TMI Blog2023 (1) TMI 220X X X X Extracts X X X X X X X X Extracts X X X X ..... n the application of section 96 of the RFCTLAAR Act has no merit and deserves to be set aside. Our view is further supported by the decision of the co-ordinate bench (ITAT Agra) in the case of Shri Krishna Kumar Sharma [ 2021 (3) TMI 561 - ITAT AGRA] which has been relied on by the ld. Departmental Representative. Compensation is an exempt income u/s. 10(37) - We find that the assessee in order to avail the exemption under the said section needs to fulfill the four ((i) to (iv) conditions. So far as (iii) (iv) conditions are concerned, which speaks about compulsory acquisition under any law as determined or approved by the Central Government or the Reserve Bank of India, if the consideration is received by such assessee on or after the 1st day of April, 2004, the same are duly fulfilled in the case of assessee as there is no dispute to this fact at the end of Revenue. Now as far as first two ( i ii ) conditions are concerned, which provides that the land in question is an agricultural land and it has been used for the purpose of agriculture for the immediately two years, we observe that during the course of assessment proceedings AO deputed an inspector to enquire as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the said Act is applicable in the case of the assessee without there being an' supporting evidence or claim made by the assessee during the appellate proceeding or in the assessment proceedings before the AO. (ii) On the facts and in the circumstances of the case, the Ld. CIT(A) erred in law by granting relief of Rs. 1,04,58,374/- on account of long term capital gain arising out of compensation against the land acquisition. The addition was based on the basis of information received from District Land Acquisition Officer which is a land enforcing agency / department and as such the case is covered under exceptions clause specified in Board's letter bearing F. No.279/Misc. 142/2007-ITJ (Pt) dated 20.08.2018. (iii) Any other grounds that may be urged at the time of hearing. Grounds raised by the assessee in the Cross Objection: 1. For that the instant appeal is completely bar by the Notification No. 17/2019 Dt.08th August 2019 issued by the Central Board of Direct Taxes as Tax effect is below of monetary limit of Rs.50.00 Lacs and on this ground alone instant appeal is liable for dismiss in limine. 2. For that the first ground of appeal taken by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... before the ld. CIT(A):-: 1. That the above appeal is directed against the demand notice issued by Income Tax Officer Ward 4(4), Patna dated 27.12.2016 in which the following disputes arise for adjudication which are as under:- whether compensation received on account of compulsory acquisition of land by the Government is taxable or not in the hands of appellant assessee. 2. That the appellant assessee is an agriculturist and filed his return of income on 26-06-2014 showing total income at @ Rs. 92,350 only. The source of Income was income from other source only. 3. That the appellant assessee has agricultural land which was ancestral and the only sources of income was cultivation of land. 4. That the Government of Bihar vide its notification no. 3043 dated 30-12-2013 has acquired the said land for construction of building for ITBP Department and paid compensation to the tune of Rs. 1,04,58,374/- only @ 3,25,000/- per decimal. 5. That Government of Bihar has paid the compensation amount under the category Agricultural progressive land whenever the commercial and residential rate are much higher than agricultural progressive land. Therefore, it is cr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nting to Rs. 1,04,58,374/- on the compensation of Rs. 10458374/- being received by the assessee against compulsory acquisition of agricultural land by Department of Government of India which was claimed exemption. The Assessing Officer has stated that information was received from I CI which the land acquisition officer has shown the land as a residential land and the assessee has been paid .a sum of Rs.10468374/- as compensation for land acquisition during the F.Y. 2013- 14. The A.O under misconception of fact has stated that as per the information given by the land acquisition -- officer the ' land is questioned is Residential . On the facts and circumstances of the A.O has erred in computed the alleged LTCG under misconception of the provision. of relating to LTCG has determined the LTCG at Rs. 1,04,58,374/-. 7. On the other hand the ld. DR supported the order of the ld. AO and placed reliance on the documents enclosed in the paper book. 8. We have heard the rival contentions and perused the records placed before us. We notice that Office of Directorate of Land Acquisition, Department of Revenue Land Reforms, Government of Bihar, Patna sanctioned a fund for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r:- Under the existing provisions of the Income Tax Act, 1961 an agricultural land which is not situated in specified urban area is not regarded as a capital asset. Hence, capital gain arising from the transfer (including compulsory acquisition) of such agricultural land is not taxable. Finance (No.2 Act, 2004 inserted section 10(37) in the act from 01.04.2005 to provide specific' exemption to the capital gains arising to an individual or HUF from compulsory acquisition of an agricultural land situated in specified urban limit, subject to fulfillment of certain conditions. Therefore, compensation received from compulsory acquisition of an agricultural land is no taxable under the Act (Subject to fulfillment of certain conditions for specified urban land. The RFCTLAAR Act which came into effect from 1st January, 2014 in section 96, inter-alia provides that income tax shall not be levied on any award or agreement made( except those made u/s 46) under RFCTLAAR Act'. Therefore, compensation received for compulsory acquisition of land under the RFCTLAARAct (except those made u/s 46 of RFCTLAAR Act) is exempted from the levy of income tax. As no distinction has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. Regarding the observation of the ld. CIT(A) that the said sum is not taxable in view of the RFCTLAAR Act, we do not find any merit because the said Act i.e Right To Fair Compensation And Transparency in Land Acquisition, Rehabilitation and Settlement Act 2013 came into force w.e.f 1.1.2014 whereas alleged compensation was received by the appellant as mentioned in Form 16A showing deduction of tax at source on 24-10-2013 which clearly shows that alleged compensation was received prior to the effective date of RFCTLAAR Act and therefore, the relief granted by the ld.CIT(A) based on the application of section 96 of the RFCTLAAR Act has no merit and deserves to be set aside. Our view is further supported by the decision of the co-ordinate bench (ITAT Agra) in the case of Shri Krishna Kumar Sharma Vs. DCIT, ITA No. 173 of 2019 dt. 14-06- 2021 which has been relied on by the ld. Departmental Representative. 11. Now as far as first observation of ld. CIT(A) and contended by the Ld. Counsel for the assessee that the alleged compensation is an exempt income u/s. 10(37) of the Act, we will first go though the relevant provisions of Section 10(37) of the Act, which reads as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e an agricultural land. Dhanhar land is said to be low land during rainy season. Reference was made to Bihar Visesh Survey page 5 in Chapter XVIi page 211 defining dhanhar fasal land having three categories, A,B C i.e Dhanhar I, Dhanhar II and Dhanhar III. Reference was further made to Bihar Tenancy Act, 1885, wherein Dhanhar has been defined as land cropped in winter. Reference also made through documents filed in paper book defining Dhanahar as irrigated land where rice is cultivated for kheti. Above discussion on Dhanhar land brings us to the conclusion that the said land owned by the assessee is an agricultural land and was used for the purpose of agriculture in the past. Therefore, since all the conditions mentioned in section 10(37) of the Act are fulfilled, we are of the opinion that the alleged land for which compensation has been received by the assessee qualifies for exemption u/s. 10(37) of the Act. To this extent the finding of the ld. CIT(A) is confirmed. Thus, the revenue fails to succeed in this appeal. 14. Now coming to Cross Objection ( 01/Pat/2021 arising out of ITA No. 102/Pat/20 for the AY 2014-15) 15. As far as grounds raised by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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