2024 (4) TMI 1109

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.... gains in respect of property to an extent of 76.41 cents acquired under the land acquisition act, which has been judicially settled that gains arising out of such compulsory acquisitions are not liable for taxation. The land was compulsorily acquired for Highways projects by The Land Acquisition Officer and District Revenue Officer, Tirupur by proceedings dated 27.11.2013. 3. On the facts and circumstances of the case, the first appellate authority is not justified in confirming the action of the AO in disallowing a sum of Rs. 1,21,91,007/- as excess indexed cast of acquisition claimed by the appellant. 4. On the facts and circumstances of the case, the first appellate authority is not justified in disallowing the cost of improvement made by the assessee to an extent of Rs. 22,84,468/- which has been claimed as a deduction in computing long term capital gains. 1.2 The assessee has raised additional grounds of appeal on 31.12.2023 which read as under: - 1. On the facts and circumstances of the case, the appellant has wrongly offered to tax a sum of Rs. 45,91,310/- on capital gains arising out of compulsory acquisition of urban land which is exempt u/s 96 of The Right to Fair....

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.... as against Rs. 187.12 Lacs as computed by the assessee. 2.2 The assessee also claimed cost of improvement for Rs. 22.84 Lacs on account of filling and leveling of the land in this year. However, upon perusal of Award order dated 27.11.2013 as passed by LAO & DRO, it was noted that as per GO (D) No.272 dated 13.11.2007, the aforesaid land was declared to be needed for public purpose. Further, LAO & DO issued acquisition notice on 21.12.2011. The Ld. AO noted that the assessee gave work order of Rs. 52.92 Lacs to M/s KPM Projects P. Ltd., Salem on 25.03.2013 and a work bill of Rs. 29.89 Lacs was raised by that party on 28.06.2013. The assessee made payment and deducted TDS. However, the work order as well as work bill did not contain exact location of land. The assessee would not have spent such a huge amount on developing the land to be acquired by the Government. The work order and work bill relate to work contract executed at some other place and not pertaining to the land sold. Therefore, the claim of improvement was rejected 2.3 The Ld. CIT(A) endorsed the stand of Ld. AO against which the assessee is in further appeal before us. Our findings and Adjudication 3. The additio....

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....through the RFCTLARR Act, 2013 had been notified with effect from 01.01.2014, the provisions with respect to compensation, rehabilitation and resettlement have come into force with effect from 27.09.2013 with respect to all Land Acquisitions Acts enacted by Central and State Legislatures. Therefore, the compensation received by the assessee form Tamil Nadu Government on 02.12.2013 under Tamil Nadu Highways Act, 2001 is not chargeable to tax as the same has been exempted u/s 96 of RFCTLARR Act which provide that no income tax or stamp duty shall be levied on any award or agreement made under this Act except u/s 46 and no person claiming under any such award or agreement shall be liable to pay any fee for a copy of the same. The Ld. AR thus submitted that benefit of RFCTLARR Act has to be extended to the assessee who got the compensation amount on 02.12.2013 even though the above act was notified w.e.f. 01.01.2014. The Ld. AR has sought distinction in the case law of Agra Bench of Tribunal in the case of Jagdish Arora vs. ITO (127 Taxmann.com 728) as referred to by Ld. Sr. DR. The Ld. AR has submitted that the restrictions prescribed in Sec. 105 of RFCTLARR Act, 2013 apply solely to ....

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.... The Tamil Nadu Highways Act, 2001 (Tamil Nadu Act 34 of 2002). This enactment has come into force on 01.01.2014. The provisions of Sec. 105-A came into challenge before Hon'ble High Court of Madras in The Caritas India (WP Nos.22448/2018 & ors. dated 03.07.2019). The Hon'ble Court, in concluding para-158, inter-alia, held that by enacting Sec. 105-A of the new Act, the State of Tamil Nadu could not have revived the three acts that had become repugnant as on 27.09.2013. 6. Consequently, Tamilnadu State Assembly has enacted Tamilnadu Land Acquisition Law (Revival of Operation, Amendment and Validation) Act, 2019 on 15.12.2019 in order to revive the operation of the Tamil Nadu Highways Act, 2001 which had ceased with effect from 27.09.2013 to exist due to enactment of RFCTLARR Act, 2013 as they were guided by Land Acquisition Act, 1894. As per Sec. 1(2) of TNLAL (ROAV) Act, 2019, aforementioned act has been given retrospective effect from 26.09.2013. As per Sec. 10 of TNLAL (ROAV) Act, 2019, compensation needs to be determined by the RFCTLARR Act, 2013 when the land is acquired under the Tamil Nadu Highways Act, 2001. Section 10 & Sec. 11 of TNLAL (ROAV) Act, 2019 provide as under: ....