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2020 (5) TMI 465 - HC - Income TaxExemption from income-tax under the RFCTLARR Act [Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013] - compensation received for compulsory acquisition of agricultural land and non-agricultural land - compensation received in respect of award or agreement which has been exempted from levy of income-tax vide section 96 of the RFCTLARR Act - HELD THAT:- There is force and merit in the submissions. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 came into force with effect from 01.01.2014. It is a matter of record that the parties to the lis; viz., the petitioner and the acquisition authority, for the purpose of coming out the way development had in unison agreed to acquire and give the land on the basis of certain conditions in fixing the market value. Petitioner, in lieu, thereof received 80% of the amount, i.e., ₹ 43,51,786/-. I would not be commenting on the claim of the petitioner with regard to the balance amount, as the matter is subjudice in this Court. The language of Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, do not leave any doubt in the mind that if the land is either acquired or the result of an agreement, it could not fall within the mischief of Income Tax Act, in other words, exemption is liable to be granted. Central Board of Direct Tax vide the Circular No.36/2016 dated 25.08.2016 came out with a clarification that compensation received in respect of award or agreement which has been exempted from levy of income-tax vide section 96 of the RFCTLARR Act shall also not be taxable under the provisions of income-tax Act, 1961 even if there is no specific provision of exemption for such compensation in the Income-tax Act, 1961 - Thus assessment and demand notice cannot sustain and are hereby quashed. Decided in favour of assessee.
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