Case Law Details
ITO Vs Suresh Prasad (ITAT Patna)
CBDT vide Circular No. 36/2016 dt. 25/10/2016 clarified that the compensation received in respect of award or agreement which has been exempt from levy of Income Tax vide section 96 of the RFCTLARR Act shall also not be taxable under the provisions of Income Tax Act, 1961 even if there is no specific provisions of exemption for such compensation in the Income Tax Act, 1961. In the said Circular it is also clarified that no distinction had been made towards compensation received for compulsory acquisition of agricultural land and non agricultural land in the matter of providing exemption from income Tax under the RFCTLARR Act. In the instant case the assessee received compensation for compulsory acquisition of commercial land during the F.Y. 2014-15 which was exempted under section 96 of the RFCTLARR Act, as clarified by the CBDT Circular No. 36/2016 dt. 25/10/2016.
ITAT held that whole of the capital gain arising on transfer of land by way of acquisition by the State Government is not taxable and additions made by AO by computing LTCG and disallowing exemption u/s 10(37) of the Income Tax is not sustainable.
FULL TEXT OF THE ORDER OF ITAT PATNA
The present appeal has been preferred by the revenue against the order of ld. CIT(A), Patna-2 dated 06.06.2018 [hereinafter referred to as ‘CIT’] passed u/s 250 of the Income Tax Act (hereinafter referred to as the ‘Act’). The revenue in this appeal has taken the following grounds of appeal:
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what is the tax impact on aquisition of non agricultural land belonging to an Educational Institution which is Registered under Co-operative Act as an Association of Persons by the Government for development of National Highway