Compulsary Acquisition of land By HDBRTS is exemption under capital gain

[Kalmesh Siddatagimath]

Sir, the assessee a partnership firm had received compensation from HDBRTS for compulsary acquisition of their property in the F.Y.- 2015-16. The assessing Officer has passed the order w.r.t the compensation amount in F.Y.- 2018-19, by adding compulsary acquisition amount under the head of Income from Capital Gain because the Land was acquired under section 15 of the Karnataka State Highway Act, 1964 and the compensation amount has been paid under section 27 of the Act, with land owner consent and compensation paid to the assessee by HDBRTS does not attract the provision of section 96 of the RECTLARR Act, 2013.Therefore the same is not eligible for exemption in accordance with CBDT Circular 303/2010, as claimed by the assessee.

Sir, kindly guide me whether the compensation amount awarded is exempt or not and the relevant section along with the case laws or recent judgements w.r.t the above issue.

AI Summary

Compensation for Land Acquisition Debated: Partnership Firm Challenges Capital Gain Classification Under Income Tax Act A partnership firm received compensation from HDBRTS for compulsory land acquisition in the fiscal year 2015-16. The assessing officer classified this compensation as capital gain in the fiscal year 2018-19, based on the Karnataka State Highway Act, 1964. The firm contested this classification, arguing that the compensation should be exempt under the RECTLARR Act, 2013, and CBDT Circular 303/2010. Three respondents in the discussion forum agreed that the compensation should not be treated as capital gain, citing that it does not fit the definition of capital gain under the Income Tax Act, 1961.