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PR. Commissioner of Income Tax-1 Versus Dipak Kalidas Pauwala

Exemption u/s 10(37) - compensation received from the Surat Municipal Corporation for acquisition of its lands - Held that:- Tribunal upon appreciation of the evidence on record has concurred with the findings of fact recorded by the Commissioner (Appeals) and has found as a matter of fact that the assessee was carrying on agricultural activity on the land in question being Survey No.192, Block No.305 in village Dindoli. The Tribunal has also concurred with the finding recorded by the Commission .....

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, the Tribunal, after appreciation of the evidence on record, has recorded a concurrent finding of fact to the effect that the assessee fulfills all the requisites for the purpose of being entitled to exemption under section 10(37) of the Act and has based its conclusion thereon. It is not the case of the appellant that the Tribunal has placed reliance upon any irrelevant material or that any relevant material has been ignored, nor is the learned counsel for the appellant in a position to dislod .....

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e Appellant : Mr Sudhir M Mehta, Adv For the Respondent Rep by: Mr B S Soparkar, Caveator ORDER ( Per : Honourable Ms. Justice Harsha Devani ) 1. The appellant revenue in this appeal under section 260A of the Income Tax Act, 1961 (hereinafter referred to as "the Act") has challenged the order dated 22.7.2015 made by the Income Tax Appellate Tribunal, D Bench, Ahmedabad (hereinafter referred to as "the Tribunal") in ITA No.2685/Ahd/2011 by proposing the following two questions .....

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(A) treating the land in question as agricultural land without any evidence substantiating the generation of agricultural income and expenditure incurred thereof ?" 2. The respondent-assessee filed return of income for assessment year 2008-09 on 27.1.2009 declaring taxable income at nil and showing agricultural income of ₹ 1,77,000/-. The return came to be processed under section 143(1) of the Act and came to be accepted on the returned income. Subsequently, the matter was taken up f .....

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o the tune of ₹ 1,42,93,050/- including agricultural income of ₹ 1,77,000/-. The Assessing Officer called upon the assessee to submit a copy of the sale deed in respect of the land so acquired by the SMC, which came to be furnished by the assessee. The Assessing Officer noted that the land in question, namely, Revenue Survey No.192, Block No.305 of village Dindoli, Surat admeasuring 29718 square metres had been acquired by the SMC for sewage treatment plant. According to the Assessin .....

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tion 194LA of the Act, the Assessing Officer held that the SMC had rightly deducted tax at source from the compensation paid to the assessee because of the fact that the land in question was not an agricultural land. He, accordingly, held that the assessee failed to fulfill the conditions as provided in sub-clause (ii) of clause (37) of section 10 of the Act and computed the long term capital gain at ₹ 1,46,75,120/- and also treated the agricultural income of ₹ 1,77,000/- as income f .....

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f the crop cultivated during the financial years 2003-04, 2004- 05, 2005-06, 2006-07, 2007-08, 2008-09 and 2009-10 and in all the said years, the crop grown was shown as Jowar . The Commissioner (Appeals) was of the view that the Assessing Officer had dismissed the claim of the assessee under section 10(37) of the Act without making proper verification and held that the copy of the 7/12 extract was a primary document issued by a Government authority, which could not be rejected unless it was est .....

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clause (14) of section 2 of the Act and, therefore, the assessee fulfilled the first condition laid down under section 10(37) of the Act. The Commissioner (Appeals) further noted that the second condition, namely, that such land during the period of two years immediately preceding the date of the transfer should be used for agricultural purpose is established by the extract of 7/12 record. The third condition that transfer should be by way of compulsory acquisition under any law was an undisput .....

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t. The Commissioner (Appeals), accordingly, allowed the said ground of appeal. The revenue carried the matter in appeal before the Tribunal, which concurred with the findings of fact recorded by the Commissioner (Appeals) and dismissed the appeal. 3. Mr. Sudhir Mehta, learned senior standing counsel for the appellant, assailed the impugned order by reiterating the findings recorded by the Assessing Officer as well as the grounds stated in the memorandum of appeal. It was submitted that the sale .....

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ed on the questions as proposed or as may be formulated by the court. 4. In the present case, the assessee claimed exemption in respect of compensation received by it from the Surat Municipal Corporation for acquisition of its lands under clause (37) of section 10 of the Act. Section 10(37) of the Act which is relevant for the present purpose reads as under:- "10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not .....

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du undivided family or individual or a parent of his; (iii) such transfer is by way of compulsory acquisition under any law, or a transfer the consideration for which is determined or approved by the Central Government or the Reserve Bank of India; (iv) such income has arisen from the compensation or consideration for such transfer received by such assessee on or after the 1st day of April, 2004. Explanation.- For the purposes of this clause, the expression "compensation or consideration&qu .....

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