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Balakrishnan v. UOI & Ors.

 

INCOME TAX ACT, 1961

--Exemption under section 10(37)--Compulsory acquisition of agricultural landCompensation thereagainst agreed by assessee--Assessee was the owner of agricultural land. State Government sought to acquire the land of assessee. After certain negotiations on the amount of compensation, assessee agreed to execute the sales deed. TDS amount was deducted on said compensation, but was refunded by Revenue on the ground that no capital gain tax was payable on transfer of agricultural land, by way of compulsory acquisition under any law. However, later, reassessment proceedings were initiated against assessee on the ground that the same was voluntary transfer and therefore, the provisions of section 10(37) were applicable.Held: As far as the acquisition of the land was concerned, assessee had succumbed to the action taken by the Government in this behalf. He was put in such a condition that he knew that his land would be acquired and he could not reiterate the same. Therefore, he only wanted to salvage the situation by receiving as much compensation as possible commensurate with the market value thereof and in the process avoid the litigation so that compensation could be received well in time. Thus, if for this purpose assessee had entered into the negotiations, such negotiations would be confined to the quantum of compensation only and would not change or alter the nature of acquisition that would remain compulsory.

Income Tax Act, 1961 Section 10(37)

Income Tax Act, 1961 Section 147



IN THE SUPREME COURT OF INDIA

A.K. SIKRI & R.K. AGRAWAL, JJ.

Balakrishnan v. Union of India & Ors

Civil Appeal No. 1607/2010 (Arising out of Special Leave Petition(C) No(s). 19367/2014)

11 January, 2017

Petitioner by: K. Radhakrishnan, Sr. Adv. Ms. Kiran Bhardwaj, Adv.

Respondent by: H.R. Rao, Adv. Ms. Niranjana Singh, Adv. Mr. Arijit Prasad, Adv. Mr. R.M. Bajaj, Adv. Mrs. Anil Katiyar, Adv.

JUDGMENT

A.K. Sikri, J.

Leave granted.

Heard the matter finally at this stage with the consent of the parties as it was fixed for final disposal.

The question of law that is raised in this appeal and squarely arises for consideration is the following:

Whether, on the facts and circumstances of the case, the High Court was justified in denying the claim for exemption under section 10(37) of the Income Tax Act, 1961 to the appellant?

This question has arisen under the following circumstances: The appellant was the owner of 27.70 Acres of land in Sy. No. 18.60 hectares of paddy field in Block No. 17 of Attippra village in Thiruvananthapuram District comprised in Sy. No. 293/8. This was agricultural land. The appellant was using the same to grow paddy.

The Government of Kerala sought to acquire the aforesaid property of the appellant for the public purpose namely, '3rd phase of development of Techno Park'. For this purpose, Notification under section 4(1) of the Land Acquisition Act, 1894 (hereinafter referred to as the 'LA Act') was issued on 1-10-2005. An opportunity was given to the appellant to file his objections, if any, under section 5A of the LA Act. Record does not reveal as to whether such objections were filed

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