TaxTMI 
TaxTMI 
2022 (7) TMI 256
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....the case are that the assessee had filed his return of income declaring income of Rs. 3,55,32,270/- under Long Term Capital Gain and agricultural income of Rs. 35,000/- after claiming deduction of Rs. 1,28,80,000/- under Chapter VIA of the Income Tax Act, 1961 (hereinafter called 'the Act'). During the year the assessee derived income from house property, Long Term Capital Gain, interest income, manufacturing of egg trays and purchase and sale of food grains. The assessee's case was selected for scrutiny through CASS under 'Limited Scrutiny'. During the course of assessment proceedings, it was noticed by the Assessing Officer (Assessing Officer) that the land including factory building of the assessee was acquired by the State Govt.....
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....nt of compensation. The Assessing Officer, however, did not agree with the submissions of the assessee and went on to hold that the amount of solatium received i.e. Rs. 1,25,73,139/- was to be treated as income of the assessee under the head Long Term Capital Gains and capital gains was worked out at Rs. 5,22,85,716/- as per the following computation:- Full value consideration (Excluding Solatium & Interest) 5,44,83,623/- Less Cost of acquisition (as per Index cost) 27,69,678/- Less Cost of Improvement 14,46,368/- Long Term Capital Gain 5,02,67,577/- Less exemption U/s 54F 50,00,000/- Less exemption U/s 54EC 55,55,000/- Long Term Capital Gain 3,97,12,577/ Add solatium as per para 2.3 above 1,2....
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....to treat the entire compensation including solatium as exempt. 2.5 Against this order of the Ld. First Appellate Authority, the Department has now approached this Tribunal and has raised the following grounds of appeal:- 1. Whether on the facts & in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs. 1,25,73,139/- under the head Long Term Capital Gain on account of solatium. 2. Whether on the facts & in the circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of Rs.41,23,990/- on account of interest received on compensation in view of provision of section 56 of the Income Tax Act, 1961. 3. Whether on the facts & in the circumstances of the case, Ld. CI....
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.... on interest received, the Ld. Sr. DR submitted that in terms of section 56(2) (viii) , the interest was taxable but the assessee can claim exemption on 50% of the interest amount in terms of section 57(iv) of the Act. 4.0 In response, the Ld. AR submitted that the Land was compulsorily acquired by Government situated at National Highway No. 64 on a stretch of land from Km 50.700 to Km 209.50 on the Patiala - Sangrur - Bhatinda section. Our attention was drawn to the Award dated 15.01.2014. Our attention was also drawn to a copy of the letter by SDE wherein price was fixed vide meeting held on 26.12.2013. It was submitted that the amount of Award was calculated on presentation of this copy of letter. It was submitted that in terms of acq....
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.... Ld. AR submitted that, thus, in view of the factual position, the assessee's case fell squarely with the provisions of RFCTLARR Act and in view of the CBDT Circular, as afore mentioned, the Ld. CIT(A) had rightly deleted the addition made by the Assessing Officer. 5.0 We have heard the rival submissions and have also perused the material on record. In this case the facts are not in dispute. From the records, it is apparent that the impugned transaction is covered under RFCTLARR Act. Even the Assessing Officer has not disputed this position that the land for which compensation has been received had been acquired by the National Highway Authority of India (NHAI) and it is also a matter of record and it also remains undisputed that NHAI is....