TMI Blog2010 (9) TMI 411X X X X Extracts X X X X X X X X Extracts X X X X ..... put forth by the CIT (Appeals) is not consistent with the provisions of section 10(37)(iv) - condition prescribed in clause (iv) of section 10(37) is satisfied - Assessing Officer to recompute the exemption eligible under section 10(37) of the Act, keeping in mind the non-agricultural use of the lands as conceded by the appellant - respective orders of the CIT (Appeals) in the appeals set aside and the matter restored back to the file of the Assessing Officer to adjudicate the claim of the assessee for exemption under section 10(37) of the Act – A ppeal partly allowed - 863 to 877, 897 to 907, 969 & 985 (Chd.) of 2010 - - - Dated:- 30-9-2010 - G.S. Pannu, Accountant Member and Ms. Sushma Chowla, Judicial Member T.N. Singla for the Appellant. Smt. Jaishree Sharma for the Respondent. Order G.S. Pannu, Accountant Member. The captioned group of appeals have been preferred by the respective assessees in which a common issue has been raised relating to the claim of exemption under section 10(37) of the Income-tax Act, 1961 (in short the Act ) with respect to the compensation or enhanced compensation received against compulsory acquisition of lands. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the head Capital gains arising from the transfer of an agricultural land. This exemption is subject to four conditions prescribed in clauses (i) to (iv) contained therein. As per clause (i) the land should be situated in any area referred in item (a) or item (b) of sub-clause (iii) of section 2(14) of the Act. Clause (ii) prescribes that during the period of two years immediately preceding the date of transfer, such land should have been used for agricultural purposes by the HUF or individual or a parent of his. Clause (iii) prescribes that such transfer is by way of a compulsory acquisition under any law or a transfer for which the consideration is determined or approved by the Central Government or the Reserve Bank of India. Lastly, clause (iv) prescribes that such income should arise from compensation or consideration for transfer received on or after 1-4-2004. In terms of the Explanation below section 10(37), it is provided that the expression compensation or consideration shall inclu 4. In terms of the aforesaid, the assessee contends that the impugned amounts received during the previous year relevant to the assessment year under consideration are entitled to exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the CIT(A) assessee pleaded that Khasra Girdawari of the lands proved the agricultural use of the land. As per the CIT(A) in the Award No. 1 of 1999-2000 made by the Land Acquisition Collector, Panchkula the compensation for fruit or non-fruit trees has been determined at Rs. 2795 on a land measuring 52 acres. Similarly, he has referred to Award No. 12 for the year 2002-03 made by the Land Acquisition Collector, Panchkula wherein the classification of the land is mentioned as Gair Mumkin. On this basis it has been concluded that no crops were grown on the land, being Gair Mumkin and only some non-fruit bearing trees were standing on land. Accordingly as per the CIT(A) the land was not used for agricultural purposes at the time of acquisition. The reliance placed by the assessee on the Khasra Girdawri was disregarded by observing that filing of the same by the assessee was only a self-serving exercise. 6. Even in the course of hearing before us, ld. DR has reiterated the aforesaid, in order to point out that the land of the assessee cannot be said to have been used for agricultural purposes in the preceding two years. It is pointed out that the Awards made by the Land Acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Land Acquisition Collector in pursuance to the Award. The above proposition is supported by the judgment of the Hon ble Karnataka High Court in the case of Buddaiah v. CIT [1985] 155 ITR 2771. In this connection, we have perused the Awards rendered by the Land Acquisition Collector, Panchkula on 1-10-1999 and 10-12-2002. In terms of the stated Awards, the possession has been taken over immediately and therefore, the title vested in the Government in terms of section 16 of the Land Acquisition Act, 1894 from the said dates. Accordingly, for the purposes of charging capital gains, the date of transfer corresponds to the dates of the two Awards. Therefore, for the purposes of section 10(37)(ii) of the Act, the date of transfer is to be taken as the dates of the Awards. Now, in order to examine the condition prescribed in clause (ii) of section 10(37), it has to be established that during the period of two years immediately preceding such dates of transfer, the land was being used for agricultural purposes by the assessee or a parent of his. The plea of the assessee for agricultural use of land is based on copies of Khasra Girdawri which clearly shows growing of crops in the releva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e it can be said that in the period of two years immediately preceding the date of transfer the lands in question were used for agricultural purposes, and accordingly assessee satisfies the conditions mentioned in section 10(37)(ii) of the Act. Merely because the land was adjoining a developed area would not take away the agricultural use of the land portrayed by the khasra girdawris. Therefore, our conclusion that use of the land for agricultural purposes stands proved. It may be mentioned that the ld. Counsel for the assessee conceded that the lands mentioned in girdawri at Khasra Nos. 420 and 421 have not been put to use for agricultural purposes as certain buildings were constructed thereon, as evidenced by the Khasra Girdawri. Therefore the corresponding enhanced compensation received this year shall not be eligible for exemption under section 10(37) of the Act. 10. Insofar as condition prescribed in clause (iii) of section 10(37) is concerned, there is no dispute that enhanced compensation has been received by the assessee during the year in pursuance of an acquisition by the State Government under the provisions of the Land Acquisition Act, 1894. 11. Clause (iv) of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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