Interest on enhanced compensation for compulsory acquisition of agricultural land eligible for exemption U/s. 10(37)

By Editor4 Income Tax Judiciary June 1, 2018 1 comment

TaxGuru Citation: 2018 taxguru.in 1794
Case Name: ITO Vs Shri Basavaraj M Kudarikannur (ITAT Bangalore)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Related Assessment Year: 2013-14
Courts: All ITAT, ITAT Bangalore

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ITO Vs Shri Basavaraj M Kudarikannur (ITAT Bangalore)

We have considered the submissions of the ld. DR. It is not disputed by the AO that the land acquired was agricultural land and the conditions laid down u/s. 10(37)(i) to (iv) are applicable to the land which is in question which was compulsorily acquired. It is also not in dispute that the interest in question was interest awarded u/s. 28 of the Land Acquisition Act, 1894.

ITAT held that Where assessee was awarded interest under section 28 of Land Acquisition Act, 1894, on enhanced compensation paid for compulsory acquisition of agricultural land, the same was eligible for exemption under section 10(37) because the interest received was a part of the enhanced value of the land.

FULL TEXT OF THE ITAT JUDGMENT

These are appeals filed by the revenue against two different orders, both dated 16.06.2017 of the CIT(Appeals), Belagavi relating to assessment year 2013-1 4.

2. The facts and circumstances under which these appeals arise for consideration are identical. These appeals were heard together and we deem it convenient to pass a consolidated order.

3. Despite service of notice, none appeared on behalf of the respondents in these two appeals. We therefore proceed to decide the appeals after hearing the submission of the ld. DR.

4. The facts under which these appeals arise for consideration are as follows. An extent of 5 acres 26 guntas in Sy.No.1 1/1 at Haveli, Bagalkot was compulsorily acquired by the Special Land Acquisition Officer [hereinafter referred to as “the SLAO”], Bagalkot under the provisions of the Land Acquisition Act, 1894 vide Notification dated 29.07.2000. There were five co-owners of the land so acquired. The assessee in ITA No.1744/B/1 7 is a legal heir of a deceased co-owner holding 1/5^th share over the land acquired by the Govt. The assessee in ITA No.1750/B/17 is a co-owner who held 1/5^th share in the land acquired by the Govt. Aggrieved by the award as originally passed awarding compensation for the land acquired by the Govt., the co-owners had filed a reference for enhanced compensation. The SLAO, Bagalkot vide order dated 23.06.2012 awarded enhanced compensation and interest which was paid on 18.05.2012. The details of enhanced compensation and interest on enhanced compensation awarded is as follows:-