TaxTMI 
TaxTMI 
TaxTMI 
2025 (6) TMI 1449
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....ot justified. 2. The appellant reserves the right to amend, modify or add any of the ground/s of appeal." 2. At the threshold, we may herein observe that the present appeal involves a delay of 166 days. After considering the application filed by the Ld. Authorized Representative (for short 'AR') seeking condonation of delay of 166 days involved in filing of the present appeal a/w. her "affidavit" dated 19.06.2024, we are of the view that as there are bonafide reasons leading to the impugned delay involved in filing of the present appeal, therefore, the same merits to be condoned. 3. Succinctly stated, the assesse had e-filed her return of income for A.Y.2017-18 on 27.02.2018 declaring an income of Rs .4,02,050/-. Subsequently, the case of the assesse was selected for scrutiny assessment u/s. 143(2) of the Act for verifying two issues viz. (i) claim of large exempt income; and (ii) capital gains/loss on sale of property. 4. During the course of assessment proceedings, the A.O observed that the assessee had received compensation of Rs. 72,79,552/- on acquisition of two pieces of lands at Village: Bhatagaon, Tehsil : Kurud, District : Dhamtari by the State government under "Right....
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....fter considering the merits of the case vide an ex-parte order, observing as under: "6. Even on merits, a decision based on material available on record, would go against appellant. 6.1 Ld. JAO has opined on the issues as follows in assessment order, relevant extract of the assessment order is reproduced hereunder for ease of reference: "6. As per sub-section 42A of section 2 of the Income tax Act, 1961 "short-term capital asset means a capital asset held by an assessee for not more than thirty-six months immediately preceding the date of its transfer". In the present case of the assessee the land bearing khasra no. 1088/3 was purchased on date 10-09-2014 and transferred on 12-07-2016 i.e after a period of 22 months 2 days, similarly the other land bearing khasra no. 1088/2 was purchased on date 24-07-2014 and transferred on 12-07-2016 Le after a period of 23 months 18 days. Thus, from the above it is clear that none of the two pieces of land had been held by the assessee, prior to its transfer, beyond the period of 36 months hence the gain arising out of the above transfer(acquisition by the state govt.) shall be Short Term Capital Gain arising from the transfer of a short-t....
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....laiming under any such award or agreement shall be liable to pay any fee for a copy of the same. SECTION 46 of RFCTLAAR, 2013 46. Provisions relating to rehabilitation and resettlement to apply in case of certain persons other than specified persons.-(1) Where 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, for which the payment of Rehabilitation and Resettlement Costs under this Act is required, he shall file an application with the District Collector notifying him of- (a) intent to purchase; (b) purpose for which such purchase is being made; (c) particulars of lands to be purchased. (2) It shall be the duty of the Collector to refer the matter to the Commissioner for the satisfaction of all relevant provisions under this Act related to rehabilitation and resettlement. (3) Based upon the Rehabilitation and Resettlement Scheme approved by the Commissioner as per the provisions of this Act, the Collector shall pass individual awards covering Rehabilitation and Resettl....
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....fied urban limit, subject to fulfilment of certain conditions. Therefore, compensation received from compulsory acquisition of an agricultural land is not taxable under the Act (subject to fulfilment of certain conditions for specified urban land). 2. The RFCTLARR Act which came into effect from 1st January, 2014, in section 96, inter alia provides that income-tax shall not be levied on any award or agreement made (except those made under section 46) under the RFCTLARR Act. Therefore, compensation received for compulsory acquisition of land under the RFCTLARR Act (except those made under section 46 of RFCTLARR Act), is exempted from the levy of income-tax. 3. As no distinction has been made between compensation received for compulsory acquisition of agricultural land and non-agricultural land in the matter of providing exemption from income-tax under the RFCTLARR Act, the exemption provided under section 96 of the RFCTLARR Act is wider in scope than the tax-exemption provided under the existing provisions of Income-tax Act, 1961. This has created uncertainty in the matter of taxability of compensation received on compulsory acquisition of land, especially those relating to acqu....
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....compensation or consideration enhanced or further enhanced by any court, Tribunal or other authority; ......................... 55. Clauses (37) and (38) inserted by the Finance (No. 2) Act, 2004, w.e.f. 1-4-2005. For relevant case laws and Circular No. 36/2016, dated 25-10-2016 [Taxability of compensation received by land owners for land acquired under Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR ACT)J, see Taxmann's Master Guide to Income- tax Act. It is averred that the transaction is exempt under section 10(37) of IT Act, 1961 i.e., land is agricultural in nature. Against the same a definitive conclusion has been reached by Ld.JAO in para 5 of the assessment order regarding the nature of land parcels sold. Ld.JAO gives finding that '5. Here it is pertinent to mention that from the purchase deed of the land and the Order of the SDO, Kurud (Competent authority for land acquisition by the Govt.) available on record it is seen that both the pieces of land has been acquired by the assessee from poor farmers through Power of Attorney holder Sh. Madhusudan Kedia who happens to be the husband of the a....
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....ourt in CIT v. Raja Benoy Kumar Sahas Roy [1957] 32 ITR 466 had held that 'agriculture' in its root sense mean 'agar', a field and 'culture', i.e. cultivation of a field. 'Agriculture' implies expenditure of human skills and labour upon land. After exhaustively discussing the various cases dealing with the subject, the Apex Court held that agriculture Involved "basic operations", such as tilling of land, sowing of seeds, planting etc. and "subsequent operations", such as weeding. tending, pruning, cutting, harvesting and rendering the produce fit for market. 16. Further, the Hon'ble Gujarat High Court in Siddharth J. Desai (supra) had laid down 13 tests to determine whether a particular land is agricultural land or nor which are as under:- "(1) Whether the land was classified in the revenue records as agricultural land whether it was subject to the payment of land revenue? (2) Whether the land was actually or ordinarily used for agricultural purposes at or about the relevant time? (3) Whether such user of the land was for a long period or whether it was of a temporary character or by way of a stopgap arrangement" (4) Whether the income ....
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....ra) had laid down as under:- "Whether a piece of land is agricultural land or not is essentially a question of fact. Several tests have been evolved in decisions of the Supreme Court and the High Courts, but all of them are more in the nature of guidelines. The question has to be answered in each case, having regard to the facts and circumstances of that case. There may be factors both for or against a particular point of view. The court has to answer the question on a consideration of all of them a process of evaluation. The inference has to be drawn on a cumulative consideration of all the relevant facts." 19. The Bombay High Court in V.A. Trivedi (supra) ie. the decision relied upon by the Assessing Officer, after considering the facts of the case, it was held that to ascertain the true character and nature of the land, it must be seen whether it has been put to use for agricultural purposes for a reasonable span of time, prior to the relevant date and further whether on the relevant date the land was intended to be put to use for agricultural purposes for a reasonable span of time in the future. 20. Following the judicial proposition laid down by the Supreme Court and var....
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....e past or it continues to be assessed in the land revenue records as agricultural land is not decisive to determine the nature of land being agricultural land. Where the land has not been put to use for agricultural purposes for reasonable span of time prior to the date of its transfer, the land in question cannot be held to be agricultural land. The onus was upon the assessee to establish its case of having cultivated the land in recent past and in the absence of assessee having discharged its onus and merely because the land is recorded as agricultural land in the revenue records, does not establish the case of assessee." Nothing is on record qua above to establish that the land in question was indeed agricultural land. Thus, Ld.JAO has correctly treated the land as non-agricultural. Nothing has been bought on record against findings of Ld.JAO and based on material available on record it is held that said land parcels were non-agricultural in nature. Next contention of the appellant is with regards the receipt being LTCG or STCG. Ld.JAO has given elaborate calculation with dates and nothing has been bought on record on behalf of appellant to dispute the same. The action of Ld....
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....e provisions of this Act shall not apply to the enactments relating to land acquisition specified in the Fourth Schedule. (2) Subject to sub-section (2) of section 106, the Central Government may, by notification, omit or add to any of the enactments specified in the Fourth Schedule. (3) The Central Government shall, by notification, within one year from the date of commencement of this Act, direct that any of the provisions of this Act relating to the determination of compensation in accordance with the First Schedule and rehabilitation and resettlement specified in the Second and Third Schedules, being beneficial to the affected families, shall apply to the cases of land acquisition under the enactments specified in the Fourth Schedule or shall apply with such exceptions or modifications that do not reduce the compensation or dilute the provisions of this Act relating to compensation or rehabilitation and resettlement as may be specified in the notification, as the case may be. (4) A copy of every notification proposed to be issued under sub-section (3), shall be laid in draft before each House of Parliament, while it is in session, for a total period of thirty days which may....
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....ompensation or dilute the provisions of this Act relating to compensation or rehabilitation and resettlement as may be specified in the notification, as the case may be. In sum and substance, the only exception to the applicability of the enactments relating to the land acquisitions under the enactments specified in the "Fourth Schedule" can be traced in sub-section (3) to Section 105 of the RFCTLARR Act, 2013), which too had been made dependent upon the issuance of a notification by the Central Government within one year from the date of commencement of this Act, but the same applies only in the context of the determination of compensation in accordance with First Schedule and rehabilitation and resettlement specified in accordance with Second and Third Schedule. 15. In our considered view, the exception carved out in sub-section (1) of Section 105 of the RFCTLARR Act, 2013 has a limited applicability, i.e., concerning the determination of the compensation and rehabilitation and resettlement under the RFCTLARR Act, 2013. By no stretch of the imagination, the same can be applied to the remaining provisions of the RFCTLARR Act, 2013. Our conviction above is fortified by the OM dat....
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....2016 dated 25.10.2016 of CBDT." (emphasis supplied by us) 16. Based on our observations above, it is clear beyond doubt and supported by the OM dated 06.06.2019 of the CBDT, New Delhi, that no provisions of the RFTCLARR Act, 2013, except for provisions relating- to determination of the compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule would apply to the enactments relating to land acquisition specified in the "Fourth Schedule." Also, as spelled out in OM dated 06.06.2019 (supra), the benefit of Section 96 of the RFCTLARR Act, 2013, exempting income tax on the award, would not be applicable for cases in which land acquisition is undertaken as per the enactments specified in the "Fourth Schedule" to the said Act. 17. Admittedly, it is an undisputed fact that the lands of the assessee had been acquired under the NHAI Act, 1956. The aforesaid factual position though undisputed and can safely be gathered from a perusal of the Notification dated 13th June 2016 as per which lands of the assessee had been acquired under the NHAI Act, 1956 (1956 o....
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....rder mentioned above, the provisions of the RFCTLARR Act, 2013 relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule, and infrastructure amenities in accordance with the Third Schedule applied to all the cases of land acquisition specified in "Fourth Schedule". For the sake of clarity, the aforesaid S.O. 2368 (E) dated 28.08.2015 is culled out as under: MINISTRY OF RURAL DEVELOPMENT ORDER New Delhi, the 28th August, 2015 S.O. 2368(E),-Whereas, the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (30 of 2013) (hereinafter referred to as the RFCTLARR Act) came into effect from 1st January, 2014; And whereas, sub-section (3) of Section 105 of the RFCTLARR Act provided for issuing of notification to make the provisions of the Act relating to the determination of the compensation, rehabilitation and resettlement applicable to cases of land acquisition under the enactments specified in the Fourth Schedule to the RFCTLARR Act; And whereas, the notification envisaged under sub-section (3) of Section 105 of the RFCTLARR A....
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....13), the Central Government hereby makes the following Order to remove the aforesaid difficulties, namely :- 1. (1) This Order may be called the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement (Removal of Difficulties) Order, 2015. (2) It shall come into force with effect from the 1st day of September, 2015. 2. The provisions of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, relating to the determination of compensation in accordance with the First Schedule, rehabilitation and resettlement in accordance with the Second Schedule and infrastructure amenities in accordance with the Third Schedule shall apply to all cases of land acquisition under the enactments specified in the Fourth Schedule to the said Act. [F. No. 13011/01/2014-LRD] K. P. KRISHNAN, Addl. Secy. We are unable to comprehend how the order mentioned above, i.e., S.O 2368 (E) (supra), would support the claim of the assessee company that the award received by it on the acquisition of its lands under the NHAI Act, 1956 was not taxable under the RFCTLARR Act, 2013. As observed by us hereinabove, the....
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....01.04.2005 to provide specific exemption to the capital gains arising to an Individual or a HUF from compulsory acquisition of an agricultural land situated in specified urban limit, subject to fulfilment of certain conditions. Therefore, compensation received from compulsory acquisition of an agricultural land is not taxable under the Act (subject to fulfilment of certain conditions for specified urban land). 2. The RFCTLARR Act which came into effect from 1st January, 2014, in section 96, inter alia provides that income-tax shall not be levied on any award or agreement made (except those made under section 46) under the RFCTLARR Act. Therefore, compensation received for compulsory acquisition of land under the RFCTLARR Act (except those made under section 46 of RFCTLARR Act), is exempted from the levy of income-tax. 3. As no distinction has been made between compensation received for compulsory acquisition of agricultural land and non-agricultural land in the matter of providing exemption from income-tax under the RFCTLARR Act, the exemption provided under section 96 of the RFCTLARR Act is wider in scope than the tax-exemption provided under the existing provisions of Income-....
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....he acquisition of its lands under enactments relating to land acquisition specified in the "Fourth Schedule" would be eligible for tax exemption u/s. 96 of the RFCTLARR Act, 2013. All that the CBDT Circular No.36/2016 (supra) clarifies is that the compensation received on compulsory acquisition of agricultural land and non-agricultural land under the RFCTLARR Act, 2013 would be similarly placed, AND that if the compensation received on compulsory acquisition of land is exempt u/s. 96 of the RFCTLARR Act, 2013, the same would not be taxable even if there is no specific exemption provision for such compensation in the Income Tax Act, 1961. Once again, we are unable to comprehend how the CBDT Circular No. 36/2016 (supra), which is absolutely in a different context /subject matter, would advance the claim of the assessee company that the compensation received on the acquisition of its lands under the NHAI Act, 1956 would be exempt u/s.96 of the RFCTLARR Act, 2013. 24. We shall now deal with the judicial pronouncements/orders pressed into service by the Ld. AR, in his attempt to prove that the compensation received by the assessee company on the acquisition of its lands under the NHAI....
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....d. 28. As the facts and issues involved in the present appeal are distinguishable compared to those involved in the case mentioned above, the same would not carry the case of the assesse company any further. (C) The ACIT Vs. SV Global Mill Ltd., ITA No.2684/CHNY/2019 dated 28.01.2021, ITAT-Chennai 29. The issue before the ITAT was whether interest on enhanced compensation was taxable or exempt u/s 96 of the RFCTLARR Act, 2013. Referring to Section 3(i) of the RFCTLARR Act, 2013, it was observed by the Tribunal that interest on enhanced compensation would qualify for exemption u/s 96 of the RFCTLARR Act, 2013. As the issue before us, i.e., as to whether or not the exemption u/s.96 of the RFCTLARR Act, 2013 is available for the compensation received on the acquisition of lands under the enactments specified in "Fourth Schedule," was neither raised nor looked into by the Tribunal in the case mentioned above; therefore, the same being distinguishable on facts would not further the issue involved in the case of the assesse company. (D) Shri Satish Kumar, Sangrur Vs. ITO, Chandigarh, ITA Nos. 1182 & 1183/Chd/2019 dated 31.08.2021 30. The Tribunal observed that the CBDT Circular....
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....n compulsory acquisition of its lands under the 13 enactments specified in the "Fourth Schedule" had not been looked into by the Tribunal in the case above, therefore, the same being distinguishable on facts would not assist the case of the assessee before us. (F) DCIT- 27(1) Vs. M/s. Ganga Developers, ITA No.2328/Mum/2021 dated 12.10.2022 35. The issue before the Tribunal was whether compensation received by the assessee under Section 11 of the Land Acquisition Act, 1894 and not an award under the RFCTLARR Act, 2013, would be eligible for tax exemption u/s. 96 of RFCTLARR Act, 2013. The Tribunal observed that as per Section 24 of RFCTLARR Act, 2013, when no award u/s.11 of the Land Acquisition Act, 1894 had been made, the provisions of the new act relating to the determination of the compensation shall apply. As the award in the case before them was made on 05.08.2016; therefore, it was observed by the Tribunal that the provisions of the new Act would apply. The Tribunal further observed that as per Section 96 of RFCTLARR Act, 2013, the compensation the assesse received on the acquisition of its land was not chargeable to income tax. 36. Once again, as the issue involved in ....