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| The Tax Publishers2020 TaxPub(DT) 1792 (Ahd-Trib) INCOME TAX ACT, 1961
Section 10(37) Section 45
Where agricultural land was compulsorily acquired by govt., from assessee and prescribed procedures under Land Acquisition Act was also followed. Merely because the compensation amount was agreed upon later on would not change the character of acquisition, from that of compulsory acquisition to the voluntary sale, the assessee was therefore, eligible for exemption under section 10(37).
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Capital gains - Exemption under section 10(37) - Transfer of property on compulsory acquisition - Settlement of compensation agreed upon later on
Assessee contended that AO did not allow exemption under section 10(37) and also CIT(A) ought to have held that transfer of property having been made compulsory acquisition, the assessee would be entitled to exemption under section 10(37) and thereby confirming addition on account of long-term capital gain treating sale of agricultural land.Held: Insofar as acquisition of the land was concerned, the same was compulsorily acquired as the entire procedure prescribed under the LA Act was followed. The settlement took place only qua the amount of the compensation which was to be received by the appellant for the land which had been acquired. It goes without saying that had steps not been taken by the Government under sections 4 & 6 followed by award under section 9 of the LA Act, the appellant would not have agreed to divest the land belonging to him to Techno Park. He was compelled to do so because of the compulsory acquisition and to avoid litigation entered into negotiations and settled the final compensation. Merely because the compensation amount was agreed upon would not change the character of acquisition, from that of compulsory acquisition to the voluntary sale. It may be mentioned that this is now the procedure which is laid down ever, under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 as per which the Collector can pass rehabilitation and resettlement award with the consent of the parties/land owners. Nonetheless, the character of acquisition remains compulsory. Accordingly, the assessee was eligible for exemption under section 10(37).
Followed:Shri Satish M. Patel and 22 others Group Cases v. Dy. CIT Circle 2(3) Surat, ITA No. 1566/Ahd/2016, dated 13-12-2019 for assessment year 2009-10.
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2009-10
IN THE ITAT, AHMEDABAD BENCH
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