TMI Blog2024 (4) TMI 1109X X X X Extracts X X X X X X X X Extracts X X X X ..... ny award or agreement made under this Act. Subsequently, the Tamilnadu Government had amended the RFCTLARR Act, 2013 by inserting Sec. 105A vide RFCTLARR (Tamilnadu Amendment Act), Act, 2015 which placed these State land acquisition acts in a newly created fifth schedule on par with the Central Enactment, which are listed in the fourth schedule and have been exempted from the purview of RFCTLARR Act, 2013 except with respect to compensation, rehabilitation and resettlement Tamilnadu State Assembly has enacted Tamilnadu Land Acquisition Law (Revival of Operation, Amendment and Validation) Act, 2019 on 15.12.2019 in order to revive the operation of the Tamil Nadu Highways Act, 2001 which had ceased with effect from 27.09.2013 to exist due to enactment of RFCTLARR Act, 2013 as they were guided by Land Acquisition Act, 1894. As per Sec. 1(2) of TNLAL (ROAV) Act, 2019, aforementioned act has been given retrospective effect from 26.09.2013. As per Sec. 10 of TNLAL (ROAV) Act, 2019, compensation needs to be determined by the RFCTLARR Act, 2013 when the land is acquired under the Tamil Nadu Highways Act, 2001. RCTLARR, Act, 2013 has been notified only with effect from 01.01.2014. The provi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e grounds, on merits, stand partly allowed. - Hon ble Shri Mahavir Singh, VP And Hon ble Shri Manoj Kumar Aggarwal, AM For the Appellant : Shri T.S. Lakshmi Venkataraman (FCA) -Ld. AR For the Respondent : Shri AR V Sreenivasan (Addl. CIT) - Ld. DR ORDER MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1.1 Aforesaid appeal by assessee for Assessment Year (AY) 2014-15 arises out of the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] dated 09-02-2023 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Act on 28-12-2016. The grounds raised by the assessee read as under: 1. The order of Commissioner of Income Tax (Appeals), NFAC dated 09.02.2023 in confirming the assessment framed by the AO is opposed to the facts of the case and is not legally maintainable. 2. On the facts and circumstances of the case, the first appellate authority is not justified in confirming the action of the AO in bringing to tax under the head long term capital gains in respect of property to an extent of 76.41 cents acquired under the land acquisition act, which has been judicially settled that gains arising out of such c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tirupur (in short Tirupur property) for Rs. 30 Lacs on 21.12.2005. During this year, a portion of land to the extent of 76.41 cents was acquired by Land Acquisition officer District Revenue officer (LAO DRO), Tirupur on compulsory acquisition for compensation of Rs. 255.88 Lacs. The assessee admitted capital gains by taking cost of the property as Rs. 119.90 Lacs as against actual cost of Rs. 30 Lacs. The said amount of Rs. 119.90 Lacs was nothing but value fixed by registration authority. However, Ld. AO rejected the same on the ground that Sec. 50C is a deeming provision and applicable to seller only for computation of capital gains. The assessee being buyer could not adopt the said valuation as cost of acquisition. The assessee supported its stand by taking cue from Sec. 43CA as introduced by Finance Act, 2013 as well as Sec. 56(2)(viib) as inserted by Finance Act, 2010 w.e.f. 01.04.2009. However, Ld. AO rejected the plea of the assessee and arrived at proportionate indexed cost of Rs. 65.21 Lacs as against Rs. 187.12 Lacs as computed by the assessee. 2.2 The assessee also claimed cost of improvement for Rs. 22.84 Lacs on account of filling and leveling of the land in this year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m the purview of RFCTLARR Act, 2013 except with respect to compensation, rehabilitation and resettlement. However, RFCTLARR (Tamilnadu Amendment Act) Act, 2015 has been declared as null and void by Hon ble High Court of Madras in the case of The Caritas India vs. UOI. Subsequently, Tamilnadu State assembly has enacted Tamilnadu Land Acquisition Law (Revival of Operation, Amendment and Validation) Act, 2019 on 15.12.2019 in order to revive the operation of the Tamil Nadu Highways Act, 2001 which had ceased with effect from 27.09.2013 to exist due to enactment of RFCTLARR Act, 2013 as they were guided by Land Acquisition Act, 1894. As per Sec. 1(2) of TNLAL (ROAV) Act, 2019, the above three acts including Tamil Nadu Highways Act, 2001 has been given retrospective effect from 26.09.2013. As per Sec. 10 of TNLAL (ROAV) Act, 2019, compensation needs to be determined by the RFCTLARR Act, 2013 when the land is acquired under the Tamil Nadu Highways Act, 2001. From the facts, it is evident that even through the RFCTLARR Act, 2013 had been notified with effect from 01.01.2014, the provisions with respect to compensation, rehabilitation and resettlement have come into force with effect from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect to compensation, rehabilitation and resettlement. The provisions of Sec. 105-A provide as under: - (1) Subject to sub-section (2), the provisions of this act shall not apply to the enactments relating to the land acquisition specified in fifth schedule. (2) The State Government shall, by notification, within one year from the date of commencement of this act, direct that any provisions of this Act, relating to the determination of compensation in accordance with the first schedule and rehabilitation and resettlement specified in the second and third schedules, being beneficial to the affected families, shall apply to the cases of land acquisition under the enactments specified in the Fifth Schedule or shall apply with such exceptions or modifications that do not reduce the compensation or dilute the provisions of this Act relating to compensation or rehabilitation and resettlement as may be specified in the notifications, as the case may be. The fifth schedule, inter-alia, include The Tamil Nadu Highways Act, 2001 (Tamil Nadu Act 34 of 2002). This enactment has come into force on 01.01.2014. The provisions of Sec. 105-A came into challenge before Hon ble High Court of Madras i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red for the purpose specified in sub-section (1) of section 15 of the 2002 Act and any such land shall be acquired by the Government only in accordance with the provisions of the 2002 Act. It could thus be seen that only provisions relating to compensation, rehabilitation and resettlement has been made applicable to the State Act and therefore, the provisions of Sec. 10 have limited applicability. The provisions of Sec. 11 specifically exclude the application of provisions of RFCTLARR Act. Undisputedly, the compensation has been received by the assessee is under a state act and not under RFCTLARR Act. Nothing has been shown that the benefit of RFCTLARR Act has ever been extended to the State Government by any notification, directly or impliedly. As held by Agra Tribunal in para-18 of its order in the case of Jagdish Arora vs. ITO (127 Taxmann.com 728), the exemption is required to be specifically granted by the statute and it cannot be inferred to be drawn. Another pertinent fact that could be noted is that the date of award of compensation as well as date of compensation received by the assessee fall before 01.01.2014 i.e., the date on which RFCTLARR Act came into effect. Therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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