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2023 (10) TMI 1035 - AT - Income TaxRevision u/s 263 - taxability of capital gain arising on compulsory acquisition of land of appellant - award of the compensation to the assessee was under RFCTLARR Act - HELD THAT:- On perusal of the Response of assessee wherein the assessee has submitted an exhaustive response explaining all the possible point of view those could possibly have involved pertaining to the query of Ld. PCIT to satisfy him that the award of the compensation to the assessee was under RFCTLARR Act, and there was no nexus with any of the enactments as prescribed under Fourth Schedule of the RFCTLARR Act, and accordingly, the exemption available under section 96 of the RFCTLARR Act, cannot be denied. PCIT apart from putting the liability on the shoulder of the assessee to substantiate it otherwise, was unable to surface any cogent information/evidence to prove that the acquisition of land of the assessee is connected and acquired under any of the enactments prescribed under Fourth Schedule of the RFCTLARR Act, accordingly, the contentions raised by the Ld. AR, are found to be justifiable, having material substance, which constitutes that the acquisition of land in the case of assessee was under RFCTLARR Act, and is not covered by any of the enactments as prescribed under Fourth Schedule of the RFCTLARR Act, which is further substantiated by the department itself, when the same issue in the case of co-owner of the land Mr. Mahendra Lodha, who has received 1/3 share of the impugned compensation a/w the assessee, which is disputed in the present case, wherein the exemption from income tax has been allowed, without any adverse inference, considering that the receipt of compensation was exempt u/s 96 of RFCTLARR Act. We are of the considered opinion that the order of the Ld. AO, though found to be erroneous but could not be established by any supporting material that the same is also prejudicial to the interest of revenue. The prejudice from the order of Ld. AO was only an anticipation / presumption of the Ld. PCIT, which can not be the basis for initiation of proceedings u/s 263, therefore, the same is not sustainable in the eyes of law. Much less, when the same issue in the case of Co-owner, who had shared the compensation with the assessee, has already been decided in favour of the assessee by the revenue, stating that income tax shall not be levied on any award agreement made under the Act except as provided under section 46 of the Act, the compensation receipt was exempt under section 96 of the RFCTLARR Act, 2013. Consequently, grounds raised in the present appeal by the assessee are allowed.
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