TMI Blog2022 (12) TMI 114X X X X Extracts X X X X X X X X Extracts X X X X ..... ll the conditions contemplated in clause (i) to (iv) of sub-section (37) of section 10 of the Act, but however, ignorant of the same as entitled to claim compensation derived from the Government of Maharashtra of compulsory acquisition as non-taxable, offered the capital gains to tax by claiming deduction u/s. 54B of the Act. As held by the Hon ble High Court of Bombay [ 2008 (12) TMI 88 - BOMBAY HIGH COURT] that the authorities under the Act are required to assist the assessee in the assessment proceedings by giving effect on the correct position of law, even if the assessee makes wrong claim. Therefore, the compensation derived from the Government of Maharashtra on the compulsory acquisition of assessee s land, the assessee is entitled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l area of Jalna. The AO treated the said land as non-agricultural land within the meaning of provisions of section 2(14)(iii)(b) of the Act. Further, he found that the assessee did not utilize the amount of capital gain in purchasing of new asset before filing of return of income u/s. 139(1) of the Act, even not deposited in any capital gains accounts scheme. The assessee contended that he is illiterate, no knowledge of Income Tax technicalities but taken FDR. Having not satisfied with the contention of the assessee, the AO proceeded to deny exemption u/s. 54B of the Act. Further, he disallowed improvement cost for non-filing of documentary evidence. Before the CIT(A), I find the same contention was reiterated by the assessee in support of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lities, therefore, I am unable to subscribe to the view of AO that the barren land is a non-agricultural land. Admittedly, the compensation granted by the Government of Maharashtra for compulsory acquisition of land is non-taxable, but however an incorrect deduction u/s. 54B of the Act was claimed which was denied only on the ground that no deposits were made in the capital gains accounts. 6. I find Shri S.N. Puranik, CA filed paper book containing 40 pages, on perusal of the same 7/12 extract of assessee s agricultural land is provided at page 4. According to which it is noted that the said land was in cultivation from 2002-03 to 2007-08. The ld. DR did not dispute the same. Though it was alleged as barren land, was in cultivation durin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tra for compulsory acquisition of assessee s land is actually non-taxable u/s. 10(37) of the Act. It is noted that no claim or whatsoever claimed in this regard before the AO. As discussed above, the AO proceeded on the premise of claim made by the assessee u/s. 54B of the Act. I note that the fact of compulsory acquisition of assessee s land by the Government of Maharashtra for the purpose of MIDC is not disputed and the compensation thereon is non-taxable u/s. 10(37) of the Act. 8. Section 10 of the Act describes income not included in total income. Sub-section (37) of section 10 of the Act was inserted by Finance Act 2 of 2004 and came into effect from 01-04-2005. Sub-section (37) of section 10 provides exemption on capital gain arisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot chargeable under the head Capital Gains arising from transfer of agricultural land, therefore, do not form part of total income of the assessee. In this regard, it is noted the notarized affidavit dated 06-05-2019 at page 39 of the paper book was filed before this Tribunal by Shri Ganpat Mohanrao Shinde who is the co-owner of agricultural land at Gate No. 57, Nagewadi, Jalna along with the assessee. He deposed that he did not engage in any agricultural activity because of land of rain/insufficient rain, but however, the assessee cultivated this land for all years before acquisition by MIDC. Further, I find notarized affidavit dated 06-05-2019 deposed by the assessee at page 40 of the paper book. On perusal of the same, I note that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Maharashtra of compulsory acquisition as non-taxable, offered the capital gains to tax by claiming deduction u/s. 54B of the Act. As held by the Hon ble High Court of Bombay that the authorities under the Act are required to assist the assessee in the assessment proceedings by giving effect on the correct position of law, even if the assessee makes wrong claim. Therefore, the compensation derived from the Government of Maharashtra on the compulsory acquisition of assessee s land, the assessee is entitled to claim the same as exempted u/s. 10(37) of the Act. Thus, the order of CIT(A) in confirming the view of AO in denying the deduction u/s. 54B of the Act is not justified and the addition made thereon is deleted. Thus, the grounds raised ..... X X X X Extracts X X X X X X X X Extracts X X X X
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