AHAMEDPILLAI AHAMEDKUTTY,ERNAKULAM V. THE INCOME TAX OFFICER, ERNAKULAM

ITA 603/COCH/2023

AI Insights

The case involves Sri. Ahamedpillai Ahamedkutty, who received compensation of Rs.60,38,000 from Cochin Metro for the compulsory acquisition of 29.95 acres of land during the financial year 2014-2015. Initially, the compensation was disclosed as a capital gain and offered for taxation. However, the assessee later claimed the compensation was exempt as the land was agricultural and outside the municipal limit, supported by a certificate from the Agriculture Officer. The Assessing Officer rejected this claim, leading to an appeal before the Commissioner of Income-tax (Appeals), which was also unsuccessful. The Tribunal, referencing several precedents, found that the land's agricultural status at the time of acquisition justified the exemption of the received compensation from tax.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 471674 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2014-2015
• Other Referred Cases: Harsha V. Milani v. JCIT, DCIT v. M.Kalyan Chakravarthy, Lovleen Singhal v. DCIT, Hindustan Industrial Resources Vs ACIT
• Laws Referred To: CBDT Circular No.36/2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: MATHEW JOSEPH

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member & Shri Prakash Chand Yadav, Judicial Member ITA No.603/Coch/2023 : Asst.Year 2014-2015 Sri.Ahamedpillai Ahamedkutty Kadavil House, Edappally Ernakulam – 682 024. PAN : ACNPA8333R. v. The Income Tax Officer Ward 1(3) Ernakulam. (Appellant) (Respondent) Appellant by : Sri.Mathew Joseph, CA Respondent by : Smt.Leena Lal, Sr.AR Date of Hearing : 09.01.2025 Date of Pronouncement : 22.01.2025 O R D E R Per Prakash Chand Yadav, JM : The present appeal of the assessee is arising from the order of the learned Commissioner of Income-tax (Appeals) dated 23rd June, 2023 and it relates to the assessment year 2014-2015, having DIN & Order No.ITBA/NFAC/S/ 250/2023- 24/1053908892(1). 2. The brief facts as coming out from the orders of the authorities below are that the assessee is an individual. The assessee has received compensation of Rs.60,38,000 during the financial year under consideration from Cochin Metro with respect to compulsory acquisition of 29.95 acres of land. The assessee has filed return of income on 16thFebruary, 2015. During the course of assessment proceedings, the Assessing ITA No.603/Coch/2023. Sri.Ahamedpillai Ahamedkutty. 2 Officer observed that the assessee has received an amount of Rs.60,38,000 from Cochin Metro Rail Product. The A.O. further observed that initially the assessee has disclosed this as capital gain and offered the amount for taxation. However, later on the assessee claimed the same as exempt on the ground that the land was situated outside the Municipal limit. The assessee has also furnished a certificate with the A.O. issued by Agriculture Officer in support of his contention. The A.O. discarded the contention of the assessee on the ground that the land was not cultivated for a long time and hence the certificate issued by the Agriculture Officer is of no use. Accordingly, the A.O. taxed this amount and framed the assessment. 3. Aggrieved with the order of the A.O., the assessee filed appeal before the ld.CIT(A) and made two contentions, viz., (a) the land was agricultural land and situated outside the Municipal limit, and (b) the compensation received by the assessee is not taxable in view of the CBDT Circular No.36/2016 dated 25thOctober, 2016. However, the ld.CIT(A) discarding the submissions of the assessee, affirmed the order of the A.O. 4. Aggrieved with the order of the ld.CIT(A), the assessee has come up in appeal before us. The learned Counsel appearing on behalf of the assessee reiterated his submissions made before the lower authorities. ITA No.603/Coch/2023. Sri.Ahamedpillai Ahamedkutty. 3 5. The learned Departmental Representative relied upon the orders of the authorities below. 6. We have heard the rival submissions and perused the material available on record. Having regard to the facts of the case, it is abundantly clear that the character of the land was agricultural in nature at the time when it was acquired. Therefore, merely because the said land was not cultivated for a long time cannot be a ground to discard the claim of the assessee. Our view is fortified by the judgment of the co- ordinate benches in following cases: - (i) Harsha V. Milani v. JCIT reported in 111 TTJ 310 (Pune) (ii) DCIT v. M.Kalyan Chakravarthy ITA No.729/Hyd/13 dated 24th October, 2014. (iii) Lovleen Singhal v. DCIT reported in 111 TTJ 326. (iv) Hindustan Industrial Resources Vs ACIT- 335 ITR 77(Del) 7. Besides these above case laws, there are so many other cases, wherein it has been held that if the character of land is agricultural in nature, then the compensation received in lieu of such land is exempt. Therefore, we are of the view that the lower authorities are not correct in discarding the claim of the assessee. Since we have already decided the appeal on this issue, the issue of applicability of CBDT Circular No.36/2016 dated 25th October, 2016, would become academic and hence we deem it appropriate not to deal with it. 8. In the result, the appeal filed by the assessee is allowed. ITA No.603/Coch/2023. Sri.Ahamedpillai Ahamedkutty. 4 Order pronounced on this 22nd day of January, 2025. Sd/- (Inturi Rama Rao) Sd/- (Prakash Chand Yadav) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin; Dated : 22nd January, 2025. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "