TaxTMI 
TaxTMI 
2026 (10) TMI 505
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....terest of 43,56,970 as taxable interest income 2) That the CIT(A) erred in sustaining the addition of Rs. 27,00,092 on account of Long Term Capital Gainsarising out of land acquisition, ignoring the fact that the award was announced on 07.11.2014 (prior to 31.12.2014), while the compensation was received in May 2015 (post 31.12.2014), a situation squarely covered by the decisions of the Hon'ble ITAT Amritsar in Sh. Ranjeet Singh vs. ITO, Word 1(1), Bothinda and M/s Ranjeet Poultry Farm vs. DCIT, Circle-1, Bathinda. 3) That the CIT(A) erred in sustaining the addition of 27,00,092 as Long-Term Capital Gains, disregarding CBDT Circular No. 36/2016, which expressly clarifies that compensation exempt under Section 96 of the RECTLARR Act is not taxable under the Income-tax Act, 1961, and further supported by the judgment of the ITAT Chandigarh Bench, Chandigarh. 4) That the CIT(A) erred in law and on facts in confirming the addition of Rs. 1,78,488 under Section 56(2)(viii) of the Income-tax Act, 1961 (ie. 50% of interest of 23,56,970) by wrongly treating it as interest income, whereas it formed part of compensation received under the Right to fair Compensa....
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....benefits contained in the First, Second and Third Schedules relating to determination of compensation, rehabilitation and resettlement, and not the exemption under Section 96, in consequence whereof the appellant was held ineligible for exemption and Circular No. 36/2016 dated 25-10-2016 was held inapplicable to his case. 7. The assessment was completed on a total income of Rs. 37.90 lakhs ( including an addition of Rs. 27 lakhs as LTCG u/s. 45(5)(a) of the Act plus an amount of Rs. 1.78 lakhs under head other source, being the chargeable interest portion received after deduction u/s. 57(iv) 8. The matter carried in first appeal has been represented by written submissions filed by the assessee but the said additions has been sustained with the observation that the assessee has failed to produce land acquisition awards, revenue records, and proof of classification of lands. 8.1 In course of hearing before the Tribunal, the Ld AR of the assessee has filed paper book containing copies of Award of acquisition of land issued by the Competent Authority, Land Acquisition cum Sub Divisional Magistrate, Bhatinda, copy of financials, bank statement, Copy of 26AS and other relevant p....
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....dance 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." From the above, it is clear that the applicability of the Acquisition Act of 2013 has been given effect in respect of the enactment specified in Fourth Schedule including the NH Act of1956 with effect from 01.01.2015. Circular No.36/2016 (Relevant Para 3) 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 acquisition of non-agricultural land. The matter has been examined by the Board and it is hereby clarified....
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....ecision of the Chandigarh Bench of the ITAT in Satish Kumar (Supra), held that the provisions of the RFCTLARR Act, 2013, are applicable to acquisitions made under the National Highways Act, 1956. • UOI v. Tarsem Singh & Others (Civil Appeal No. 064 of 2019, dated 19.09.2019): The Hon'ble Supreme Court observed that the provisions of the RFCTLARR Act, 2013, are applicable to land acquired under the National Highways Act, and that compensation must be calculated and paid in accordance with the provisions of the RFCTLARR Act, 2013. • NHAI v. Modan Singh and Others (FAO 756-2022, order dated 11.04.2023) : The Hon'ble Jurisdictional Punjab & Haryana High Court held that the RFCTLARR Act, 2013, applies to cases where the award was announced prior to 31.12.2014 but compensation had not yet been paid as of 31.12.2014, even if the said acquisitions were executed under the National Highways Act, 1956. • Raghavan Nair v. The Asst. Commissioner of Income Tax, Circle 2(1), Thrissur and Special Tahsildar (LA) No. I, Kochi Metro Rail Project, Ernakulam [2018 (1) TMI 863 - Kerala High Court]. • ITO, Ward-4(5), Patna v. Shri Suresh Prasad [2022 (9....
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....and the jurisdictional High Court decision is binding within the State. 18. We have heard the rival submissions and considered the materials on record, and we are of the opinion that this issue is already covered in favour of the assessee by the decision of the coordinate Bench in the case of [2025] 172 taxmann.com 13 (Amritsar - Trib.)/[2024] 116 ITR(T) 529 (Amritsar Trib.)[09-10-2024 and also in case of Ranjit Singh v. Income Tax Officer, reported in 120 ITR (Trib.) 707 [2023(8) TMI 1617 - ITAT Amritsar where in an identical matter, the Hon'ble ITAT held that because the award of compensation had not been paid as of December 31, 2014, and was instead paid during Financial Year 2015-16 (Assessment Year 2016-17), the assessee was entitled to relief. 19. At this stage we would also like to refer to a decision of the Hon'ble Calcutta High court in the case of PCIT vs Durgapur Project Limited [ 2023] 454 ITR 367,[ 24 February, 2023 ITAT NO. 282 OF 2022 (G.A. NO. 02 OF 2022)] where the Hon'ble court also had the occasion to make an observation on the circular issued by the CBDT dated 25.10.2016 in Circular No. 36/2016 in the backdrop of taxability of the compensation received....