Case Law Details
Mattapalli Ram Kumar Vs ACIT (ITAT Vishakhapatanam)
It is undisputed fact that the assessee had received compensation of Rs.1,33,88,000/- under compulsory acquisition of land under RFCTLARR Act. The Ld. Counsel for the assessee has heavily relied on the Circular 36/2015 dated 25.10.2016 issued by the CBDT, wherein, it was mentioned that income tax shall not be levied on any award or agreement made (except those made under section 46) under the RFCTLARR Act. Therefore, compensation received for compulsory acquisition of land under the RFCTLARR Act (except those made under section 46 of RFCTLARR Act), is exempted from the levy of income-tax. On perusal of the para 2 of the Circular, it is not covered u/s 46 of the RFCTLARR Act. We have also perused the provision of section 96 of the RFCTLARR Act. For the sake of convenience, we extract the provision of section 96 as follows :
“96. Exemption from income-tax, stamp duty and fees. – No income tax or stamp duty shall be levied on any award or agreement made under this Act, except under section 46 and no person claiming under any such award or agreement shall be liable to pay any fee for a copy of the same.”
Therefore, after considering the above said provision, if any compensation received under RFCTLARR Act, income tax shall not be levied on any award or agreement. We have also perused the land acquisition proceedings and the lands were acquired under RFCTLARR Act. Therefore, as per the CBDT Circular and as per section 96 of RFCTLARR Act, income tax shall not be levied. We are of the firm view that the compensation amount which was received by the assessee for an amount of Rs.1,33,88,000/- should not be suffered for capital gains tax.
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