TaxTMI 
TaxTMI 
2022 (12) TMI 114
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....pose of the appeal by hearing the ld. DR and perusing the material available on record. 3. The assessee raised six grounds of appeal challenging the action of CIT(A) in confirming the order of AO in denying exemption u/s. 54B of the Act and disallowance of improvement cost in the facts and circumstances of the case. 4. I note that according to the AO, the assessee is an individual and an agriculturist. The Government of Maharashtra acquired the land belonging to the assessee admeasuring 1H 21R and paid compensation to the assessee. The AO opined that as per 7/12 extract that the said land is barren land and situated within 8 K.M. from the Municipal area of Jalna. The AO treated the said land as non-agricultural land within the meaning....
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....ithin 8 K.M. from the Municipal area of Jalna, has population less than 10,000. The AO should have enquired independently from the concerned competent authority to find out whether the said property is within 8 K.M. from the Municipal area of Jalna has population less than 10,000. In this regard, I find the AO did not even ask the assessee to furnish the said details. On perusal of assessment order, I note that the AO simply noticing that the said land is barren land treated the same as non-agricultural land without any evidence in support of its claim. It is pertinent to note that a barren land could transform into fertile land provided irrigation facilities, therefore, I am unable to subscribe to the view of AO that the barren land is a n....
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.... of Hon'ble High Court of Bombay in the case of Balmukund Acharya reported in 310 ITR 310 (Bom). On careful reading of the said decision, I note that the Hon'ble High Court of Bombay was pleased to hold that the authorities under the Act are required to assist the assessee and ensure that only legitimate taxes due are collected, if any assessee, under a mistake, misconception or on not being properly instructed. I note that the assessee placed reliance on the said decision in favour of the fact that the assessee made wrong claim before the AO seeking deduction u/s. 54B of the Act. It is contended that the compensation given by the Government of Maharashtra for compulsory acquisition of assessee's land is actually non-taxable u/s. 10(37) of ....
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.... furnished at pages 4, 6 and 7 amply shows that the land belonging to the assessee which was compulsorily acquired by the Government of Maharashtra is a agricultural land, the assessee was into agricultural activity during the period of two years immediately preceding the date of transfer was being used agricultural purposes by the assessee. Further, the said compensation was received by the assessee on or after 01-04-2004. Therefore, going by the conditions contemplated in clause (i) to (iv) of sub-section (37) of section 10 of the Act the compensation received by the assessee for compulsory acquisition of his land by the Government of Maharashtra is not chargeable under the head "Capital Gains" arising from transfer of agricultural land, ....
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....ee to ensure that only legitimate taxes due are collected. Further, it is noted the purpose of assessment proceedings before the taxing authorities is to assess correctly tax liability, in accordance with law. In the present case, the assessee shown capital gain and claimed deduction u/s. 54B of the Act, in my opinion, is a wrong claim, denial of the same for violation of provisions u/s. 54B of the Act is misconceived. As noted earlier, the assessee fulfilled all the conditions contemplated in clause (i) to (iv) of sub-section (37) of section 10 of the Act, but however, ignorant of the same as entitled to claim compensation derived from the Government of Maharashtra of compulsory acquisition as non-taxable, offered the capital gains to tax ....