2007 (11) TMI 603

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....ome-tax Department. 3. The essential facts in this case are that the land of the respondent was acquired under the Land Acquisition Act, 1894. The land acquisition notification was issued on 15-11-1975. Section 17(4) of the Land Acquisition Act, 1894 had been applied. Possession of the land was taken on 23-12-1983 (i.e., during assessment year 1984-85). A small part of the compensation that is Rs. 25,000 was received by the respondent on 11-7-1984 (i.e., during assessment year 1985-86). The compensation award was given by the Collector/Land Acquisition Officer on 18-9-1986. The remaining compensation amounting to Rs. 1,77,708 pursuant to the said award was received by the respondent on 3-9-1987 (i.e., during assessment year 1988-89). ....

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....on taking of possession, therefore, the date of transfer in matters of compulsory land acquisition would be the date on which possession is taken. 7. For ready reference section 16 of the Land Acquisition Act, 1894, is quoted below :- "Power to take possession.-When the Collector has made an award under section 11, he may take possession of the land, which shall thereupon vest absolutely in the Government, free from all encumbrances." 8. Incidentally, under section 2(47) of the Income-tax Act, 1961, 'transfer' in relation to a capital asset includes the compulsory acquisition thereof under any law. 9. We have considered the matter and we are of the opinion that the contention of the department in respect of the assessment ....

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....t been added. That section has been inserted by Finance (No. 2) Act of 1991 with effect from 1-10-1991. For ready reference, the said provision is quoted below :- "54H. Extension of time for acquiring new asset or depositing or investing amount of capital gain.-Notwithstanding anything contained in sections 54, 54B and 54D of compulsory acquisition under any law and the amount of compensation awarded for such acquisition is not received by the assessee on the date of such transfer, the period for acquiring the new asset by the assessee, referred to in those sections or, as the case may be, the period available to the assessee under those sections for depositing or investing the amount of capital gain in relation to such compensatio....