Case Law Details
A. Nagarajan Vs ITO (ITAT Chennai)
Upon careful consideration of factual matrix, it emerges that the assessee’s land has been acquired by NHAI for which the assessee has been compensated at certain rates. On one of the parcels of land, a farm house is situated for which separate compensation has been paid. The primary argument of Ld. AR is that the farm house also partakes the character of agricultural land for the reason that agricultural income as defined in Sec.2(1A) of the Act would include any income derived from any building owned and occupied by the receiver of the rent or revenue of agricultural land provided the building is on or in the immediate vicinity of the land and is a building which the receiver of the rent or revenue or the cultivator, or the receiver of rent-in-kind, by reason of his connection with the land, requires as a dwelling house, or as a store- house, or other outbuilding. Similar exemption has been provided under the wealth tax act. Therefore, such house appurtenant would be integral to the land and therefore, the compensation should be considered as agricultural income only.
It is undisputed fact that the land under consideration is agricultural land and it has RCC structure for which the assessee has separately been compensated. Nevertheless, this structure, in our considered opinion, was integral to the land which was used for agricultural purposes and could not be separated from the land and therefore, qualifies to be agricultural income. We concur with the arguments advanced by Ld. AR. Merely because the valuation has been done separately, it could not be said that they have separate and independent existence on agricultural land. Therefore, Ld. AO fell in error to deny the exemption as claimed by the assessee.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
1. Aforesaid appeal by assessee for Assessment Year (AY) 2010-11 arises out of the order of learned Commissioner of Income Tax (Appeals), Salem [CIT(A)] dated 29.12.2017 in the matter of assessment framed by the Learned Assessing Officer [AO] u/s. 143(3) r.w.s. 147 of the Act on 30.03.2016. The grounds raised by the assessee read as under:
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