TMI Blog2003 (10) TMI 263X X X X Extracts X X X X X X X X Extracts X X X X ..... Abi Ger Mumkin 2- 4 7 -3" 2.1 The assessee was allowed compensation by the Land Acquisition Collector as per his award dated 14-8-1985 at the rate of Rs. 55 per sq. yard. The said award was challenged in reference before the District Judge who enhanced the compensation by Rs. 16,55,566 as per his decision dated 4-1-1993. The Haryana Government filed appeal against the above decision of the District Judge before the Hon'ble Punjab Haryana High Court and asked for stay of payment of enhanced compensation. However, the assessee was paid enhanced compensation alongwith interest totalling Rs. 34,11,764 in the period relevant to assessment year 1994-95 on his furnishing of a bank guarantee. 3. The assessee during the course of assessment proceedings claimed that the enhanced compensation was not taxable as the land in the year 1983 was agricultural. The Assessing Officer did not accept this claim of the assessee. In this connection, he relied upon the following factors/circumstances:- (i) Description of the land as per the Revenue record, was shown as Banjar or Ger Mumkin which meant that no agricultural opera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned Commissioner showed that purely agriculture kind of land was developed in the close vicinity of the acquired land. He further observed that the appellant did not convert the use of land to non-agricultural use. The land was intended to be used for agricultural purposes. The agricultural operations were also carried on this land before the compensation was received vide order dated 14-8-1985. The land could not be used for any other purpose in view of provision of Capital Project Periphery Act. The construction of Dhillon Theatre or Motor Market or other commercial buildings did not change the character of the land in question. He further held that the character of land was further not to be determined on account of any potential use of the land. The learned Commissioner of Income-tax (Appeals) further held that provisions of section 2(14) of the Act were not applicable in this case. For all the reasons given above, the learned Commissioner of Income-tax (Appeals) held that the enhanced compensation of Rs. 16,55,566 could not be charged to tax as capital gains. 5. The Revenue has brought the issue in appeal before the' Appellate Tribunal. Smt. Geet Mala, the learned Department ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was from agricultural land. In the above circumstances, it was not open to the Revenue to hold that the enhanced compensation was taxable giving a different treatment to the character of the land. Sh. Vineet Krishan further submitted that the position of the land as at the time of acquisition is required to be considered and not its potential use. The potential use of the land in dispute might be commercial but on that account the land could not be denied character of agricultural land. The learned counsel relied upon all the facts found by the learned Commissioner of Income-tax (Appeals). 6.1 The learned counsel further argued that the decision of Hon'ble Supreme Court in the case of Hindustan Housing Land Development Trust Ltd. was fully applicable to the facts of the case as here also the State of Haryana denied the right of the assessee to receive enhanced compensation. He submitted that the compensation allowed by the District Judge was challenged before the Hon'ble High Court and, therefore, the decision of the District Judge on the right of the assessee was not final and enhanced compensation was not taxable in the light of decision of the Hon'ble Supreme Court. The l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. Obviously, it was only a stop-gap activity. It was not a true reflection of the nature and character of the land. The land sold during the year of account was not agricultural land in India during the year of assessment and hence not liable to be excluded from the definition of the words "capital asset". The surplus realized on the sale of land was assessable as capital gains." 7.2 Having regard to aforesaid authorities, we are unable to hold that the land in question was an agricultural land. Its description as per the revenue record is "Ger Mumkin" or "Abi", i.e., non-agricultural land on which no cultivation is possible. A presumption of truth is attached to the entries in Revenue record and, therefore, there was heavy burden on the assessee to show that above description was wrong and that the assessee had used the land for agricultural purposes and as such was agricultural land. No such evidence is available on record. No evidence of cultivation has been filed. The learned counsel for the assessee did claim that the assessee had shown agricultural income from this land but no material to support the above contention was made available on record, neither copy of return o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpensation or consideration is enhanced or further enhanced by the court, Tribunal or other authority shall be deemed to be income chargeable under the head "Capital gains" of the previous year in which such amount is received by the assessee. The following clause (c) shall be inserted after clause (b) of sub-section (5) of section 45 by the Finance Act, 2003, w.e.f. 1-4-2004: (c) where in the assessment for any year, the capital gain arising from the transfer of a capital asset is computed by taking the compensation or consideration referred to in clause (a) or, as the case may be, enhanced compensation or consideration referred to in clause (b), and subsequently such compensation or consideration is reduced by any court, Tribunal or other authority, such assessed capital gain of that year shall be recomputed by taking the compensation or consideration as so reduced by such court, Tribunal or other authority to be the full value of the consideration. Explanation-For the purposes of this sub-section,- (i) in relation to the amount referred to in clause (b), the cost of acquisition and the cost of improvement shall be taken to be nil, (ii) the provisions of this sub-section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ory provisions applicable at the relevant time. It appears that the assessee did not show any capital gain, nor the Revenue Authorities applied their mind to this question in the relevant assessment year when the land was acquired and compensation was received in the first instance. But the above question does not arise before us as we are not dealing with question of award of compensation at the first instance but with the question of enhanced compensation received in the year under consideration. The assessee has not placed any evidence on record, nor furnished any computation under clause (a) to show that the indexed cost in the present case was greater than the compensation allowed to the assessee and as such the assessee suffered capital loss under above clause which was required to be adjusted against the enhanced compensation as per the statutory provisions. 11. As stated earlier in the assessment year under consideration, we are concerned with the enhanced compensation which admittedly was received by the assessee in the previous year. Therefore, capital gain is to be computed as per clause (b) of sub-section (5) of section 45 of the Income-tax Act. The aforesaid statutor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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