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2020 (3) TMI 800 - AT - Income TaxExemption under section 10(37) - Transfer of property on compulsory acquisition - addition on account of long-term capital gain treating sale of agricultural land - HELD THAT:- We find that facts of the case are identical as in the case of VASANTBHAI MOHANBHAI BHANDARI, PREMILABEN M. BHANDARI, NARESH M BHANDARI VERSUS DCIT, RANGE-2 (3) , SURAT AND SHRI ISHWARBHAI M PATEL, SHRI DINESHCHANDRA C. PATE, CHANCHALBEN MOHANBHAI BHANDARI VERSUS ITO, WARD-2 (3) (1) , SURAT [2019 (12) TMI 1284 - ITAT SURAT] insofar as acquisition of the land is concerned, the same was compulsorily acquired as the entire procedure prescribed under the LA Act was followed. The settlement took place only qua the amount of the compensation which was to be received by the appellant for the land which had been acquired. It goes without saying that had steps not been taken by the Government under Sections 4 & 6 followed by award under Section 9 of the LA Act, the appellant would not have agreed to divest the land belonging to him to Techno Park. He was compelled to do so because of the compulsory acquisition and to avoid litigation entered into negotiations and settled the final compensation. Merely because the compensation amount is agreed upon would not change the character of acquisition, from that of compulsory acquisition to the voluntary sale. It may be mentioned that this is now the procedure which is laid down ever, under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 as per which the Collector can pass rehabilitation and resettlement award with the consent of the parties/land owners. Nonetheless, the character of acquisition remains compulsory.” Accordingly, the assessee is eligible for exemption under section 10(37) of the Act. Consequently, the AO is directed to allow exemption under section 10(37) - Decided in favour of assessee.
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