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2019 (6) TMI 1466 - AT - Income TaxBenefit of section 10(37) - character of acquisition - whether merely because the sale price was fixed through a negotiated settlement, the character of acquisition would still remain compulsory? - assessee’s land in question at Vizhinjam Village was notified for compulsory acquisition by Government of Kerala for developing Vizhinjam International Seaport - CIT(A) had allowed the claim of deduction u/s 10(37) based on the certificate produced by the assessee and the details of agricultural income returned for assessment years 2011-2012 to 2013-2014 - HELD THAT:- Though the acquisition proceedings were taken under the Land Acquisition Act, the final price was fixed upon negotiated sale agreement. As regards denying of benefit u/s 10(37) for that reason that the impugned land was not compulsorily acquired but by executing a sale deed, we find that the issue is covered in favour of the assessee by the judgment of the Hon’ble Apex Court in the case of Balakrishnan v. Union of India & Others [2017 (3) TMI 745 - SUPREME COURT]. Hon’ble Apex Court in the case of Balakrishnan v. Union of India & Others (supra) had categorically held merely because the sale price was fixed through a negotiated settlement, the character of acquisition would still remain compulsory. In the instant case, the entire procedure prescribed under the Land Acquisition Act was followed, only price was fixed upon a negotiated settlement. Therefore, in view of the above judgment of the Hon’ble Apex Court (supra), we hold that the acquisition of the urban agricultural land was a compulsory acquisition. The assessee and his wife were maintaining the entire agricultural operation and both of them had shown agricultural income in the return of income. The agricultural income returned by the assessee from this land for assessment year 2011-2012 is ₹ 100,000, for assessment year 2012-2013 is ₹ 2,65,000 and for the period upto 31.07.2012 (date of sale) i.e. for assessment year 2013-2014 is ₹ 45,000. The assessee has also produced the certificate issued by the Agricultural Officer and the copy of the list of the survey number showing the nature of land. The land in question under survey No.606/04 as per the Government records is agricultural land. For the aforesaid reasons, we hold that the CIT(A) is justified in holding the impugned land is an agricultural land and agricultural operation was carried out on the same. Reasons given by the AO for denying the benefit of deduction u/s 10(37) of the I.T.Act is not correct. - Decided against revenue.
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