Late Veluben Jalejar Contractor L/h. Barjor Jalejar Contractor, V. The Income tax Officer, Ward-5(2), Baroda

ITA 984/AHD/2006

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5330 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-02-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 29-01-2014
• Assessment Year: 2001-2002
• Appeal Filed On: 21-04-2006
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K C MATHEWS
• Assessee Lawyers: RAJENDRA K SHAH
• Keywords: Capital asset; Proportionate interest
• Section: 143(3); 45(5); 148; 6

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD (BEFORE SHRI D.K. TYAGI, J.M. & SHRI ANIL CHATURVE DI, A.M.) I.T. A. NO. 984 /AHD/2006 (ASSESSMENT Y EAR: 2001-02) LATE SMT. VELUBEN JALEJAR CONTRACTOR L.H. BARJOR JALEJAR CONTRACTOR DISTILLARY COMPOUNDC, PRATAPPURA, SANTRAMPURA. V/S C.I.T. -APPEAL-V, BARODA (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJENDRA. K. SHAH RESPONDENT BY : SHRI K.C. MATHEWS, SR. D.R. ( )/ ORDER DATE OF HEARING : 29-01-2014 DATE OF PRONOUNCEMENT : 07-02-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-V, BARODA DATED 20.12.2005 FOR A.Y. 2001-02. 2. THE RELEVANT FACTS AS CULLED OUT FROM THE MATERI AL ON RECORD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL WHO FILED RETURN OF IN COME FOR A.Y. 2001-02 ON 4.10.2002 DECLARING TOTAL INCOME OF RS. NIL. THE RE TURN WAS INITIALLY PROCESSED UNDER SECTION 143(1). LATER ON THE CASE WAS REOPENE D AND NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 01.12.2003 AND THE ASSESSEE WAS ASKED TO FILE RETURN OF INCOME. IN RESPONSE TO NOT ICE UNDER SECTION 148, NO RETURN WAS FILED BY THE ASSESSEE. THEREAFTER THE AS SESSMENT WAS FRAMED UNDER SECTION 143(3) READ WITH SECTION 148 OF THE A CT VIDE ORDER DATED ITA NO 984/A HD/2006 . A.Y. 2001- 02 2 31.03.2005 AND THE TOTAL INCOME WAS DETERMINED AT R S. 26,44,173/-. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE PREFERRED APPEAL BEFORE CIT(A). CIT(A) VIDE ORDER DATED 20.12.2005 DISMISSED THE AP PEAL OF THE ASSESSEE. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS N OW IN APPEAL BEFORE US AND FILED THE CONCISE GROUNDS OF APPEAL WHICH READS AS UNDER:- 1. CIT(A) HAS ERRED IN LAW IN ASSESSING COMPENSATION I N RESPECT OF AGRI. LANDS BEARING SURVEY NOS. 832 & 873 AS TAXABLE IN SPITE OF HAVING THE EVIDENC ES ON RECORD THE ASSESSMENT ORDER U/S. 143(3) FOR ASST. YEAR 1979-80, ASSESSING THE LANDS AS AGRI . LANDS AND NOT TAXABLE. 2. CIT(A) HAS ERRED IN LAW NOT ACCEPTING THE RATIO OF JUDGMENT OF A.R. DAHIA V/S. ACIT 269 ITR 542 (P & H) ACCORDINGLY ADDITIONAL COMPENSATION IN RESP ECT OF AGRI. LANDS HELD AS NOT A CAPITAL ASSETS PREVIOUSLY BY THE DEPT., CANT BE TAXED I/S. 45(5) OF THE ACT. 3. CIT(A) HAS ERRED IN LAW IN CONSIDERING THAT THE BAL ANCE AMOUNT OF RS. 93,00,000/- WITHHELD BY THE GOVT., AS A PART OF INTEREST LIABLE TO TAX. SINCE ALL THE 3 GROUNDS ARE INTERCONNECTED ALL THE GROUNDS ARE CONSIDERED TOGETHER 4. ON VERIFICATION OF THE RETURN OF INCOME, A.O. NO TICED THAT ASSESSEE ALONG WITH HER HUSBAND AND TWO SONS WERE CO-OWNERS OF CERTAIN PLOTS OF LAND SITUATED AT SANTRAMPUR DISTRICT PANCHMAHALS. DURING THE FINANC IAL YEAR RELEVANT TO THE ASSESSMENT YEAR, ASSESSEE HAD RECEIVED COMPENSATION FROM GOVERNMENT AGAINST COMPULSORY ACQUISITION OF LAND OF THE SAID PIECES OF LAND. THE ASSESSEE WAS ASKED TO CLARIFY IF ANY SOLATIUM AND INTEREST HAD BEEN RECEIVED APART FROM COMPENSATION. BEFORE A.O, IT WAS INTERA LIA SUBMITTED THAT ASSESSEES HUSBAND OWNED THE LAND AND SMALL BUILDIN G AND THE LAND WAS ACQUIRED BY THE GOVERNMENT FOR THE KADANA DAM PROJE CT AND AWARD WAS PUBLISHED ON 04.03.1982 IN THE GAZETTEE. A NOTIFICA TION FOR ACQUISITION WAS PASSED BY LAND ACQUISITION OFFICER ON 15.02.1979. IT WAS FURTHER SUBMITTED THAT THE COMPENSATION AWARDED HAS NOT BEEN ACCEPTED BY THE ASSESSEE AND THE SAME HAS BEEN CONTESTED BEFORE HON. SUPREME COU RT AND THE SAME WOULD BE TAXABLE ONLY ON RECEIPT OF FINAL DECISION OF HON. SUPREME COURT. IT WAS ALSO SUBMITTED THAT THE LAND WAS AN AGRICULTURE LAND AND THEREFORE NOT A CAPITAL ASSET AND THEREFORE THE COMPENSATION RECEIV ED ON COMPULSORY ACQUISITION OF THE SAID LAND WAS NOT LIABLE TO BE T AXED AS LONG TERM CAPITAL GAINS. THE SUBMISSIONS OF THE ASSESSEE WAS NOT FOUN D ACCEPTABLE TO THE A.O ITA NO 984/A HD/2006 . A.Y. 2001- 02 3 FOR THE REASON THAT ON THE SAID LANDS THERE WAS A D ISTILLERY EVEN BEFORE PARTISAN OF INDIA AND THE LANDS WAS IN COMMERCIAL U SED RIGHT UP TO THE DATE OF COMPULSORY ACQUISITION BY THE GOVERNMENT. A.O. FURT HER NOTED THAT THE LAND ACQUISITION OFFICER HAD OBSERVED THAT THE LAND WHIC H WAS ACQUIRED WAS IN A TOWN AND WAS PART AND PARCEL OF SANTRAMPUR AND THE ACQUIRED LANDS WERE BEING UTILIZED AS NON AGRICULTURAL LANDS. A.O. HAS ALSO NOTED THAT THE HON. HIGH COURT IN ORDER NO. 106/AHD/2000 DATED 07.07.20 00 ESTABLISHED THAT THE LAND IN QUESTION WAS COMMERCIAL LAND. HE ACCORDINGL Y HELD THAT THE ACQUIRED LAND TO BE A COMMERCIAL LAND AND THEREFORE A CAPITA L ASSET AND THEREFORE THE COMPENSATION RECEIVED IN LIEU OF COMPULSORY ACQUISI TION OF LAND WAS LIABLE TO TAX AS LONG TERM CAPITAL GAIN. SINCE THE TOTAL COMP ENSATION WAS INCLUSIVE OF SOLATIUM AND INTEREST AT 12% FROM 15.02.1979 AND SI NCE THERE WERE FOUR CO- OWNERS, A.O. WORKED OUT THE SHARE OF ASSESSEE OF CA PITAL GAINS AND INTEREST OF RS. 24,07,947/- AND RS. 2,36,226/- RESPECTIVELY AS PER THE WORKING MADE ON PAGE 8 AND 9 OF THE ASSESSMENT ORDER AND CONSIDE RED IT FOR TAX. AGGRIEVED BY THE ORDER OF A.O., ASSESSEE CARRIED TH E MATTER BEFORE CIT(A). CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE BY HOLD ING AS UNDER:- 5. WITH RESPECT TO THE COMPENSATION, CIT(A) UPHELD THE ORDER OF A.O. BY HOLDING AS UNDER:- 2.2. I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER AND THE CONTENTIONS OF THE APPELLANT. THE FACTS OF THE CASE HAVE BEEN DISCUSSED ABOVE. AS PER THE DECISION OF THE HON'BLE GUJARAT HIGH COURT, THE APPELLANT ALONG WITH HER HUSBAND AND TWO SONS WERE AWARDED TOTAL COMPENSATION OF RS.23646551 FOR THE LANDS ACQUIRED BY THE GO VERNMENT. OUT OF THE ABOVE, COMPENSATION OF RS. 1540431 WAS RECEIVED IN 1979. DURING THE YEAR, C OMPENSATION OF RS. 12806120 WAS RECEIVED. THE COMPENSATION OF RS.9300000 IS YET TO BE RECEIVED. IN VIEW OF THE ABOVE, THE ASSESSING OF FICER HAS WORKED OUT THE COMPENSATION, SOLATIUM A ND INTEREST RECEIVABLE DURING THE CURRENT ASSESSMENT YEAR AT RS.22106120 AS MENTIONED IN PARA GRAPH 2 ABOVE. IT HAS BEEN HELD BY THE ASSESSING OFFICER THAT THE COMPENSATION PLUS SOLATIUM OF RS.7 223843 IS ASSESSABLE IN THE ASSESSMENT YEAR UNDER CONSIDERATION. THIS COMPENSATION PLUS SOLATIUM I S DIVISIBLE AMONGST THE THREE SURVIVING CO-OWNERS O F THE LAND AFTER THE DEATH OF SHRI JAL BAMANSHA CONTR ACTOR, HUSBAND OF THE ASSESSEE. THE ASSESSEE'S SHARE IN THE TAXABLE COMPENSATION PLUS SOLATIUM HAS BEEN WORKED OUT AT RS.2407947 (L/3 RD OF RS.7223843) WHICH HAS BEEN TAXED AS LONG TERM CAPIT AL GAINS BY THE ASSESSING OFFICER. IT HAS BEEN CLAIMED BY THE APPELLANT'S REPRESENTATIVE THAT THE LANDS WHICH HAVE BEEN ACQUIRED ARE AGRICULTURAL LANDS AND THEREFORE, THE COMPENSATION RECEIVED IS N OT LIABLE TO BE ASSESSED AS CAPITAL GAINS. IT HAS BEEN CLAIMED BY THE APPELLANT'S REPRESENTATIVE THAT THE LANDS WERE ACCEPTED AS AGRICULTURAL LANDS IN A.Y.1979-80. IN THIS CONNECTION, IT MAY BE MENTION ED THAT THE DECISION OF THE DEPARTMENT IN THE EARLI ER YEAR IS NOT BINDING ON THE PROCEEDINGS FOR ASSESSME NT DURING THE SUBSEQUENT YEARS. FURTHER, THE ASSESSING OFFICER HAS NOT AT ALL DISCUSSED THE ISSU E IN THE ASSESSMENT ORDER PASSED FOR THE A.Y. 1979- 80. IN THIS CONNECTION, THE ASSESSING OFFICER HAS R EPRODUCED THE OBSERVATIONS OF THE LAND ACQUISITION ITA NO 984/A HD/2006 . A.Y. 2001- 02 4 OFFICER IN PARAGRAPH 5 OF HIS AWARD WITH REGARD TO THE DESCRIPTION AND SITUATION OF THE ACQUIRED LANDS . IN THIS AWARD, IT HAS BEEN CLEARLY MENTIONED THAT T HE ACQUIRED LANDS WERE PART AND PARCEL OF SANTRAMPUR WHICH WERE INCLUDED IN THE DEVELOPMENT M AP. CITY SURVEY OF ALL THE ACQUIRED LANDS WERE CARRIED OUT AND INCLUDED IN THE CITY SURVEY AREA LO NG BACK. THE ACQUIRED LANDS WERE ABUTTING ON THE PUCCA ROAD ON NORTHERN SIDE MEANT FOR SANTRAMPUR-JH ALOD ROAD. RIVER SUKI WAS ON THE EAST AND WEST SIDE. SURROUNDING THE ACQUIRED LANDS THERE WERE RES IDENTIAL HOUSES AND COMMERCIAL AREA WAS ALSO SITUATED ADJOINING TO THE ACQUIRED LANDS. THE ACQUI RED LANDS WERE SITUATED NEAR THE AREA KNOWN AS MAIN BAZAAR IN PRATAPPURA LOCALITY. NEAR THE ACQU IRED LANDS MANY RESIDENTIAL HOUSES, QUARTERS OF GOVERNMENT OFFICERS, GUEST HOUSE WERE SITUATED. IT HAS BEEN MENTIONED IN THE ORDER THAT THE ACQUIRED LANDS WERE BEING UTILIZED AS NON-AGRICULTURAL LANDS AND WERE MOSTLY USEFUL FOR RESIDENCES. IN THIS ORDER, IT HAS ALSO BEEN STATED THAT THE LANDS ACQUI RED WERE OF EVEN LEVEL AND SEVERAL HOUSES WERE CONSTRUCTED ON SOME OF THE PLOTS. THEREFORE, IT IS CLEAR THAT THE ACQUIRED LANDS WERE FULLY DEVELOPED AND WERE HAVING POTENTIALITIES FOR RESIDENTIAL HOUS ES. IN ITS ORDER DATED 07.07.2000 (FIRST APPEAL NO. 106/2000), THE HONBLE HIGH COURT OF GUJARAT HAS AL SO CONSIDERED THE LANDS ACQUIRED AS NON- AGRICULTURAL LANDS. IT WAS ALSO CLAIMED BY THE CLA IMANTS BEFORE THE HONBLE HIGH COURT THAT THE ACQUIRED LANDS WERE ALREADY NON-AGRICULTURAL LANDS (PARA 2.1. OF THE ORDER). IT WAS SUBMITTED BY THE CLAIMANTS THAT THE ACQUIRED LAND WAS KNOWN AS OLD D ISTILLERY COMPOUND WHEREIN THE ANCESTORS OF THE CLAIMANTS WERE RUNNING DISTILLERY WHICH WAS CLOSED AFTER COMING INTO FORCE OF THE BOMBAY PROHIBITION ACT, 1949. IT WAS FURTHER CLAIMED THAT ON THE/ACQUI RED LANDS, ICE FACTORY AND RICE AND PULSE MILLS WER E ALREADY IN EXISTENCE WHEN THE LANDS CAME UNDER SUBM ERGENCE OF THE WATERS OF KADANA JALAGAR YOJNA. IN THE ORDER OF THE HON'BLE HIGH COURT IN PARA 2.3. , IT HAS BEEN MENTIONED THAT THE CLAIMANTS TO SUBSTANTIATE THEIR CLAIM FOR ENHANCED COMPENSATION , EXAMINED ONE OF THE CLAIMANTS, NAMELY BARJORBHAI J CONTRACTOR. THE WITNESS CLAIMED THAT ALL THE ACQUIRED LANDS WERE CONVERTED INTO NON-AGRICULTURAL USE SINCE MANY YEARS, WHEREIN, THE ANCESTORS OF THE CLAIMANTS WERE CARRYING ON THE BUSINESS OF DISTILLERY, ICE FACTORY, RICE AND PULSE MILLS. HE CLAIMED THAT BEFORE THE LANDS WERE PLA CED UNDER ACQUISITION, THE AREA KNOWN AS PRATAPPURA, IN WHICH LANDS WERE SITUATED WAS ALREADY DEVELOPED AS COMPARED TO THE LOCALITY KNOWN AS GODHRA-BHAGOL. HE STATED THAT THE ACQUIRED LANDS WERE FULLY DEVELOPED AND COULD HAVE BEEN SOLD TO COOPERATI VE SOCIETIES FOR CONSTRUCTION OF RESIDENTIAL HOUSES. THE HON'BLE HIGH COURT HAS ALSO REPRODU CED IN PARAGRAPH 11 OF ITS ORDER THE OBSERVATION OF THE LAND ACQUISITION OFFICER IN PARAGRAPH 5 OF HIS AWARD WITH REGARD TO THE DESCRIPTION AND SITUATION OF THE ACQUIRED LANDS AS MENTIONED ABOVE. IT HAS B EEN OBSERVED BY THE HON'BLE HIGH COURT THAT THE ABOVE DESCRIPTION OF THE ACQUIRED LANDS AS STATED I N THE AWARD OF THE LAND ACQUISITION OFFICER INDICATED THAT THE ACQUIRED LANDS WERE FULLY DEVELO PED AND WERE HAVING POTENTIALITIES FOR RESIDENTIAL HOUSES AND WOULD HAVE BEEN SOLD FOR THE SAID PURPOS E OR FOR ESTABLISHMENT OF COMMERCIAL ACTIVITIES. WHILE DETERMINING THE MARKET VALUE OF THE AC QUIRED LAND, THE HON'BLE HIGH COURT IN PARA 11 OF THE ORDER HAS OBSERVED AS UNDER: 'IN OUR OPINION, THE CLAIMANTS HAD SUFFICIENTLY PRO VED THAT THE AREA PRATAPPURA, WHEREIN THE ACQUIRED LAND WAS SITUATED, WAS FULLY DEVELOPED WHI CH HAD SUBMERGED DUE TO WATERS OF KADANA DAM AND AS A RESULT OF COMPULSORY ACQUISITION OF TH E PRESENT ACQUIRED LAND, THE DEVELOPMENT HAD SHIFTED TO ANOTHER LOCALITY OF THE SAME TOWN NAMELY GODHRA-BHAGOL WHEREIN THE LANDS WHICH WERE THE SUBJECT MATTER OF SALE DEED EXH. 145 WERE SITUA TED. IN VIEW OF THE ABOVE FACTS, IT IS CLEAR THAT THE LA NDS WHICH HAVE BEEN ACQUIRED ARE NOT AGRICULTURAL LANDS. DURING THE COURSE OF APPELLATE PROCEEDIN GS, IT HAS BEEN STATED BY THE ASSESSING OFFIC ER THAT THE \ APPELLANT HAD BEEN CONTESTING IN SEVERAL COURTS FOR COMMERCIAL COMPENSATION CONTENDING THAT THE LAND IS COMMERCIAL LAND WHICH I N FACT ARE COMMERCIAL LANDS. AT THE SAME TIME HE IS PLEADING BEFORE THE INCOME-TAX DEPARTMENT THAT T HE LANDS ARE AGRICULTURAL LAND. IT HAS BEEN STATED BY THE ASSESSING OFFICER THAT FROM THE COPIES OF TH E CITY SURVEY RECORDS, IT CAN BE CLEARLY SEEN THAT THE LANDS IN QUESTION WERE WITHIN THE CITY SURVEY AREA AND IN THE DATE COLUMN, THE DATE IS OF 09.01.1978. THEREFORE, IT IS CLEAR THAT THE LANDS IN QUESTION W ERE WITHIN THE MUNICIPAL LIMITS AS THE SAME WER E ALLOTTED CITY SURVEY NUMBERS BY THE LOCAL AUTHORIT Y. THE LANDS WERE USED FOR DISTILLERY, ICE FACTOR Y, RICE AND PULSE MILLS LONG BEFORE THE ACQUISITION AN D THEREFORE WAS PUT TO COMMERCIAL USE. KEEPING IN VIEW THE OBSERVATIONS OF THE HON'BLE HIGH COURT AND THE LAND ACQUISITION OFFICER, IT IS CLEAR THAT THE LANDS IN QUESTION ARE COMMERCIAL LANDS. THEREFOR E, THE ASSESSING OFFICER WAS JUSTIFIED IN REJECTING THE CLAIM OF THE APPELLANT THAT THE LARGER PLOTS WERE AGRICULTURAL LAND. THEREFORE, THE COMPENSATION RECEIVED IN LIEU OF COMPULSORY ACQUISI TION OF LAND IS TAXABLE AS LONG TERM CAPITAL GAINS U/S.45(5) OF THE I T ACT, 1961.THIS SUB-SECTION PRO VIDES THE METHOD OF COMPUTATION OF CAPITAL GAINS ITA NO 984/A HD/2006 . A.Y. 2001- 02 5 ARISING FROM THE TRANSFER OF A CAPITAL ASSET BEING A TRANSFER BY WAY OF COMPULSORY ACQUISITION UNDE R ANY LAW, OR A TRANSFER THE CONSIDERATION FOR WHIC H WAS DETERMINED OR APPROVED BY THE CENTRAL GOVERNMENT OR THE RESERVE BANK OF INDIA AND WHERE T HE COMPENSATION OR THE CONSIDERATION FOR SUCH TRANSFER IS ENHANCED OR FURTHER ENHANCED BY ANY COU RT, TRIBUNAL OR OTHER AUTHORITY. THE SAID SUB- SECTION PROVIDES THAT THE CAPITAL GAINS SHALL BE CO MPUTED BY TAKING THE COMPENSATION OR CONSIDERATION OR ENHANCED COMPENSATION OR CONSIDERATION AS THE CA SE MAY BE AS THE FULL VALUE OF CONSIDERATION AND SUCH CAPITAL GAINS SHALL BE CHARGEABLE AS INCOME OF THE PREVIOUS YEAR IN WHICH SUCH COMPENSATION OR CONSIDERATION IS RECEIVED BY THE ASSESSEE. IN THIS CASE, IT CANNOT BE HELD THAT THE COMPENSATION RECEI VED IS AN INTERIM PAYMENT WHICH IS SUBJECT TO A FINAL D ECISION. IN THIS CASE, THE APPELLANT HAS RECEIVED T HE ENHANCED COMPENSATION IN PURSUANCE OF THE ORDER OF THE HON'BLE HIGH COURT. THEREFORE, THE PROVISIONS OF SECTION 45(5)(B) ARE CLEARLY APPLICABLE IN THIS CASE. IN VIEW OF THE ABOVE FACTS, 'THE ASSESSING OF FICER WAS JUSTIFIED IN ASSESSING THE ASSESSEE'S SHARE IN CAPITAL GAINS OF RS.2407947 ACCORDINGLY, THE ADDITI ON MADE OF RS.2407947 BEING ASSESSEE'S SHARE IN CAPITA L GAINS IS CONFIRMED. 6. WITH RESPECT TO INTEREST, HE CONFIRMED THE ORDER BY A.O. BY HOLDING AS UNDER: 3.2. I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSE SSING OFFICER AND THE CONTENTIONS OF THE APPELLANT. THE HON'BLE HIGH COURT HAS AWARDED INTEREST @ 12% O N THE COMPENSATION FROM THE DATE OF ACQUISITION TO THE DATE OF ORDER. THE ASSESSING OFF ICER HAS WORKED OUT THE INTEREST ELEMENT AT RS.14882277 (RS.22106120 I.E COMPENSATION SOLATIUM AND INTEREST RECEIVABLE - RS.7223843 I.E. COMPENSATION AND SOLATIUM). THE INTEREST OF RS. 148 82277 IS PAYABLE FOR THE PERIOD FROM THE YEAR 1979 TO 2000. THE ASSESSING OFFICER HAS WORKED OUT THE I NTEREST @ 12% PER YEAR AT RS.708680 WHICH HAS TO BE DISTRIBUTED AMONGST THE THREE SURVIVING CO-OWNER S. THEREFORE, THE APPELLANT'S SHARE IN INTEREST CHARGEABLE TO TAX DURING THE YEAR WORKS OUT TO RS.2 36226 (RS.708680X 1/3). THE INTEREST IS TO BE TAXED IN THE RESPECTIVE ASSESSMENT YEAR. THEREFORE, THE A SSESSING OFFICER WAS JUSTIFIED IN ADDING THE APPELLANT'S SHARE OF INTEREST FOR THE YEAR OF RS.23 6226. ACCORDINGLY, THE ADDITION MADE OF RS.236226 I S CONFIRMED. 7. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE I S NOW IN APPEAL BEFORE US. 8. BEFORE US, THE LD. A.R. REITERATED THE SUBMISSIO NS MADE BEFORE A.O. AND CIT(A). HE FURTHER SUBMITTED THAT IN ASSESSMENT ORD ER 79-80, THE ASSESSEE HAD PAID LONG TERM CAPITAL GAINS IN RESPECT OF PLOT S AND BUILDINGS AT SANTRAMPUR. HE PLACED ON RECORD, THE COPY OF THE A SSESSMENT ORDER FOR A.Y. 79-80 AT PAGE 1 AND 2 OF THE PAPER BOOK. HE FURTHER SUBMITTED THAT THE AMOUNT OF COMPENSATION HAS NOT BEEN FINALLY ACCEPTE D BY THE ASSESSEE AND THE MATTER IS BEFORE THE HONBLE SUPREME COURT AND THE AMOUNT WHICH HAS BEEN RECEIVED BY THE ASSESSEE ARE DISPUTED ONES AS THEY HAVE NOT ACCEPTED THE RULING OF THE HONBLE HIGH COURT AND THE APPEAL S ARE PENDING IN SUPREME COURT AND THEREFORE THE AMOUNTS OF COMPENSATION REC EIVED BY THE ASSESSEE IS NOT TAXABLE. HE FURTHER SUBMITTED THAT THE LAND BEARING SURVEY NO. 873 AND 833 ARE AGRICULTURAL LANDS AND ARE COVERED BY THE E XCEPTION PROVIDED UNDER ITA NO 984/A HD/2006 . A.Y. 2001- 02 6 SECTION 2(14)(III) OF THE ACT 1961 AND ACCORDINGLY THE COMPENSATION IS NOT LIABLE TO CAPITAL GAIN TAX. HE ALSO SUBMITTED THAT SINCE THE ADDITIONAL COMPENSATION IS DISPUTED THEREFORE IT IS NOT TAXABL E UNDER SECTION 45(5)(B) OF THE ACT. THE LD. D.R. ON THE OTHER HAND POINTED TO THE VARIOUS OBSERVATIONS AND FINDINGS OF A.O. AND THUS SUPPORTED THE ORDER O F A.O. AND CIT(A). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE DISPUTE IN THE PRESENT CASE IS ABOUT THE TAXABILITY OF COMPENSATION AND INTEREST RECEIVED BY THE ASSESSEE ON COMPULSORY ACQ UISITION OF LAND. CIT(A) IN HIS ORDER HAS NOTED THAT THE LAND ACQUISITION OF FICER IN HIS AWARD, WHICH IS REPRODUCED BY THE A.O, HAS CLEARLY MENTIONED THAT T HE ACQUIRED LANDS WERE PART AND PARCEL OF SANTRAMPUR WHICH WAS INCLUDED IN THE DEVELOPMENT MAP AND IN THE CITY SURVEY AREA LONG BACK IN THE ORDER. IT HAS BEEN FURTHER STATED BY THE LAND ACQUISITION OFFICER IN THE REPORT THAT THE ACQUIRED LANDS WERE BEING UTILIZED AS NON AGRICULTURAL LANDS AND WERE MOSTLY USEFUL FOR RESIDENCES. IT HAS BEEN FURTHER STATED THAT SEVERAL HOUSES WERE CONSTR UCTED ON SOME OF THE PLOTS AND THEREFORE IT WAS CLEAR THAT THE ACQUIRED LANDS WERE FULLY DEVELOPED AND WERE HAVING POTENTIALITIES FOR RESIDENTIAL HOUS ES. CIT(A) HAS FURTHER NOTED THAT THE HONBLE GUJARAT HIGH COURT IN ITS OR DER DATED 07.07.2000 (1 ST APPEAL NO. 106/2000) HAS ALSO CONSIDERED THE LANDS ACQUIRED TO BE NON AGRICULTURAL LANDS. CIT(A) HAS ALSO NOTED THAT BEFO RE HONBLE HIGH COURT, ONE OF THE WITNESSES HAS CLAIMED THAT ALL THE ACQUIRED LANDS WERE CONVERTED INTO NON AGRICULTURAL USE SINCE MANY YEARS AND THE ACQUI RED LANDS WERE FULLY DEVELOPED AND COULD HAVE BEEN SOLD TO CO-OPERATIVE SOCIETIES FOR CONSTRUCTION OF RESIDENTIAL HOUSES. THE AFORESAID FACT HAS BEEN NOTED IN THE ORDER OF HIGH COURT. CIT(A) HAS ALSO NOTED THAT THE ASSESSEE HAS BEEN CONTESTING IN SEVERAL COURTS FOR COMMERCIAL COMPEN SATION CONTENDING THAT THE LAND IS COMMERCIAL LAND BUT BEFORE INCOME TAX DEPAR TMENT, THE ASSESSEE PLEADS THE LAND TO BE AGRICULTURAL LAND. CIT(A) HA S FURTHER GIVING A FINDING THAT THE LANDS IN QUESTION WERE WITHIN THE MUNICIPAL LIM ITS AS THE SAME WERE ALLOTTED CITI SURVEY NUMBERS BY THE LOCAL AUTHORITY , THE LANDS WERE USED FOR ITA NO 984/A HD/2006 . A.Y. 2001- 02 7 DISTILLERY, ICE FACTORY, RICE AND PULSE MILLS LONG BEFORE THE ACQUISITION AND THEREFORE WAS PUT TO COMMERCIAL USE. IN VIEW OF TH E AFORESAID FACTS AND RELYING ON THE OBSERVATION OF HONBLE HIGH COURT AN D LAND ACQUISITION OFFICER, CIT(A) HAS HELD THE COMPENSATION RECEIVED IN LIEU O F COMPULSORY ACQUISITION OF LAND TO BE TAXABLE AS LONG TERM CAPITAL GAINS UN DER SECTION 45(5) OF THE ACT. WITH RESPECT TO THE INTEREST CIT(A) HAS NOTED THAT THE HONBLE HIGH COURT HAS AWARDED INTEREST AT 12% OF THE COMPENSATION FROM TH E DATE OF ACQUISITION TO THE DATE OF ORDER AND THE INTEREST WAS PAYABLE FOR THE PERIOD 1979-2000. THE A.O. HAS WORKED OUT THE INTEREST TO BE DISTRIBUTED AMONG THE 3 CO-OWNERS AND HAS WORKED OUT THE PROPORTIONATE INTEREST TO BE TAX ED IN RESPECTIVE ASSESSMENT YEARS. BEFORE US, THE LD. A.R. COULD NO T CONTROVERT THE FINDINGS OF CIT(A), NOR HAS BROUGHT ANY CONTRARY MATERIAL ON RE CORD IN SUPPORT OF HIS STAND. WE THEREFORE FIND NO REASON TO INTERFERE WIT H THE ORDER OF CIT(A) AND THUS UPHOLD THE ORDER OF CIT(A) AND THUS THE GROUND S RAISED BY ASSESSEE ARE DISMISSED 10. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 07- 02 - 2014. SD/- SD/- (D.K. TYAGI) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT. REGISTRAR ITAT,AHMEDABAD