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2022 (12) TMI 1096 - HC - Income TaxExemption u/s 10(37) - entitlement of a person for exemption under Clause 37 Section 10 - land needed for the public purpose within the meaning of Land Acquisition Act - acquisition of the land at Village Dindoli by the SMC was for the Sewage Treatment Plant - whether land not being used as an agricultural land two years prior to the transfer to SMC? - HELD THAT:- CIT(Appeals) and the ITAT both have held rightly that the acquisition of the land at Village Dindoli by the SMC was for the Sewage Treatment Plant and this is a compulsorily acquired land under the provision of Section 107 of the GTP & UD Act. The land was needed for the purpose of Town Planning Scheme or the Development Plan and therefore, it was deemed to be the land needed for the public purpose within the meaning of Land Acquisition Act. Deed of transfer of the land was signed between the SMC represented by the Director of the Town Planning and the assessee along with his family members - The proceedings u/s 77 of the BPMC Act were pending at the time of registration of sale deed for transfer of property and pending the reservation, efforts were made by the farmers and SMC to negotiate the price of land to be transferred in favour of the SMC to avoid the compulsory acquisition of the land by SMC under Sections 77 and 78. This negotiation had been vetted by the Standing Committee of the SMC vide its Resolution No. 1758 dated 28.12.2007 where the SMC had agreed to pay land owners at the rate of Rs. 2,000/- per sq.mt for their land and to not invoke provisions of Sections 77 and 78 (Compulsory Acquisition) of Gujarat Town Planning Act. The land had been transferred by the registration of sale deed by the assessee and the SMC where the purchaser had to pay stamp duty at the prevalent market rate to avoid any kind of litigation. This was a better way worked out by the authority and the land owners. This had resulted into the Assessing Officer finding it not to be a compulsory acquisition, but, more a voluntary transfer. However, this Court in case of other assessee being Dipak Kalidas Pauwala [2016 (4) TMI 431 - GUJARAT HIGH COURT] has held the requisite conditions of Section 10(37) to have been fulfilled. The issue raised in the instant case is that the agricultural land owned by the respondent assessee should have been used for a period of two years immediately before the date of transfer for the agricultural purpose and that aspect is missed out by all authorities. As noticed that before the Ao, the department has not raised the issue and the order AO was further challenged before the CIT (Appeals) and thereafter, before the Tribunal where, by a concurrent finding they have held in favour of the respondent. These are the factual aspects of the land not being used as an agricultural land two years prior to the transfer to SMC. This being a factual aspect never having been raised by the department and none of the authorities having opined anything on this, that cannot furnish the ground for disallowing anything under Section 10(37) of the Act. Tax Appeal is dismissed.
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