Smt. Girijakumari M. Vs ITO (ITAT Cochi)
Compensation for compulsory acquisition of urban agricultural land eligible for section 10(37) benefit
The assessee’s 70 cents of land at Vizhinjam Village was notified for compulsory acquisition by Government of Kerala for developing Vizhinjam International Seaport. Though the acquisition proceedings were taken under the Land Acquisition Act, the final price was fixed upon negotiated sale agreement. The Assessing Officer has allowed the claim of the assessee for deduction u/s 54B of the I.T.Act. Section 54B of the I.T.Act provides for a deduction on account of transfer of land used for agricultural purpose and for purchase of another agricultural land. Therefore, admittedly, when deduction has been granted u/s 54B of the I.T.Act, the A.O. also categorically admitted that the land sold was an agricultural land. The A.O., however, noticed that the land was within Trivandrum Municipal Corporation, and therefore, would be an urban agricultural land falling within the provisions of section 2(14)(iii) of the I.T.Act. The only reason for the A.O. to deny the benefit of section 10(37) was that the impugned land was acquired by executing a sale deed in favour of Vizhinjam International Seaport and it was not a case of compulsory acquisition. The Hon’ble Apex Court in the case of Balakrishnan v. Union of India & Others (supra) had categorically held merely because the sale price was fixed through a negotiated settlement, the character of acquisition would still remain compulsory.
