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2017 (8) TMI 532 - HC - Income TaxAgricultural or non agricultural land - ascertainment of nature of land - proof of agricultural operation - TDS u/s 194LA - TDS determined only on the basis of records furnished by assessee and no inquiry, investigation, physical verification is permissible/desirable at the end of assessing officer - Held that:- The assessee is the Urban Development Authroity which requires the amount for the purpose of paying compensation to the agriculturists. In view of the observations which are made by the Supreme Court in Sarifabibi (1993 (9) TMI 10 - SUPREME Court ) wherein it has been held that on facts, under the Local Act which is a subject matter, the permission was taken and on the date on which, the contract was entered between the parties that too under cooperative society, it was an agriculture land, therefore exemption which was granted was on agriculture land. In that view of the matter, while acquisition done by the local authority which is statutory authority when they are paying compensation of an agricultural land, we are of the considered opinion that the judgment of Sarifabibi will not apply in the facts of the present case. While interpreting the view, we have to look into that the local authority is acting in the interest of State as a whole or not. In the present case, for the purpose of taxation, if the interpretation which has been canvassed by the counsel is accepted, it will put loss to the authority and they have to pay higher compensation. In that view of the matter, while considering the payment of compensation, it should be on a lower side and in our considered opinion, the authority has not committed any wrong. They have acted in the interest of the State and it should be considered as an agriculture land as rightly considered by the authority. - Decided in favour of the assessee.
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