Case Law Details
Parasnath Vinimay Pvt. Ltd. Vs CPC (ITAT Kolkata)
Introduction: This article discusses the case of Parasnath Vinimay Pvt. Ltd. vs. CPC (ITAT Kolkata) where the issue at hand is the income tax exemption on an award received for the compulsory acquisition of agricultural land. The Income Tax Appellate Tribunal (ITAT) Kolkata rendered a decision, and we will analyze the arguments and findings in this case.
Analysis: The appellant, Parasnath Vinimay Pvt. Ltd., contested an order by the National Faceless Appeal Centre under the Income Tax Act, 1961. The appeal focused on the treatment of compensation received for the compulsory acquisition of agricultural land as taxable income. The appellant referred to the CBDT circular and provisions of the RFCTLARR Act to claim exemption.
The ITAT Kolkata analyzed Section 96 and 46 of the RFCTLARR Act and the CBDT circular to determine the applicability of income tax on the compensation received. They observed that no distinction was made between compensation for agricultural and non-agricultural land in the exemption provided under Section 96 of the RFCTLARR Act. The Tribunal found that the appellant’s case did not fall under Section 46 of the Act, and thus, the compensation was exempt from income tax.
Conclusion: In conclusion, the ITAT Kolkata ruled in favor of Parasnath Vinimay Pvt. Ltd., stating that the compensation received for the compulsory acquisition of agricultural land was exempt from income tax. The decision was based on the provisions of the RFCTLARR Act and the CBDT circular. This case sets a precedent for income tax exemption on awards related to the compulsory acquisition of agricultural land.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
