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2022 (7) TMI 256 - ITAT CHANDIGARHLTCG - land including factory building of the assessee was acquired by the State Govt. and the assessee had received compensation including interest - assessee claimed deduction of solatium while calculating Long Term Capital Gain - HELD THAT:- The impugned transaction is covered under RFCTLARR Act. Even the Assessing Officer has not disputed this position that the land for which compensation has been received had been acquired by the National Highway Authority of India (NHAI) and it is also a matter of record and it also remains undisputed that NHAI is one of the bodies covered u/s 106 of the RFCTLARR Act and all compensation given by them are exempt. As per Schedule 1 of the RFCTLARR Act, compensation includes additional compensation, solatium and any other receipt which implies that solatium and interest are part of compensation - CBDT Circular No. 36/2016 dated 25.10.2016 has extended the exemption by including compulsorily acquisition of land without any restriction on area as well as acquisition of land. As also settled law that the Income-tax authorities are bound by the guidelines laid down the CBDT Circulars. The position as it stands now with the passage of the RFCTLARR Act, is that all compensations received qua this Act are not taxable. It has been clarified by the CBDT Vide Circular No.36/2016 dated 21.10.2016 that even where there is no separate deduction allowable under the Income Tax Act, any compensation covered by sections 105 and 106 of the RFCTLARR Act is exempt from taxation. We note that the Ld. CIT(A) has also given a detailed findings on the issue in which the Ld. CIT(A) has also quoted and followed certain judicial precedents and we are in complete agreement with the findings so arrived at by the Ld. CIT(A) in this regard. Accordingly, we find no reason to interfere with the findings of the Ld. CIT(A) on the issue and we uphold his findings while dismissing the ground raised by the Department.
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