TaxTMI 
TaxTMI 
2023 (11) TMI 276
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....;, therefore, enhanced the gross total income made by the CPC was without jurisdiction which is confirmed by the Ld. CIT(A), as such his finding is completely arbitrary, unjustified and illegal. 3. For that on the facts of the case, the Ld. CIT(A) has dittoed the order of the A.O.(CPC) and confirming the addition of Rs. 41,51,828/- as intra head adjustment on capital gain, which is completely arbitrary, unjustified and illegal. 4. For that on the facts of the case the Ld. CIT(A) was wrong in confirming the A.O.'s Order in making the intimation u/s. 143(1) wherein the business income has been computed Rs. 41,16,070/- in place of (Loss) Rs. 35,760/- which is completely arbitrary unjustified and illegal. 5. For that on the facts of the case, the A.O. (CPC) was wrong in not considering the facts that the assessee received the compensation from Govt. on acquisition of agricultural land at Rural Area in India is not considered a capital asset, so, any gains from its compensation is not taxable under head capital gains, therefore, the addition of Rs. 41,51,828/- which is confirmed by the Ld. CIT(A) is completely arbitrary unjustified and illegal. 6.....
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....Further reliance was placed on the decision of the coordinate bench of the ITAT Mumbai in the case of DCIT vs. M/s. Ganga Developers in ITA No. 2328/Mum/2021; Assessment Year 2017-18; order dt. 12/10/2022, wherein the assessee is a partnership firm. On the other hand the ld. D/R, supported the order of both the lower authorities. 6. We have heard rival contentions and perused the material placed before us. The sole grievance of the assessee is that the ld. CIT(A) has erred in not providing exemption of Rs. 41,51,828/- as gains arising on account of acquisition of agricultural land by the Central Government. We notice that the assessee held land in rural area located at Dist. Purnea in Bihar. Compensation of Rs. 42,62,880/- was awarded by the central government towards acquisition of assessee's land and after deduction of tax at source net amount of Rs. 38,40,192/- was received by the assessee which was duly deposited in the State Bank of India on 12/11/2016. Though the compensation received is Rs. 42,66,880/- but the ld. Assessing Officer has mentioned the amount at Rs. 41,16,069/-. We are here to deal with the issue that whether the alleged sum is exempt from tax. The ld. Couns....
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....ct of award or agreement which has been exempted 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 provision of exemption for such compensation in the Income-tax Act, 1961. 4. The above may be brought to the notice of all concerned. 5. Hindi version of the order shall follow." 8. Further before us ld. Counsel for the assessee, referring to the compensation advice bearing number 245/2016-17 has contended that, the said land as a rural agricultural land. In the above CBDT Circular in para 2, reference is made to Section 96 and 46 of the RFCTLAAR Act. For adjudication of the issue we will go through these two sections also:- "96. Exemption from income-tax, stamp duty and fees.-No income tax or stamp duty shall be levied on any award or agreement made under this Act, except under section 46 and no person claiming under any such award or agreement shall be liable to pay any fee for a copy of the same. 46. Provisions relating to rehabilitation and resettlement to apply in case of certain persons other than specified persons.- (1) Wh....
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....ppropriate Government or controlled by the appropriate Government." 9. Now going through the above provisions, so far as the section 46 is concerned, the said section can come into operation only if any person other than a specified person is purchasing land through private negotiations for an area equal to or more than such limits, as may be notified by the appropriate Government, considering the relevant State, specific factors and circumstances. However, in the instant case, there is no private negotiation on the part of the assessee and it is purely a case where the rural agricultural land held by the assessee has been acquired by the central government and the compensation to the assessee has been given under the RFCTLAAR Act. Now going through Section 96 of the RFCTLAAR Act, the same provides exemption from income tax, stamp duty and fees on any award or agreement, made except those covered u/s 46 of the RFCTLAAR Act (which we have already held to be not applicable on the assessee). 10. Now after dealing with Section 96 of the RFCTLAAR Act, and going to the CBDT circular referred supra, we notice that no distinction has been made between the compensation received for co....