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2012 (10) TMI 322 - AT - Income TaxCapital Gain in lieu of surrender the right - Agricultural land of assessee was acquired by State Gov. in 1986-87 - Compensation for the same also received in the same year - Further in AY 2003-04 the assessee claimed exemption in respect of amount received on surrendered his right to use water from well – Assessee contended that Sec. 45 were not attracted and consequently no capital gain arise because there was no cost of acquisition for which rights - AO of the view that State Gov. has primarily acquired the Agricultural land and the well on it was a part and parcel of such land covered under capital asset within the meaning of Sec. 2(14) and liable to tax u/s. 45 – Held that:- Following the decision in case of B.C. Srinivas Shetty (1981 (2) TMI 1 - SUPREME COURT) that right of lifting of water was acquired by assessee without any cost. Hence no capital gain could be worked out since Sec. 45(1) r.w.s. 48(1) are not applicable in respect of payment made to assessee in lieu of surrender the right to lift the water from well filled for widening of road. Appeal decides in favour of assessee
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