Home Case Index All Cases Income Tax Income Tax + HC Income Tax - 2016 (8) TMI HC This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2016 (8) TMI 164 - GUJARAT HIGH COURTTDS on Payment of compensation on acquisition of certain immovable property - applicability of section 194LA qua the compensation for the buildings - Held that:- Section 194LA applies when the compensation for acquisition of immovable property is being disbursed. Term 'immovable property' has been explained in clause(ii) of the Explanation to section 194LA as to mean any land (other than agricultural land) or any building or part of a building. If the trees are seen separate from the agricultural land, it would not form part of this immovable property. If on the other hand, such trees are seen as part of the land under acquisition, the same would form compensation for acquisition of agricultural land. We may also notice that many of these trees are fruit bearing trees. Any compensation for loss of fruit bearing trees must necessarily be part of the compensation for agricultural land. The Land Acquisition Officer while awarding the compensation would determine the market value of the land and in cases where such land also has fruit bearing trees, would separately compensate for loss of such trees. In view of such factors, we do not seen any applicability of section 194LA for compensation to the trees. Coming to controversy regarding the compensation for buildings, at the outset, we are somewhat surprised by the observations of the Tribunal that the State Government had determined a uniform rate for the land under acquisition which could not be a market reality and therefore, for the farmers' houses standing on the land, higher market rate was considered for such landowners. In the opinion of the Tribunal, therefore, in reality what was paid to the farmers on account of buildings was not a compensation for buildings, but was higher amount of compensation for acquisition of the lands. These observations are not borne out from the awards, copies of which are placed on record, or from any other contemporaneous material suggesting any adjustment on part of the State Government in determining the market value of the land. We do not find on what basis the Tribunal was prompted to make such observations. In any case, being dehors the evidence on record, we discard such conclusion of the Tribunal. What therefore, emerges from the record is that the Land Acquisition Officer bifurcated his award by awarding separate compensation for the land, for the building and for the trees. The compensation for the building comprised substantial portion of total compensation so worked out. For example, in the award dated 21.1.2008, against compensation of ₹ 36.95 crores for the land, compensation of ₹ 24.56 crores was assessed for building. Likewise, in other award, against value of land of ₹ 30.08 crores, cost of construction inclusive of trees was shown to be ₹ 26.18 crores. There is nothing on record to suggest that the buildings in question were only small residential units of the farmers who were cultivating the land or that they were in the nature of godown for storing the agricultural implements or agricultural produce. Even if therefore, the lands were in the nature of agricultural lands, for the purpose of deducting tax under section 194LA of the Act, the question of deducting tax on the compensation for buildings would certainly arise. The buildings do not form part of the agricultural lands or at any rate have not been shown to be in the nature of small farm houses or godowns for agricultural operations. The Tribunal therefore, committed an error in reversing the orders of the revenue authorities with respect to the applicability of section 194LA qua the compensation for the buildings.
|