Raipur Realty Pvt. Ltd. Vs ITO (ITAT Raipur)
Compensation under National Highways Act exempt – RFCTLARR shield extends to NHAI acquisitions- Uniform relief to land-losers—ITAT Raipur declares NHAI award non-taxable under s. 96
This appeal was a remand matter from the Chhattisgarh High Court (TAXC No. 228/2024 dated 05-05-2025), directing ITAT Raipur to decide on merits whether ₹ 65,04,107 received b Assessee as compensation for land acquired by NHAI under the National Highways Act, 1956 is taxable.
Assessee, engaged in real-estate business, had declared NIL income for A.Y. 2017-18. Its lands were compulsorily acquired under the National Highways Act, 1956. It claimed exemption u/s 10(37) r.w.s. 96 of the Right to Fair Compensation & Transparency in Land Acquisition, Rehabilitation & Resettlement Act, 2013 (RFCTLARR Act). AO accepted the return, but PCIT invoked s. 263, holding the exemption untenable. The assessment was set aside; AO again disallowed exemption & added ₹ 65,04,107, which CIT(A) & ITAT initially upheld.
On further appeal, the High Court set aside ITAT’s earlier order (28-06-2024) holding that the Tribunal had failed to decide the core question-whether the compensation from NHAI was taxable-& remitted the matter for decision on that issue.
Substantial issue
Whether Section 96 of RFCTLARR Act, which exempts compensation from income-tax, stamp duty & fees, applies to acquisitions under the National Highways Act, 1956 (an enactment listed in the Fourth Schedule of RFCTLARR Act).
