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2019 (11) TMI 649 - AT - Income TaxReopening of assessment u/s 147 - denying the exemption u/s 10(37) on the ground that land was not used for agricultural purpose - confirming the addition on account of long term capital gain on compulsory acquisition of agricultural land - HELD THAT:- The return of income was processed u/s 143(1) and thereafter, taking into consideration the directions of the Coordinate Bench where it was directed to assess the capital gains in AY 2010-11 and not in AY 2009-10, the AO has issued the notice u/s 148 of the Act. It is therefore a case where there was no disclosure of such transaction in the return of income and secondly, the return of income so filed was processed u/s 143(1) and no regular assessment was made, hence, there is no question of forming of an opinion by the AO prior to issuance of notice u/s 148 of the Act. The contention of the ld AR regarding change of opinion therefore cannot be accepted. The second contention of the ld AR that only where the AO has reason to belief that income has escaped assessment, notice u/s 148 can be issued. Another related contention raised by the ld AR that only where the AO decided the issue of exemption u/s 10(37), it can be said to be a case of escapement of income. As we have stated above, the assessee has received the compensation on compulsory acquisition of land during the year and in absence of disclosure of such transaction in the return of income or any claim of exemption u/s 10(37) in the return of income, it is a clear case where the capital gains on such compulsory acquisition of land in respect of which the compensation has been received during the year has escaped assessment. The matter relating to assessee’s eligibility for exemption u/s 10(37) is a matter of detailed examination and so long as prima facie, the AO has formed an opinion that the income received during the year has escaped assessment and such formation of belief is based on tangible and undisputed facts, there is no infirmity in the action of the AO in acquiring jurisdiction u/s 147 of the Act. Assessee in his appeal for AY 2009-10, the assessee has challenged the year of taxability of the compensation and has contended that the same falls in AY 2010-11 and again in AY 2010-11, the assessee is challenging the taxability of the compensation so received inspite of the specific directions of the Coordinate Bench wherein it was specifically directed to assess the capital gains in AY 2010-11 and not in AY 2009-10. In the result, we donot see any infirmity in the action of the AO in acquiring the jurisdiction by issuance of notice u/s 148 and the ground so taken by the assessee is dismissed. Exemption u/s 10(37) - essential and fundamental condition for availing exemption u/s 10(37) has to be construed strictly and in that sense, the phrase “such land” means the whole of the land being used for agricultural purposes. The same cannot be read and understood as “such land or a part thereof” where even a part of land is used for agricultural purposes, it may still qualify for exemption. Had that been the intention of the legislature, the same would have been provided appropriately. Therefore, on account of the said reasoning as well, the contention of the ld AR cannot be accepted. We are unable to accede to the contentions so advanced by the ld AR that the assessee qualifies for exemption under section 10(37) of the Act. - Decided against assessee
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