TaxTMI 
TaxTMI 
2023 (8) TMI 1617
X X X X Extracts X X X X
X X X X Extracts X X X X
.... The Ld. CIT(A) NFAC has erred on facts & law in rejecting the claim of exemption of the assessee from Long Term Capital Gains, arising from Compulsory Acquisition of Land under National Highway Act, 1956, by relying on Section 96 of RFCTLARR Act, 2013, and clarificatory Circular No.36/2016 (F.No.225/88/2016- ITA.II), Dated 25-10-2016. 3. The Ld. CIT(A) NFAC has erred on facts & law in rejecting the claim of exemption of the assessee from Long Term Capital Gains, arising from Compulsory Acquisition of Land by relying on Circular No.36/2016 (F.NO.225/88/2016-ITA.II), Dated 25-10-2016 while recording the finding that the case of the assessee is covered by order of the Agra Bench of the Hon'ble ITAT in the case of Jagdish Arora in which it has been held that the benefit of section 96 of RFCTLARR Act, 2013 cannot be given to the appellant. 4. The Ld.CIT(A)NFAC has erred on facts and law in rejecting the claim of exemption of the assessee from Long Term Capital Gains, arising from Compulsory Acquisition of Land under National Highway Act, 1956, while relying on the order of Agra Bench of the Hon'ble ITAT in the case of Jagdish Arora while denying the opportunity of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....) has erred in law and on facts in confirming addition of Rs. 87,36,536/- on account of capital gain by upholding that the provisions of section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act, 2013) are not applicable to the compensation received in respect of land acquired under the National Highway Act, 1956. 3. That the learned CIT(A) has erred in law and on facts by upholding the addition of Rs. 87,36,536/- made under the head capital gain on account of compensation received in respect of land acquired under the National Highway Act, 1956 exempt from tax under the RFCTLARR Act, 2013 as per interpretation of law made by the Hon'ble ITAT, Chandigarh Bench, Chandigarh and the Circular issued by the Board No. 36/2016 dated 25.10.2016. 4. That the appellant craves to add, amend or alter any ground of appeal on or before the hearing." 4. The sole issue, in both the appeal pertains to rejection of the claim of exemption of the assessee from Long Term Capital Gains, arising from Compulsory Acquisition of Land under National Highway Act, 1956, by relying on Section 96 of RFCTLARR....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e above, the AO concluded that the appellant is not eligible for claiming exemption from income tax on the basis of Circular No.36/2016 of the CBDT and u/s 96 of the RFCTLAAR Act and the amount of compensation received by the appellant on acquisition of her residential land is taxable under the provisions of the Income Tax Act, 1961. The AO also observed that notification for acquisition of land was issued in this case on 04.02.2014 and Award was given on 07.11.2014. The Land Acquisition Collector has clearly held in his order that proprietary rights of the acquired land shall vest in Central Govt, with effect from 07.11.2014. However, Notification regarding amendment in section 105 of the RFTCLAAR Act was issued on 31.12.2014, which was applicable from 01.01.2015. Hence, even otherwise, the notification is not applicable in this case. He further discussed that the facts of the instant appeal are similar to the facts of the Income-Tax Appellate Tribunal in the case of Jagdish Arora, Agra v. ITO (supra). The case laws relied upon by the appellant are distinguishable on facts. It can be seen that the appellant is not eligible for claiming exemption from income tax on the basis of Cir....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of land. Therefore, in our opinion, the cut off date for the purpose of determining its taxability is the date when the assessee was entitled to receive the compensation and not the date when it was actually received by the assessee. In the light of the above we do not find any merit in o he assessee. Accordingly, the same deserves to be dismissed" 20. Respectfully following the decision in the matter of Sh. Krishna Kumar Sharma, we are left with no other option but to dismiss the appeal of the assessee." 7. The CIT (A) also relied on the Hon'ble ITAT Agra Bench in the case of Krishna Kumar Sharma v. DCIT, Mathura in ITA No. 173/Agra/2019 dated 10.03.20121 where relevant paras 5 & 6 is as under: "5. We have heard the rival submissions and have gone through the material available on record. It is clear that the land in question was acquired by National Highway Authority of India on 05.02.2013 under the National Highway Authority Act, 1856. When the award was passed acquiring the land, the Right to Fair Compensation and Transparency in Land Acquisition Rehabilitation and Resettlement Act, 2013 (RFCTAAR Act] came into force with effect from 1st January, 2014 and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....me of Taking possession of the land, by reason of the acquisition injuriously affecting his other immovable property in any manner, or his earnings; (d) if, in consequences of the acquisition of the land, the person interested is compelled to change his residence or place of business, the reasonable expenses, if any, incidental to such change." 6. From the perusal of aforesaid provision, it is clear that the award was made in Section 3G of the National Highways Act on 05.02.2013 and compensation was given as per Form 16A on 01.01.2014. Hence, we do not find applicability of RFCTAAR Act to the transaction under consideration before us. We are of the opinion that even section 24 is not applicable as in the present case award was passed on 05.02.2013,which is a date prior to the date when RFCTAAR Act was made applicable. Therefore, its provisions are not applicable. Further as per section 5 of the IT Act, income of assessee (compensation received by assessee] is required to be taxed when the said compensation have accrued in favour of the assessee or deemed to have been accrued. Undisputedly, the assessee was entitled to receive the compensation when the award was pa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ong Term Capital Gains, arising from Compulsory Acquisition of Land under National Highway Act, 1956, while ignoring the settled principle of law as laid down by Apex Court that where there are two opinions of Court on one issue, the opinion in favour of the assessee should be followed. The AR argued that Ld. CIT(A) NFAC has erred on facts and law in rejecting the claim of exemption of the assessee from Long Term Capital Gains, arising from Compulsory Acquisition of Land under National Highway Act, 1956, as the CIT(A) NFAC has failed to follow the principle of juridical consistency as laid down by Apex Court by ignoring the order of CIT(A) NFAC in the case of Jaswinder Kaur Sahni of Bathinda on identical facts. In support, he filed a written synopsis which reads as under: "1. The residential land measuring 120.51 Sq yards of the assessee was acquired under National Highway Act, 1956 vide notification dated 04.02.2014/award has been given on 07.11.2014 [para 5.3.1 of the order of the CIT(A) and para 6 on page 6 of order of the AO] and the assessee received the following compensation through bank on 19.05.2015. Compensation 21,51,253/- 30% solatium 6,45....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hways Act, 1956 has been stated in para 4.6 (iii) as under: - "(a) All cases of Land Acquisition where the Awards had not been announced under section 3G of the NH Act till 31.12.2014 or where such awards had been announced but compensation had not been paid in respect of majority of the land holdings under acquisition as on 31.12.2014, the compensation would be payable in accordance with the First Schedule of the RFCTLARR Act, 2013." d) The reliance was placed on the order of Chandigarh Bench of the ITAT in the case of Satish Kumar Vs. ITO in ITA NO. 1182/Chd/2019 [PB 22- 42] in which the compensation received by the assessee on 05.11.2014 and 23.11.2015 under National Highway Act on compulsory acquisition of land by NHAI has been held to be exempt u/s 96 of the RFCTLARR Act vide circular no 36/2016 dt. 25.10.2016. e) The case of the assessee is covered by the orders of Rajasthan High court in the case of Gopa Ram Vs. UOi dt. 22.01.2018 [followed by Chandigarh bench of the ITAT in the case of Satish Kumar] in which it has held that the provisions of the RFCTLARR Act, 2013 are applicable to National Highway Act, 1956 f) Hon'ble Supreme court in t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s clear that benefit of the RFCTLAAR Act, 2013 has been extended to land acquired under the National Highways Act, 1956 in the absence of notification the benefit under section 96 of the RFCTLAAR Act, 2013, cannot be extended to the assessee. (c) Further, it was held that, though cheques were received on January 27, 2015, the changeability of the come is required to be determined in accordance with sections 4 and 5 of the Income-tax Act. (d) Further, reliance in the case of Krishna Kumar Sharma wherein it has been held as under reproduced at page 21 of the Commissioner of Income-tax (Appeals) order : "6. From the perusal of aforesaid provision, the award made in section 3G of the National Highways Act on February 5, 2013 and compensation was given as per form 16A on January 1, 2014. Hence, we do not find applicability of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 to the transaction under consideration before us. We are of the opinion that even section 24 is not applicable as in the present case award was passed on December 7, 2013 which is a date prior to the date when the RFCTAAR Act was made applicable. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... with the order of the Agra Bench the Income-tax Appellate Tribunal in the case of the Jagdish Arora v. ITO and also did not take into cognisance detailed written submissions filed before the Commissioner of Income-tax (Appeals), National Faceless Appeal Centre on January 16, 2023 in which the attention of Commissioner of Income-tax (Appeals), National Faceless Appeal Centre was drawn to the order of Jaswinder Kaur Sahni on identical facts in favour of the assessee Commissioner of Income-tax (Appeals), National Faceless Appeal Centre has relied on the letter dated December 28, 2017 of the Ministry of Road Transport Highways and also on the judgment of court in the case of Union of India v. Tarsem Singh dated September 19, 2019 and also on the order of the High Court in the case of Raghavan Nair v. Asst. CIT order of Agra Bench in the case of distinguishable on facts. (a) The perusal of the order of Krishna Kumar Sharma proves that the award in the case before the hon'ble Bench was made on February 5, 2013 and the compensation was received on January 1, 2014 and since both dates falls prior to the date of application the RFCTLAAR Act, i. e., January 1, 2015 the case Krishna Kumar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....edule of the RFCTLARR Act, 2013 although the hon'ble Bench was pronounced on March 14, 2021 and above said letter is dated December 28, 2017. (c) Further regarding the chargeability of income as per provisions of sections 4 and 5 of the Act, it is stated that compensation on of compulsory acquisition of land has received during the financial year 2015-16 (i. e., May 9, 2015 the same is taxable under section 45(5)(a) of the Act. In the previous year in which such compensation has been first received and the year of chargeabiliti is never the issue and the same has never been pointed out by the Assessing Officer. (d) Detailed submissions has already been filed on January 16, 2023 but these have not been taken into cognisance by the Commissioner of Income-tax (Appeals). 9. We have heard both the sides, perused the material on record, impugned order and case laws cited before us. Admittedly, in this case, the notification for compulsory acquisition of land was issued on 04.02.2014 and Award was given on 07.11.2014. The Land Acquisition Collector has clearly held in his order that proprietary rights of the acquired land shall vest in Central Govt. with effect from 07.11.2014. H....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he order of Agra Bench in the case of Jagdish Arora- (Supra)based on Krishan Kumar Sharma is distinguishable on facts as in that case the claim of exemption of the award was made before the Hon'ble Bench on05.02.2013 and the compensation was received on 01.01.2014 and since both the dates falls prior to the date of application of RFCTLAAR Act. i.e. 01.01.2015 and hence the case of Krishan Kumar Sharma was so decided on different facts was followed bv the Hon'ble Agra Bench in the case of Jagdish Arora cannot be applied to the case of assessee because in the case of the assessee award has been given on07.11.2014 and the compensation has been received on 19.05.2015.Further, in the case of Jagdish Arora (Supra), the important facts were neither brought to the knowledge nor considered by the Agra Bench of the ITAT that Letter of Ministry of transports Highways dt. 28.12.2017 in which it has been stated that all cases of land acquisition where the Awards had not been announced under section 3G of the NHAI Act till 31.12.2014 or where such awards had been announced but compensation had not been paid in respect of majority of the land holdings under acquisition as on 31.12.2014, the compe....