SURINDER KUMAR,GONIANA MANDI V. INCOME TAX OFFICER,WARD-1(1),BATHINDA, BATHINDA

ITA 29/ASR/2024

AI Insights

The case revolves around the appeal by Surinder Kumar against the order of the CIT(A) National Faceless Appeal Centre, which confirmed the Income Tax Officer's assessment adding Rs. 2,05,93,010 to Kumar's income for the Assessment Year 2016-17. This amount represented the compensation received from the compulsory acquisition of land under the National Highway Act, 1956. The primary legal contention was whether this compensation was exempt from tax under Section 96 of the RFCTLARR Act, 2013, supported by Circular No. 36/2016. The Tribunal examined precedents and similar cases, notably the Ranjit Singh case, and found that the compensation was indeed exempt as it was received after the enactment of the RFCTLARR Act, 2013, and the relevant circular.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 471772 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-09-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 23-01-2024
• Other Referred Cases: Ranjit Singh & Ranjit Poultry Farm [ITA no. 91/Asr/2023 & 135/Asr/2023], Shivaji Roy and Manjit Singh, Satish Kumar Vs. ITO, Gopa Ram Vs. UOI, UOI vs. Tarsem Singh, NHAI vs Modan Singh and Others
• Laws Referred To: National Highway Act, 1956, RFCTLARR Act, 2013, Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revised return; Capital Gains; TDS
• Section: 143(3)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (HYBRID COURT) BEFORE DR. MITHA LAL MEENA, ACCOUNTANT MEMBER AND SH. UDAYAN DASGUPTA, JUDICIAL MEMBER I.T.A. No. 29/Asr/2024 Assessment Year: 2016-17 Surinder Kumar S/o Roop Chand, Ward No. 8, Goniana Mandi, 151001 Punjab [PAN: AEYPK9167J] (Appellant) Vs. Income Tax Officer, Ward-1(1), Bathinda (Respondent) Appellant by Respondent by : : Sh. Sudhir Sehgal, AR Sh. Rishi Kumar, Sr. D.R. Date of Hearing Date of Pronouncement : : 09.09.2024 09.10.2024 ORDER Per Dr. Mitha Lal Meena, AM: The captioned appeal has been filed by the assessee against the order of the ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi dated 04.01.2024 which is arising out of the Assessment Order u/s 143(3) dated 2 ITA No. 29/Asr/2024 Surinder Kumar v. ITO 12.12.2018 passed by ITO, Ward-2(1), Bathinda in respect of Assessment Year: 2016-17. 2. The assessee has raised the following grounds of appeal: “1. The Ld. CIT(A), NFAC has erred on facts and law in confirming the action of the AO of assessing the income of the assessee at Rs. 2.0593c 10/- as against the income Rs. 2698530/- declared in the revised Return of Income filed on 23.06.2017. 2. The Ld. CIT(A) NFAC has not adjudicated the claim of exemption of the assessee, from Long Term Capital Gains, arising from compulsory acquisition of land under National Highway Act, 1956, by relying on Section 96 of the RFCTLARR Act, 2013 and clarificatory Circular No. 36/2016 (F. No. 225/88/2016-ITA.II Dated 25.10.2016, despite the fact that the detailed written submissions have been filed during the course of hearing before the CIT(A) NFAC. 3. The Ld. CIT (A) NFAC has not followed the binding decision of the Amritsar Bench of ITAT in the case of Ranjit Singh & Ranjit Poultry Farm [ITA no. 91/Asr/2023 & 135/Asr/2023] in which the Hon’ble Bench has already held vide orders dt. 30.08.2023 that the compensation received by the assessee arising from compulsory acquisition of land under National Highway Act 1956 is exempt and the above stated facts were brought on record in the submissions uploaded during the course of appellate proceedings. 4. The Ld. CIT (A), NFAC has erred on facts and law in rejecting the claim of exemption of Rs.41,142/- received as additional compensation compulsory acquisition of land under National Highway Act, 1956, by relying on Section 96 of the RFCTLARR Act, 2013 and clarificatory Circular No. 36/2016 (F. No. 225/88/2016-ITA.II Dated 25.10.2016. 5. That the appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed of.” 3 ITA No. 29/Asr/2024 Surinder Kumar v. ITO 3. At the outset, the ld. counsel for the appellant conceded the issue challenged in ground no. 4 of appeal as it was decided against the assessee in the judgment delivered by Hon’ble Punjab & Haryana High Court in the case of Shivaji Roy and Manjit Singh. Accordingly, this ground is not pressed by the ld. AR, and thus, it is dismissed as not pressed. 4. The appellant assessee has raised a sale issue in ground nos. 1 to 3, challenging therein the action of the ld. CIT(A) in confirming the addition of Rs.2,05,93,010/-. 4.1 The ld. AR submitted that the AO has rejected assessee’s claim of an exemption against Long Term Capital Gains, arising from compulsory acquisition of land under National Highway Act, 1956 by relying on section 96 of the RFCTLARR Act, 2013 and clarificatory Circular No. 36/2016 (F.No.225/88/2016-ITA.II) dated 25.10.2026, despite the fact that the detailed written submissions have been filed during the course of hearing and ignoring the binding decision of ITAT Amritsar co-ordinate Bench in the case of Ranjit Singh & Ranjit Poultry Farm (ITA No. 91/Asr/2023 & 135/Asr/2023) wherein the Hon’ble Bench vide orders dated 30.08.2023has held that compensation received by the assessee being arising out of compulsory acquisition of land under National Highway Act, 1956 as exempted. 4 ITA No. 29/Asr/2024 Surinder Kumar v. ITO 5. The ld. AR has contended that on identical facts, it is covered matter in favour of the assessee by the judgment delivered by co-ordinate Amritsar Bench in the case of Sh. Ranjit Singh v. ITO, Ward-1, Bathinda in ITA No. 91/Asr/2023 dated 30.08.2023. The ld. AR has filed a comparison Chart on facts, illustrating that how the issue involved in the present appeal is covered matter, as under: ITA No. 29/ASR/2024 ASSTT. YEAR 2016-17 COMMON CHART IN THE ABOVE CASES WHICH CLEARLY ESTABLISHES THAT THE FACTS ARE SIMILAR TO THE CASE OF RANJEET SINGH VS ITO IN ITA NO. 91/ASR/2023 1. Facts in the case of Ranjeet Singh vs ITO in ITA No. 91/Asr/2023 dated 30.08.2023; Date of announcement of award- 07.11.2014 Date of actual receipt of Award- 19.05.2015 The Hon’ble Bench in para 18 to 21 has duly held and confirmed that compensation was not paid till 31.12.2014 and was paid only on 19.05.2015 and thus provisions of RFCTLAAR Act 2013would apply as the award has not been awarded prior to 31.12.2014 by relying upon the Judgment of the Jurisdictional High Court in the case of BHAI vs Modan Singh and Others (para-18). Sr. No. Particulars FACTS IN THE CASE OF SURINDER KUMAR FACTS IN THE CASE OF RANJEET SINGH 1. Assessment Year 2016-17 2016-17 2. Similarly, the facts in the cases of SH. Surinder Kumar as under; 5 ITA No. 29/Asr/2024 Surinder Kumar v. ITO 2. Issue Compulsory Acquisition of land under the National Highway Act 1956 Compulsory Acquisition of land under the National Highway Act 1956 3. Capital Gain Long Term Capital Gain Long Term Capital Gain 4. Place Village Gill Patti, Distt. Bathinda Village Amargarh, Distt. Bathinda 5. Land acquired for project NH-15 Bathinda to Amritsar NH-15 Bathinda to Amritsar 6. Rate of compensation per Rs.17,847.15 Rs.17,851.24 7. Date of notification 04.02.2014 04.02.2014 8. Award Given on 07.11.2014 07.11.2014 9. Compensation Received in bank account on 18.05.2015 19.05.2015 3. So, from the above it is clear that the facts in the cases of Sh. Surinder Kumar are exactly the same as in the case of Rarsjeet Singh vs ITO in ITA No. 91 /Asr/2023 dated 30.08.2023.” 6. In support of the contention, the ld. AR has also filed a brief synopsis which reads as under: “This is an appeal filed by the assessee and, though, the assessee had taken various grounds of appeals but in nutshell, the grounds of appeal relates to not granting exemption in respect of long term capital gain arose from compulsory acquisition of land under the National Highway Act 1956 and ignoring the CBDT circular and many other judgments and making reliance on the only judgment of ITAT, Agra Bench, Agra. The brief facts of the case are as under: - 6 ITA No. 29/Asr/2024 Surinder Kumar v. ITO BRIEF FACTS 1. The residential land measuring 1093.50 Sq yards of the assessee was acquired under National Highway Act, 1956 vide notification dated 04.02.2014 and the assessee received the following compensation through bank on 19.05.2015. Compensation 1,95,15,868/- 30% solatium 58,54,760/- Interest 31,43,9267- Total compensation 2,85,14,554/- Less: TDS on interest @ 10.30% 3238247- Total amount received 2,81,90,7307- 1.1 The assessee filed his ITR for the AY 2016-17 on 29-07-2016 showing total income at Rs. 2,05,93,010/- including long term capital gains of Rs. 1,78,94,473/-. Thereafter, the assessee revised the ITR on 23-06-2017 showing total income at Rs. 26,98,530/-. 1.2 The assessee claimed the above stated amount of Rs. 2,53,70,628/- i.e. Compensation of Rs. 1,95,15,868/- and amount of Solatium received is Rs.58,54,760/- in the revised return of income as exempt from Income Tax in view of Section 96 of the RFCTLARR Act, 2013 and Circular no. 36/2016 dated 25.10.2016. 2. In the case of the Assessee, the award was given on 07.11.2014 (also stated by AO in para 4.2(i) page-7), but it is a matter of fact that the award of compensation was not paid to the Assessee and it was paid only on 18.05.2015 (proof in the form of bank statement is forming part of paper book Pg. 36 to 38. 3. The AO in his order has rejected the claim of the Assessee on two grounds and the same are dealt in as under: Findings of the AO Our arguments a) The land of the Assessee was not acquired under the RFCTLAAR Act but it was acquired under (a) The AO has ignored the fact that since the compensation on account of compulsory acquisition of land has been received during the FY 2015-16 [i.e. 18.05.2015] the same is taxable under Section 45(5)(a) of the Act in the previous year in which such compensation has been first received. 7 ITA No. 29/Asr/2024 Surinder Kumar v. ITO NHAI Act and thus the Assessee is not eligible u/sec 96 of the RFCTLAAR Act. (b) Reliance is placed on the letter of Ministry of Transport and Highways dated 28th December 2017 [PB 00-00]in which it has been stated as under:- “I am directed to say that the land required for National Highway Projects is acquired under the provisions contained in Section 3 of the National Highways (NH) Act, 1956. Pursuant to the enactment of the RFCTLARR Act of 2013 and its coming into force with effect from 01.01.2014, certain provisions of the 2013 Act became applicable to the other related Acts mentioned in the Fourth Scheduled, including the NH Act, 1956 with effect from 01.01.2015 in terms of Section 105(3) of the RFCTLARR, 2013. ” (c) Further in the letter dated 28.12.2017 issued by Ministry of Road Transport Et Highways under the subject:Land Acquisition under the National Highways Act, 1956 has been stated in para 4.6 (iii) as under:- “(a) All cases of Land Acquisition where the Awards had not been announced under section 3G of the NH Act till 31.12.2014 or where such awards had been announced but compensation had not been paid in respect of majority of the land holdings under acquisition as on 31.12.2014, the compensation would be payable in accordance with the First Schedule of the RFCTLARR Act, 2013.” (d) The reliance was placed on the order of Chandigarh Bench of the ITAT in the case of Satish Kumar Vs. ITO in ITA NO. 1182/Chd/2019 [PB 22- 42] in which the compensation received by the assessee on 05.11.2014 and 23.11.2015 under National Highway Act on compulsory acquisition of land by NHAI has been held to be exempt u/s 96 of the RFCTLARR Act vide circular no 36/2016 dt. 25.10.2016. (e) The case of the assessee is covered by the orders of Rajasthan High court in the case of Gopa Ram Vs. UOI dt. 22.01.2018 [followed by Chandigarh bench of the ITAT in the case of Satish Kumar] in which it has held that the provisions of the RFCTLARR Act, 2013 are applicable to National Highway Act, 1956 (f) Hon’ble Supreme court in the case of UOI vs. Tarsem Singh others dated 19.09.2019 Civil Appeal No. 7064 of 2019 it has been held by the Apex Court that the provisions of RFCTLARR Act, 2013 are applicable to land acquired under national highway Act and the compensation has to be calculated and 8 ITA No. 29/Asr/2024 Surinder Kumar v. ITO paid in accordance with the provisions of RFCTLARR Act, 2013. (g) High Court of Kerla in the case of Raghavan Nair v. ACIT - [2018] 89 taxmann.com 212 (Kerala) [PB 7-16] in which it has been held that the compensation received for compulsory acquisition of agriculture land for Kochi Metro Rail Project is exempt under section 96 of the RFCTLARR Act, 2013. (h) Reliance in this regard is also being placed onthe Judgment of the Hon’ble Punjab & HaryanaHC in the case of NHAI vs Modan Singh and Othersand other group cases in FAQ 756- 2022 orderdated 11.04.2023 wherein it has been held thatthe RFCTLAAR Act. 2013 would apply to caseswherein award has been awarded prior to 31.12.2024 but compensation is not paid yet till31.12.2014, even though the said acquisitionshave been done under the NHAI Act. 1956. b) The AO held vide para 4.8and 5 of the assessment order that the assessee is not eligible for claiming exemption from income tax on the basis of Circular No. 36/2016 of the CBDT and u/s 96 of the RFCTLARR Act, 2013 and the amount of compensation received by the assessee on acquisition of land is taxable under the provisions of Income Tax Act, 1961 since the notification was issued on 04.02.2014 and award was given on 07.11.2014 and the notification regarding amendment in section 105 of the RFCTLARR Act, 2013 was issued on 31.12.2014, which was applicable from 01.01.2015. a) It is a matter of fact that the award of compensation was not paid to the Assessee and it was paid only on 18.05.2015 (proof in the form of bank statement already enclosed above) In reliance we are hereby placing a judgment passed by the same Hon’ble Tribunal Amritsar vide ITA No. 91/ASR/2023, ITA No. 135/ASR/2023 In the case of Sh. Ranjit Singh Vs. Income Tax Officer Ward-1, Bathinda and M/s Ranjit Poultry Farm Vs. Deputy Commissioner of Income Tax, Bathinda covering the same issue, wherein Hon’ble Tribunal held by the bench that “In the instant case, it is a matter of record that the award of compensation in the said case was not paid till 31.12.2014 and was paid only on 19.05.2015 as evident from bank statement” 9 ITA No. 29/Asr/2024 Surinder Kumar v. ITO From the perusal of the above, it submitted that our case of the assessee is completely covered matter as facts already considered in case of of Sh. Ranjit Singh Vs. Income Tax Officer Ward-1, Bathinda and M/s Ranjit Poultry Farm Vs. Deputy Commissioner of Income Tax, Bathinda vide order pronounced on 30.08.2023 vide ITA No. 91/Asr/2023 & ITA No. 135/Asr/2023 as per common chart attached.” 7. Per contra, the ld. DR relied on the impugned order. The ld. DR has failed to rebut the contention of the appellant. 8. We have heard the rival contentions, perused the material on record, written submissions, the impugned order and case law cited before us. Admittedly, the appellant assessee has claimed an amount of Rs. 2,53,70,628/- (i.e. Compensation of Rs. 1,95,15,868/- and amount of Solatium received is Rs.58,54,760/-) in the revised return of income as exemption from Income Tax in view of Section 96 of the RFCTLARR Act, 2013 and Circular no. 36/2016 dated 25.10.2016. In the present case, the assessee, was given award on 07.11.2014 (stated by AO in para 4.2(i) page- 7), but it is a matter of fact that the award of compensation was paid only on 18.05.2015 (Copy of bank statement, paper book Pgs. 36 to 38). 9. The Hon’ble Supreme Court in the case of UOI vs. Tarsem Singh others dated 19.09.2019 Civil Appeal No. 7064 of 2019, it has been held by the Apex Court that the provisions of RFCTLARR Act, 2013 are applicable to land acquired under national highway Act and the compensation has to be 10 ITA No. 29/Asr/2024 Surinder Kumar v. ITO calculated and paid in accordance with the provisions of RFCTLARR Act, 2013. 10. The Chandigarh Bench of the ITAT in the case of Satish Kumar Vs. ITO in ITA NO. 1182/Chd/2019 [PB 22- 42] observed that the compensation as received by the assessee on 05.11.2014 and 23.11.2015 under National Highway Act on compulsory acquisition of land by NHAI has been held to be exempt u/s 96 of the RFCTLARR Act vide circular no 36/2016 dt. 25.10.2016 following the orders of Rajasthan High court in the case of Gopa Ram Vs. UOI dt. 22.01.2018. 11. The Hon’ble Punjab & Haryana HC in the case of NHAI vs Modan Singh and Others and other group cases in FAQ 756-2022 vide order dated 11.04.2023 has held that the RFCTLAAR Act. 2013 would apply to cases wherein award has been awarded prior to 31.12.2024 but compensation is not paid yet till 31.12.2014, even though the said acquisitions have been done under the NHAI Act. 1956. 12. It is evident from the comparative chart, on similar facts as above, that the appellant case is covered matter in favour of assessee by the co-ordinate Amritsar Tribunal Amritsar, judgment in the case of Sh. Ranjit Singh Vs. Income Tax Officer (supra) when it has been observed as follows: 11 ITA No. 29/Asr/2024 Surinder Kumar v. ITO In the instant case, it is a matter of record that the award of compensation in the said case was not paid till 31.12.2014 and was paid only on 19.05.2015 as evident from bank statement and it isto be exempted u/s 96 of the RFCTLARR Act. 13. In the above view, we hold that the compensation received by the appellant assessee out of compulsory acquisition of land under National Highway Authority Act is exempt from Income Tax by virtue of section 96 of RFCTLARR Act, 2013 and clarificatory circular No. 36/2016 dated 25.10. 2016. According, the addition of Rs.2,05,93,010/- is deleted. 14. In the result, the appeal filed by the assessee is allowed. Order pronounced in accordance with Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 on 09/10/2024 Sd/- Sd/- (Udayan Dasgupta) (Dr. Mitha Lal Meena) Judicial Member Accountant Member *GP/Sr.PS* Copy of the order forwarded to: (1)The Appellant: (2) The Respondent: (3) The CIT concerned (4) The Sr. DR, I.T.A.T. True Copy By Order "