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2008 (10) TMI 638 - HC - Income TaxTDS u/s 194LA - compensation paid to the land owners which was arrived at based on negotiated settlements - Compulsory acquisition or not - acquisition of land initiated u/s 11 of the Land Acquisition Act, 1894 - land owners have executed sale deeds on the basis of negotiations in favour of the petitioner. HELD THAT:- The sale deeds would constitute sale under the Transfer of Property Act and cannot be treated as a compulsory acquisition under the law for acquisition of immovable property. As already noticed, there was no divesting of the title of the land owners under Section 16 of the Land Acquisition Act, namely, passing of an award, and possession being taken thereunder or by possession being taken earlier under the urgency clause, namely Section 17. The mere issuance of notification under Section 4(1) does not have the effect of divesting of title of the land owner. Only if there were such divesting of the title of the land owner, and amounts were paid either as compensation or as enhanced compensation, could it be said that there is compulsory acquisition under the law for the time being in force. It may be true that when the notification under Section 4 was issued, the choice of action of the land owners became limited. Faced with the notification under Section 4 of the Land Acquisition Act, there are three courses of action, which can be contemplated. Land owner may prefer writ petition challenging the notification itself. Instead if he is so advised, he may decide to transfer his right to the Government. If neither of the two happens and the Government does not decide to withdraw from the notification, the proceedings may be continued under the Land Acquisition Act where it reaches the stage where an award is passed determining the compensation and unless possession is taken under the urgency clause earlier possession is taken and Government becomes the owner of the property. The title passed to the petitioner only on the strength of the sale deeds executed by the land owners concerned. A perusal of the sale deeds also would appear to clearly support the contention of the petitioner that there was a voluntary transaction entered into by a willing owner to transfer after a number of negotiations, which consumed considerable time. Even if the choice were limited, the question posed before me being whether there was a compulsory acquisition under the law in force, the answer can only be that there was no compulsory acquisition even though it may be true that, but, for the execution of the sale deeds, it may have led to compulsory acquisition under the Land Acquisition Act. Once a notification under Section 4 is effaced by way of withdrawal, the only way it can restart the acquisition proceedings, if so advised, is to issue a fresh notification. This means, in the facts of this case, that even though Government started out by issuing a notification under Section 4 of the Land Acquisition Act, it became unnecessary to proceed with the acquisition as the land owners had executed sale deeds in favour of the petitioner - There is no provision in the Land Acquisition Act which empowers or enables the execution of the sale deed as done in this case. There is no merit in the contention of the respondents that the sale deeds were executed in exercise of the incidental power. It may be true that the Land Acquisition Act does not prohibit a sale in favour of the Government or authority. In fact even after the notification is issued and till there is vesting of the title with the Government under Section 16 or under Section 17, there is no prohibition against a sale by a land owner. But the absence of a prohibition does not mean that the sale deed is executed in the exercise of incidental powers. There is no warrant or need to trace the right of the landowner to any such incidental power in the matter of an inter vivos transaction as a sale even after a notification under the Act or a declaration is not prohibited. Thus, invoking Section 194LA of the Income Tax Act in respect of cases where sale deeds were executed in favour of the petitioner was totally without jurisdiction. Ext.P4 palpably has no legs to stand on - petition allowed.
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