AKHILESH BANSAL,GURGAON vs. ITO, GURGAON

ITA 2394/DEL/2026Status: DisposedITAT Delhi27 July 2026AY 2018-1912 pages
AI SummaryAllowed

What were the facts?

The assessee received enhanced compensation and interest for compulsory acquisition of land. The assessee claimed exemption arguing the land was rural agricultural land and not a capital asset. The Assessing Officer and CIT(A) treated both the enhanced compensation and interest as taxable.

What did the Tribunal hold?

The Tribunal held that the land was rural agricultural land situated beyond the prescribed distance from municipal limits, thus not a capital asset. Consequently, the enhanced compensation and the interest awarded were not taxable.

What were the issues?

Whether enhanced compensation and interest on compulsory acquisition of land are taxable when the land is not considered a capital asset under Section 2(14)(iii) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 2(14)(iii),Section 45(5),Section 10(37),Section 28,Section 56(2)(viii),Section 57(iv),Section 145A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH ‘C’: NEW DELHI

For Appellant: Shri R.S. Singhvi, CA, Shri Satyajeet Goyal, CA
For Respondent: Shri G.P. Singh, Sr. DR
Hearing: 01.07.2026Pronounced: 27.07.2026

PER S.RIFAUR RAHMAN,AM:

1.

This appeal is filed by the assessee against the order passed by the ld. Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC) dated 02.01.2026 for the AY 2018-19. 2. Brief facts of the case are, in the year under consideration, the assessee received enhanced compensation amounting to Rs.2,15,77,773/- together with interest of Rs.2,23,78,473/- consequent to compulsory acquisition of land situated in Village Badha, Tehsil Manesar, District Gurugram by 2 HUDA. The land was originally purchased in the year 2007. The assessee claimed the enhanced compensation and damages in the form of interest u/s 28 of the Land Acquisition Act as exempt on the ground that the land acquire

The order continues below.

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