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2015 (11) TMI 180 - AT - Income TaxNon deduction of tds u/s 194LA - compensation paid to various persons for acquiring the non-agricultural land - Held that:- It is clear that the question of compulsory acquisition will arise only where the compensation cannot be determined by agreement. Sub-sec.3 & 4 will come into play only when there is a failure to determine the compensation through negotiation between State Government and the land owners. When the compensation is based on an agreement between State Government and owner of the land, no more can we say that it is a compulsory acquisition. Especially so, in view of the elucidation of law by the Hon’ble Chattisgarh High Court in the case of Naya Raipur Development Authority. Once the acquisition is not considered as compulsory, Sec.194LA of the IT Act will not be applicable. Thus, in our opinion, if the compensation paid by the assessee for acquisition of land were all through agreements similar to the one entered by the assessee with Smt.Sumitra Shivanand Keeliputti, pertinent parts of which have been re-produced by us above, then these would not fall within the definition of compulsory acquisition. However, we are of the opinion, that the acquisition whether the acquisitions for which assessee had not deducted tax at source were based on agreements similar to the one produced by the assessee before us or in other words whether in all such compensation amounts were fixed in accordance with Sec. 29(2) of the KIA Act require verification by the lower authorities. We therefore, set aside the orders of the authorities below and remit the issue back to the file of the AO for verifying the agreements to reach a conclusion whether acquisitions fell under ‘compulsory acquisition’ or not. Learned AO shall proceed as per law declared by Hon’ble Apex Court and elucidation given by Hon’ble Chattisgarh High Court which we have reproduced above. Since we have remitted the question regarding nature of acquisition back to the file of the AO, the other question as to the failure of machinery provision for applying Sec.194LA is kept open at this juncture. - Decided partly in favour of assessee for statistical purposes.
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