2015 (8) TMI 988

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....Industrial Area Development Act, 1966 (for short 'the KIAD Act'). The final notification was published on 17.05.2007. Thereafter, on the basis of an agreement entered into on 07.10.2008, the assessee was paid a compensation of Rs. 1,47,48,750/- for the compulsory acquisition of his land which he had purchased on 27.07.2006. For the said assessment year 2009-10, the assessee-appellant filed his return of income on 30.07.2009 declaring a total income of Rs. 5,33,780/-. The case of the assessee was selected for scrutiny and notice under Section 143(2) of the Act was issued on 18.08.2010. In his return, the assessee-appellant had disclosed receipt of compensation of Rs. 1,47,48,750/- in pursuance of the agreement dated 07.10.2008 but claime....

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....s under: "Incomes not included in total income. 10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included ----- (1) to (36) xxx (37) in the case of an assessee, being an individual or a Hindu undivided family, any income chargeable under the head "Capital gains" arising from the transfer of agricultural land, where --- (i) such land is situate in any area referred to in item (a) or item (b) of sub-clause (iii) of clause (14) of section 2; (ii) such land, during the period of two years immediately preceding the date of transfer, was being used for agricultural purposes by such Hindu undivided family or individual or a parent of his; (i....

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....cquisition would not arise. However, the Appellate Commissioner as well as the Tribunal did not agree with the reasoning of the Assessing Officer with regard to the assessee being in possession of the land in question for less than one year but categorically affirmed the finding of the Assessing Officer to the extent that no agricultural activity was being carried out on the land in question during the two years prior to 07.10.2008. Such findings of fact are primarily based on the revenue records, and also some inspection which was carried out by the Assessing Officer, which we need not go into much detail. The authorities below have also taken into account the certificate issued by the Special Land Acquisition Officer at the time of taking....

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....onsistent or contrary to each other that there was plantation of Eucalyptus saplings. What is to be considered is that for being granted benefit under sub-section (37) of Section 10 of the Act, the land in question should have been put to agricultural use by the assessee for the preceding two years. Even if we accept the contention of the appellant that he was in possession of the land for two years from 27.07.2006 to 07.10.2008, then too, from the records it is not at all clear that for both the years the appellant was carrying out agricultural activity in the land in question. The Tribunal has further examined the issue and held that if at all there was any agricultural activity being carried on by the appellant in the previous two years,....