TaxTMI 
TaxTMI 
2012 (10) TMI 322
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.... by the State Government and consequently erred in holding that it is liable to Capital Gains tax. 2. The CIT(Appeals) erred in not holding that there was no cost of acquisition for the new eight granted by the State Government to draw water from the well already compulsorily acquired by it with all the rights attached to the well by paying full compensation for all the rights embedded with and in the ownership of the well and consequently erred in not holding that the amount of compensation of Rs. 15 lakhs received by the appellant for giving up this New right to draw water in favour of the Pune Municipal Corporation was not liable to Capital Gains Tax. 3. Without prejudice to Ground Numbers 1 and 2 above, the CIT(Appeals erred in ho....
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....ation in the year relevant to A.Y. 2003-04. In return filed for relevant Assessment Year, i.e., 2003-04 the assessee claimed exemption in respect of said amount of Rs. 15 lakh received by him. The said amount was paid to assessee on ground that he had surrendered his right to use water from a well for effective widening the road by Pune Municipal Corporation (hereinafter called PMC) because said area was handed over to P.M.C. from P.W.D. It was claimed that there was no cost of acquisition for which rights. According to learned Authorised Representative of assessee the provisions of section 45 were not attracted and consequently no capital gain could have arosen for said payment of Rs.15,00,000/-. Assessee relied on the decision of Hon'b....
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....e assessee has not incurred any cost for acquisition of the said right. It was further clarified that when the PMC who took over the area from PWD and started filling the well for effectively executing road widening work. The assessee approached the concerned civil court against filling of said well because he had acquired right to lift water from same. However matter was settled mutually by the parties to litigation which is not in dispute. Accordingly settlement was arrived between the parties and in terms of mutual settlement the assessee was paid payment of Rs. 15 lakhs for surrendering the right to lift water from said well. Out of the above amount of Rs. 15 lakhs, Rs. 6,26,194/- was contributed by Pune Municipal Corporation and remain....
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....ablish welfare institutions like hospital, educational institutions etc. and develop other infrastructural facilities. Developing infrastructure including improvement of surface transport is one of development activity done by State Government and Central Government as the case may be. As a welfare measure, i.e. P.W.D. (one of the organs of State Government) had to widen road for smooth transport to address increasing pressure on existing roads for which adjoining lands are acquired. Such widening covered assessee's land. Accordingly assessee's land falling in Survey No.162/1 & 2 as mentioned above along with other lands was acquired under relevant provisions of Land Acquisition Act in 1986 and compensation thereof was given by concerned La....
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....ll for consideration of Rs. 15 lakhs, we find that the land of assessee in question was acquired for widening the road and the assessee was paid the compensation in respect of said agricultural land vide award of 1986 which stood concluded as discussed above. However, State Government in exclusion of the other agriculturists falling in the said award, granted a special privilege to assessee for lifting the water from said well without disturbing the widening of the road by paying nominal rent of Rs.1/- per year. Subsequently it was not found practically possible to allow lifting of water from said well for effective widening of the road. Ultimately it was decided that widening is not possible without filling well which was opposed by the as....