TaxTMI 
TaxTMI 
2026 (10) TMI 497
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the Assessing Officer in treating the land sold by assessee as capital asset within the meaning of section 2(14) of the I.T. Act, 1961. 3. On the facts and circumstances of the case as well as law on the subject, the Ld. CIT(A) as well as Id. Assessing officer has erred in not giving deduction to assessee u./s 10(37) of the I.T Act 1961 on account of compulsory acquisition of agricultural land. 4. On the facts and circumstances of the case as well as law on the subject, Ld. CIT(A) has erred in confirming action of assessing officer by sustaining the addition of Rs. 53,58,334/- as long term capital gain on account of compulsory acquisition of land. 5. On the facts and circumstances of the case as well as law on the subject, Ld. CIT(A) has erred in sustaining the addition amounting to Rs. 1,16,41,667/- as 50% of compensation to be assessed under the head other sources and remaining 50% to be assessed under the head short term capital gain. 6. It is therefore prayed that above addition made by assessing officer and confirmed by Commissioner of Income-tax (Appeals) may please be deleted. 7. Appellant craves leave to add, alter or delete an....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the assessee's property was proposed to be auctioned. Thus, the assessee came to know about the order on 10.07.2024 and immediately filed the appeal. The Ld. Departmental Representative (in short "Ld. DR") relied upon the assessment order and the order of the Ld. CIT(A). The Ld. DR also opposed the delay condonation but has stated hereinabove the delay is condoned under the peculiar circumstances in the present assessee's case. It is pertinent to note that under the special circumstances and the reasons cited by the assessee in assessee's affidavit it appears to be the genuine scenario for filing the belated appeal before the Tribunal. Therefore, under exceptional circumstances, we are condoning the delay of 3,675 days. This delay condonation should not be taken as precedent in any other cases. 6. The Ld. Authorised Representative (in short "Ld. AR") for the assessee submitted that in the case of Ambaben Jamubhai Patel being ITA No.3021/AHD/2014 for A.Y. 2007-08 order dated 13.04.2022 the Tribunal on the similar facts of compensation received in respect of acquisition of land related to Hazira land acquisition and the compensation paid by Essar Steel Ltd., the Tribunal has all....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssee on or after the 1st day of April, 2004. 74. We have already held the land is not situated within a municipal area, thus, first condition is satisfied. So far as second condition, is concerned, we find it is certified by District Agricultural Officer, Surat vide his letter dated 16.06.2014 that the agricultural operation are carried in the land. Further the award was passed in financial year 200708, in the award the Special land Acquisition Collector on a number of stances mentioned that the land under acquisition is used for the agriculture purpose, this prove beyond doubt the land was being used for agricultural purposes, not only on date of acquisition but till the date of acquisition all throughout, but in any case for more than two years. The land in the revenue record is also shown as agriculture land. For third condition, we find that that first award is by consent; however, as held by Hon'ble Supreme Court in the case of CIT Vs Ghanashyam (HUF) (supra) it was held that consent award which has followed all steps of compulsory acquisition has to be regarded as an award of compulsory acquisition. There is no dispute that the State Government before starting th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....re High Court held that having regard to the facts and findings recorded by the Tribunal, it was obvious that not only the physical characteristics of land, in the instant case, but the user also was agricultural. Even though the land was not actually put to agricultural use since about one year prior to the sale, there was no evidence to establish that it was converted to any other use. The fact that permission under section 63 of the Bombay Tenancy and Agricultural Lands Act was obtained by the assessee to sell the lands to the society for residential purposes would not, militate against the land continuing to be agricultural on the date of its sale, as the permission was obtained only about two and a half months prior to the sale. Therefore, till the land was held by the assessee its character as agricultural land was not changed either as a result of its reclassification on in the revenue records or by the actual alteration of its use. Again, there was no evidence on record to show that there was any development in the surrounding area or that the land itself was developed prior to its sale. The land was located on the outskirts of the village but it was not situate in the muni....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... be subjective. It is also mention in the last para in the disclaimer that results have to be corroborative in association with the ground observation, available, if any. Thus, the report itself contents vague observation and cannot be used as evidence or conclusive or expert report based of any scientific evidence against the assessee. Moreover, said report was not provided to the assessee. Thus, by applying of such test we find that the land of the assessee acquired by Special Land acquisition officer is agriculture land. In the result, the assessee is also succeeded on this issue/ ground as well. 78. Considering the facts that we have already held that the land of the assessee is not 'capital asset' as the same does not fall in municipal area, Hazira Notified area is not a municipality or deemed municipality and on alternative plea also held eligible for exemption under section 10(37), therefore, all other pleas or counter pleas of the parties and the remaining issues arising thereto have become academic. 79. ..... 80. Next ground of appeal relates to partly confirming the action of assessing officer in taxing Rs. 6,50,000/- as capital gain and....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e the Id CIT(A) estimated the cost of acquisition of built-up units/ pucca structure @ 50% of the cost awarded for such built-up / pucca structure in the award. Considering the area where in the such built-up unit or pucca house is situated, it our view, the estimation of it's cost of acquisition is on lower side, therefore we deem it fit and proper to increase it to 60%, would be reasonable and fair. Therefore, we direct the Assessing officer to treat the cost of acquisition @ 60% of Rs. 13.00 lacs as cost of acquisition. In the result, the corresponding ground of appeal is partly allowed." 7. We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the AO has added the LTCG to the extent of Rs. 53,58,334/- out of the total compensation of Rs. 1,70,00,000/-, thereby treating land as capital asset. The Assessing Officer also made addition of Rs. 1,16,41,667/- as income from other sources thereby observing that the trees, well, Kachcha huts, Pakka huts etc. should not be treated as agricultural land and the compensation received for its acquisition should be taxed under the head income from other sources. The asse....