TaxTMI 
TaxTMI 
2021 (12) TMI 161
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....hat section 24 of the Acquisition Act, 2013, is not made applicable to the acquisition made under the NH Act, 1956. 3. On the facts and circumstances of the case the Ld. CIT(Appeals) has erred in having held that taking the logic further section 96 of the Land Acquisition Act which exempts the compensation from Income-tax, is also not applicable to the land acquisition covered by NH Act. 4. The Ld. CIT(Appeals) has erred in having not rebutted the submissions of the assesee while giving finding merely relying on judgement of the Hon'ble High Court of Rajasthan. 5. On the facts and circumstances of the case the Ld. CIT(Appeals) has erred in having confirmed the order u/s 154 passed by the Ld. A.O. in not allowing the exemption from capital gains on compulsory acquisition of assessee's land. The assessee craves leave to add to alter or amend the above grounds of appeal before the same is heard or disposed of. 4. The main grievance of the assessee relates to the exemption from the Income Tax of the compensation received on acquisition of land. 5. Facts of the case in brief are that the assessee filed the return of income on 30/11/2015 decl....
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....(Rs.) TDS Deducted (Rs.) Net Compensation received (Rs.) 1. 322 19.10.2015 Agriculture Land 05.11.2014 2,68,676/- - 2,68,676/- 2. 245 10.07.2015 Commercial Land 23.01.2015 1,54,53,202/- 15,45,320/- 1,39,07,882/- 5.2 The assessee appended note to the aforesaid details of the compensation received as under: Note: As per certificate from the O/o the Collector Land Acquisition-cum-S.D.M. Sangrur, the above said Agriculture and Commercial Land had been acquired by the Land Acquisition Officer for Road No. NH-64 and vide the Notification No. S.O. 42/C.A.2/1899/S.9/2/2008 Dated 09.02.2008 of the Punjab Govt., the amount equilent to this Award of compensation for purchase of Commercial land will be exempted from Stamp Duty and Registration Charges. 5.3 The A.O. observed that the assessee claimed credit for TDS amounting to Rs. 15,87,848/- corresponding to the interest income declared in the return and the compensation received. The case was processed under section 143(1) of the Act as such, thus, as on date the returned income stands to be assessed income and there was no mistake which was self evident and apparent from the rec....
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....ith copy of the circular issued by CBDT along with original ITR with computation as well as rectified computation of income. The learned AO has rejected the application on dtd. 09/11/2018. Now present appeal has been filed for getting relief. Ground No. 2: The Impugned order is illegal and time barred as the same has not been passed within prescribed time mentioned u/s 154(8) of the Income Tax Act, 1961 As per the provisions under section 154(8) of the IT. Act, 1961 :- " Where an application for amendment under this section is made on or after the 1st day of June, 2001 to an income tax authority referred to in sub-section (1), the authority shall pass an order, within a period of six months from the end of the month in which the application is received by it- (a) Making the amendment; or (b) Refusing to allow the claim. In the present case application u/s 154 was filed as on 03/01/2018 and order of the same has been received as on 14/11/2018 i.e after the more than 6 months from the end of month in which the application is made. Six months were completed as on 31/07/2018 but order made as on 09/11/2018 and received as on 14/11/2018. As t....
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.....T. Act, 1961 there is provision of exemption of capital gain on acquisition of agricultural land but there is no provision of exemption on acquisition of commercial land. As the assessee has received compensation on acquisition of commercial land during the FY 2014-15, due date to file the return was 07/09/2015 but the assessee has filed his return delayed i.e as on 30/11/2015 due to waiting any clarification from Income Tax Department. But CBDT has issued circular no 36/2016, dtd 25/10/2016 after a long period of due date of Wing of return. The assessee has no other option to file return by deposit tax on capital gain and the assessee has done his duty by truly showing his income and deposit the tax along with interest accordingly. After that as soon as the appellant came to know about this circular, he has filed rectification application accordingly. Copy of the Circular is enclosed here with. Honourable High Court of Punjab and Haryana is also upheld its view in the case of B.S. Bajaj & Sons Vs CTT, IT reference no 104 of 1982 dtd. 05/08/1996-Whether a circular, which is clarificatory in nature extending benefit to assessee in consonance with provisions of act, has to ....
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.... whether the impugned transaction is exempt being covered under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013 (hereinafter RFCTLARR) made applicable from January 2014; whereas as per Sections 105& 106 of the RFCTLARR r/w the 4th Schedule of the same Act; The National Highway Authority of India (NHAI), prima-facie is one the bodies covered u/s 106 of the RFCTLARR. It may also be pointed out that per schedule 1 of RFCTLAAR Act compensation includes additional compensation, solatium and any other receipt implying that solatium and interest are part of compensation. The LD AR also cited the Central Board of Direct Taxes circular No. 36/2016 dt. 25.10.2016 which extended the exemption by including compulsorily acquired land without any restriction on area as well as classification of land. 5.1 That the land acquired on which compensation has been received has been acquired by the National Highway ( NHAI) is matter of record and is undisputed. That the NHAI is one of the 13 authorities covered under the fourth schedule of the RFCTLARR Act is also crystal clear. The Ld. AO has however, not addressed the appellant'....
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....Act has been a matter of considerable judicial controversy. In a nutshell the controversy was that whether the award under the provisions of section 28 of Land Acquisition Act 1894 Act is in the nature of enhanced compensation and therefore exempt u/s 13(37). Or Is it the nature of interest and therefore taxable u/s 56(2)(viii) rws 57(iv) and 145A(b) The Hon'ble Supreme Court in the case of CIT v/s Ghansham (HUF) 315 ITR 1 held that interest paid on the excess amount, u/s 28 of 1894 Act, is a part of enhanced compensation. However, after this order the Hon'ble Jurisdictional Punjab and Haryana High Court in the case of Manjeet Singh (HUF) Karta, Manjeet Singh Vs Union of India 2016 237 taxmann 116 (P & H) referred to the decision of the Hon'ble Supreme Court in the case of CIT v/s Ghanshyam (Supra), and also referred to a number of other decisions of the Hon'ble Supreme Court and held that the interest received u/s 28 of the Land Acquisition Act is in the nature of interest and is taxable. 5.7 The Hon'ble Jurisdictional Punjab and Haryana High Court while adjudicating this decision referred to the following three judg....
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....on 105 & 106 of the RFCTLARR Act, (other than compensation u/s 46 of the RFCTLARR Act) is exempt from taxation. In the instant case, what has been taxed by the Ld. AO as interest, may, if the transaction is found to be covered RFCTLARR Act; is as per the terms of Schedule 1 of the RFCTLARR Act in the nature of enhanced compensation. Further solatium within the terms of Section 31 of the RFCTLARR Act is also part of the compensation. The relevant Section 31 is reproduced as under: 31. Award of solatium. 1. The Collector having determined the total compensation to be paid, shall, to arrive at the final award, impose a "Solatium"amount equivalent to one hundred per cent. Of the compensation amount. Explanation.- For the removal of doubts it is hereby declared that solatium amount shall be in addition to the compensation payable to any person whose land has been acquired. 2. The Collector shall issue individual awards detailing the particulars of compensation payable and the details of payment of the compensation as specified in the First Schedule. 3. In addition to the market value of the land provided under section 27, the Collector shall,....
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....eficiaries specified in the notification for acquisition under section 4 of the said Land Acquisition Act, shall be entitled to compensation in accordance with the provisions of this Act. 5.14 The hon'ble High Court has ruled as under The Acquisition Act of 2013 came into force on 01.01.2014, wherein Sub-section (1) of Section 105 of the Acquisition Act of 2013 provides that the provisions of this Act shall not apply to the enactments relating to land acquisition specified in the Fourth Schedule. The NH Act of1956 figured in the Fourth Schedule at Serial No. 7. The unamended provision of Sub-section (3) of Section 105 of the Acquisition Act of 2013 is as follows :- "(3) The Central Government shall, by notification, within one year from the date of commencement of this Act, direct that any of the provisions of this Act relating to the determination of compensation in accordance with the First Schedule and rehabilitation and resettlement specified in the Second and Third Schedules, being beneficial to the affected families, shall apply to the cases of land acquisition under the enactments specified in the Fourth Schedule or shall apply with such except....
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.... Section 105 of the Acquisition Act of 2013 (as amended), the provision of the Acquisition Act of 2013 relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule have only been applied in the NH Act of 1956 and Section 24 of the Acquisition Act of 2013 is not made applicable to the acquisitions made under the NH Act of1956. In view of the above, it is held that Section 24 of the Acquisition Act of 2013 has no application in the acquisition proceedings under the NH Act of1956. Now the question comes whether the determination of compensation in lieu of the acquisition of land of the petitioners is to be determined as per the First Schedule of the Acquisition Act (13 of 15) of 2013 or not. As stated earlier, it is not in dispute that the final awards in respect of the notification issued under Section 3A of the NH Act of 1956 were issued under Section 3G of the NH Act of 1956 prior to 31.12.2014 and whole amount of compensation was deposited by the MoRTH and the PWD with the CALA before 31.12.2014. ....
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....n completed and settled and such cases would not be reopened. As stated earlier, in all these writ petitions, the petitioners have admitted that they have received the compensation as determined in the awards passed under Section 3G of the NH Act of 1956 and they have not disputed this fact that they received (15 of 15) the said compensation amount prior to 31.12.2014. Though, assertion is made on behalf of the petitioners in these writ petitions as well as during the course of argument that the majority of the land owners was not paid the compensation before 31.12.2014, yet no material is produced on record to prove the said fact. Only the information, said to have been received under the Right to Information Act, is furnished in some of the writ petitions, however, from the said information, it cannot be gathered that compensation was not paid to the majority of the land owners on or before 31.12.2014. Moreover, it is not in dispute that the acquiring authority i.e. MoRTH and the PWD had already deposited the whole amount of compensation with the CALA before 31.12.2014 and, therefore, it cannot be said that the compensation was not paid before 31.12.201....
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....issued the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Removal of Difficulties) Order, 2015 vide Notification dated 28.08.2015. The said Order is reproduced below:- "(1) This Order may be called the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Removal of Difficulties) Order, 2015. (2) It shall come into force with effect from the 1 st day of September, 2015. (12 of 15) (3) The provisions of Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule shall apply to all cases of land acquisition under the enactments specified in the Fourth Schedule to the said Act." From the above, the High Court has ruled, it emerges that the applicability of the Acquisition Act of 2013 has been given effect in respect of the enactment specified in Fourth Schedule including the NH Act of 1956 with effe....
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....4 of the Act was filed on 03/01/2018 therefore the said application was valid and has to be acted upon. It was submitted that even the rectification can be made by A.O and the Ld. CIT(A) of their own notion and the signature of assessee are not required. It was further submitted that the A.O. had not asked the assessee for furnishing of power of attorney before dismissing the application under section 154 of the Act and that the A.O. decided the issue on merit. It was stated that the assessee had given the detailed submissions on merit and also on the maintainability of application under section 154 of the Act, the Ld. CIT(A) had dealt with the issue threadbare for maintainability of application under section 154 of the Act and passed the order consisting of 14 pages without adversely commenting on the issue of signing the application by the representative of the assessee or that it was time barred. It was contended that though the Ld. CIT(A) dismissed the appeal of the assessee on merit only thus he had accepted the claim of the assessee that the application under section 154 of the Act was legally maintainable. It was also contended that after passing of the order by the Ld. CIT(....
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....was contended that the assessee received compensation from National Highway Authority of India (NHAI in short) on 05/11/2014 & 23/01/2015. It was further stated that the NHAI is one of the 13 authorities covered under the fourth schedule of the RFCTLARR Act and this fact was also admitted by the Ld. CIT(A) who duly stated in para 5 at page 5 of the impugned order that " The National Highway Authority of India (NHAI), prima-facie is one of the bodies covered under section 106 of the RFCTLARR and that as per Schedule 1 of the RFCTLAAR Act Compensation includes additional Compensation, solatium and any other receipt implying that solatium and interest are part of Compensation ." 8.5 It was contended that the CBDT duly exempt the compensation received under the RFCTLARR Act from the provisions of the Income Tax Act and that the NHAI Act, 1956 is an Act to provide for the declaration of certain highways and for the matters connected therewith. It was further contended that the Circular No. NH 11011/30/2015- LA by the Government of India issued by Ministry of Roads And Transport and Highways, dt. 13/01/2016, have clarified the applicability of provisions of RFCTLARR Act 2013 to NH Act....
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.... the appropriate Government acquires land for its own use, hold and control, including for public sector undertakings and for the public purposes and shall include the following purposes namely: Sub clause (B) for infrastructure projects, which includes the following, namely; (i) All activities or items listed in the notification of the Government of India in the Department of Economic Affairs (Infrastructure Section) number 13/06/2009-INF dt. 27/03/2012, excluding private hospitals, private educational institutions and private hotels; the word public purpose in the new act means - Public purpose means the activities specified under sub section (1) of section 2,; the word "Infrastructure Project" means and shall include any one or more of the items specified in Clause(B) of sub section(1) of Section 2 of the new Act. Accordingly it was submitted that the RFCTLARR Act was applicable to the lands forcefully compulsorily acquired for public purpose and development of highway falls under infrastructure project of public purpose. Hence, first by order of removal of difficulties and then by virtue of Section 2 of the RFCTLARR Act makes it amply clear that provisions of RFCTLARR Act, 2013....
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.... its return of income on 30/11/2015 as he was waiting for the clarification from the Income Tax Department wherein the subject of exemption from Income Tax on the compensation received on commercial land might get clear and the clarification from the CBDT came vide Circular No. 36/2016 dt. 25/10/2016 which read as under: Circular No. 36/2016 Government of India Ministry of Finance Department of Revenue Central Board of Direct Taxes ITA.II division, North Block, New Delhi, the 25th of October, 2016 Subject: Taxability of the compensation received by the land owners for the land acquired under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 ('RFCTLAAR Act')-reg.- Under the existing provisions of the income-tax Act, 1961 ('the Act'), an agricultural land which is not situated in specified urban area, is not regarded as a capital asset. Hence, capital gains arising from the transfer (including compulsory acquisition) of such agricultural land is not taxable. Finance (No. 2) Act, 2004 inserted section 10(37) in the Act from 01.04.2005 to provide specific exemption to the....
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....on'ble Rajasthan High Court in the case of Gopa Ram Vs. Union of India & Ors. (supra) referred by the Ld. CIT(A), observed as under: However, the Central Government vide Ordinance (N0.9 of 2014) dated 31.12.2014 has substituted Sub-section (3) of Section 105 of the Acquisition Act of 2013, which reads as under:- "(3) The provisions of this Act relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule shall apply to the enactments relating to land acquisition specified in the Fourth Schedule with effect from 1st January 2015." The provisions of Ordinance (No.9 of 2014) dated 31.12.2014 were continued further vide Ordinance (N0.4 of 2015) dated 03.04.2015 and Second Ordinance dated 30.05.2015 (N0.5 of 2015) and the same were valid up to 31.08.2015. Subsequently, the Department of Land Resources, Ministry of Rural Development, Government of India issued the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Removal of Difficulties) Order....
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....t of the circular, if found entitled, irrespective of the fact that it was not produced before the authorities below or was issued by the Central Board of Direct Taxes subsequent to the decision given by the Tribunal, Circular No. 329. Dated February 22, 1982, issued by the Board does not override the provisions of the Act. It is clarificatory in nature. It is a benevolent circular issued in favour of the assessee providing administrative relief and says that if the process involved is not merely conversion of standing trees into firewood but also manufacture of new saleable commodities, the benefit of deduction under section 80J and 80HH would be available." 10.4 In the present case also the CBDT vide Circular No. 36/2016 dt. 25/10/2016 clarified that the compensation received in respect of award or agreement which has been exempt from levy of Income Tax vide section 96 of the RFCTLARR Act shall also not be taxable under the provisions of Income Tax Act, 1961 even if there is no specific provisions of exemption for such compensation in the Income Tax Act, 1961. In the said Circular it is also clarified that no distinction had been made towards compensation received for compulso....