year 2014-15, disputing the liability to be assessed under a notice dated 07.11.2017 issued under section 156 of the Act. The Assessing Officer rejected the appellant's claim based on the timing of the assessment order and the absence of relevant CBDT Circular at that time. The CIT(A) upheld the rejection, stating that the rectification sought was not a mistake apparent on record. The Tribunal observed that the compensation was received after the RFCTLARR Act came into force, but ruled against the appellant, emphasizing the date when the appellant was entitled to receive the compensation, not when it was actually received.

Claim under section 154 of the Act:
The appellant moved an application under section 154 along with a CBDT Circular, claiming no tax liability on land acquisition by the Government under the RFCTAAR Act. The Assessing Officer rejected the claim, citing the absence of the Circular at the time of assessment. The CIT(A) dismissed the appeal, stating the rectification sought was not a mistake apparent on record. The Tribunal concurred, emphasizing the timing of entitlement to compensation for taxability determination.

Entitlement for deduction under section 10(37) of the Income Tax Act:
The appellant contended entitlement for deduction under section 10(37) of the Income Tax Act, asserting that the compensation received should not be subjected to tax. The Tribunal, however, noted the timing of land acquisition and compensation payment, ruling against the appellant's claim for exemption under section 10(37).

Exemption from levy of capital gain under section 45(5) of the Act:
The appellant claimed exemption from capital gain levy under section 45(5) of the Act, citing the compensation received post the enactment of the RFCTLARR Act. The Tribunal analyzed the relevant provisions and concluded that the Act's provisions were not applicable due to the timing of the award and compensation payment. The Tribunal emphasized the date of entitlement to compensation for taxability, dismissing the appellant's appeal.

In conclusion, the Tribunal dismissed the appeal, upholding the tax liability on the compensation received by the appellant for land acquisition by the National Highway Authority of India. The decision was based on the timing of entitlement to compensation and the inapplicability of the RFCTLARR Act provisions to the transaction in question.

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