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2022 (11) TMI 1131 - AT - Income TaxAddition of compensation in the shape of annuity treating it as interest/reward - exemption income arising equities payment to land owners whose land has been acquired - Rehabilitation and Resettlement Award for affected families by Collector - Right to fair compensation and transparency in land acquisition, rehabilitation and resettlement - As submitted that the annuity scheme under which the assessee received the money is part of the compensation against the land acquired and is exempt u/s 10(37) - HELD THAT:- As it becomes obvious with preparation of Rehabilitation And Resettlement Scheme u/s 16 of R&R Act is the foundation upon which after necessary enquiries the land acquisition award is passed by the Collector u/s 23 of R&R Act. Then sub-clause (b) of Section 23 specifically provides that rehabilitation and resettlement award as determined u/s 31 is part of the land acquisition award passed by the Collector u/s 23. Rehabilitation and resettlement award u/s 31 sub-clause (j) specifically refers to the particulars of annuity provided to the land owners. The Second Schedule to the R&R Act relevant to Section 31(1), 38(1) and 105(3) of the R7 r Act, provides elements of R&R Entitlements and at item no 4 there is choice of annuity or employement and the Schedule also fixes the minimum royalty to be paid. Section 51 of R&R provides for establishment of land acquisition, rehabilitation and resettlement authority for disposal of the disputes arising out of acquisition, compensation, rehabilitation and resettlement. Section 69 provides that in determination of amount of compensation to be awarded for land acquired including the rehabilitation and resettlement entitlement, the authority shall take into consideration whether the Collector has followed the parameters set out u/s 26 of section 30. The form of award is mentioned in section 70 of the R&R Act which refers to section 28. Thus, the award for the purpose of R&R Act not only includes the market value of the land but also rehabilitation and resettlement entitlements allowed to the land holders arising out the social impact assessment and study of the prospective acquisition of the land. Therefore, for the purpose of the section 96 of the R&R Act, not only a monetary compensation of the land and interest upon it but the quantifiable monetary benefits arising out of rehabilitation and resettlement entitlements of the land owners, shall be part of the Award under the R&R Act and no income tax can be levied on such payments. The findings of the ld Tax Authorities below are held to be erroneous as they have failed to examine the issue in correct context to the law arising out of R&R Act. Grounds are decided in favour of the assessee.
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