“compulsory acquisition”

Capital GainsSection 45(5)Section 45(5)516 judgments

The decision most relied on for compulsory acquisition is CIT v. Ghanshyam (HUF) (315 ITR 1), cited in 363 judgments on BharatTax.

Leading authorities on compulsory acquisition

CIT v. Ghanshyam (HUF)

315 ITR 1 · 2009 · Supreme Court

363

citing judgments

Interest received under Section 28 of the Land Acquisition Act, 1894, is considered part of the enhanced compensation on compulsory acquisition of land. It is taxable as 'capital gains' and not separately as 'interest income' under the head Income from Other Sources.

Mahender Pal Narang v. CBDT

161 Taxmann.com 301 · 2024 · High Court

178

citing judgments

Interest received as enhanced compensation under Section 28 of the Land Acquisition Act, 1894, for compulsory acquisition of land is taxable as "income from other sources" under Sections 56(2)(viii) and 57(iv) of the Income-tax Act, 1961, and is not exempt under Section 10(37).

Movaliya Bhikhubhai Balabhai v. ITO TDS

388 ITR 343 · 2016 · High Court

128

citing judgments

Interest paid on compensation or enhanced compensation for compulsory acquisition of land forms part of the compensation itself and is not taxable as interest income under section 56(2)(viii) or section 145A.

Sham Lal Narula (Dr.) v. CIT

53 ITR 151 · 1964 · Supreme Court

100

citing judgments

Interest received under Section 28 of the Land Acquisition Act, 1894, on enhanced compensation does not form part of the compensation itself but is taxable as 'income from other sources', analogous to interest under Section 34 of the Act.

(supra), Rama Bai v. CIT

181 ITR 408 · 1990 · Supreme Court

citing judgments

Interest received on delayed payment or enhanced compensation awarded under compulsory acquisition is a revenue receipt and is liable to income tax.

Shri Manjeet Singh HUF v. UOI & Others in CWP No. 15506 of 2013; Shri Puneet Singh vs. CIT

110 Taxmann.com 116 · 2019 · Reported

citing judgments

Interest received on compensation or enhanced compensation from compulsory acquisition of land is taxable under the head 'Income from other sources' in the year of receipt, as per the amended provisions, with a 50% deduction available under section 57(iv).

Bikram Singh v. Land Acquisition Collector

224 ITR 551 · 1997 · Supreme Court

citing judgments

Interest received as income on delayed payment of compensation under Sections 28 or 31 of the Land Acquisition Act is a taxable revenue receipt, chargeable to income tax under the head 'income from other sources'.

CIT v. Hindustan Housing and Land Development Trust Ltd.

161 ITR 524 · 1986 · Supreme Court

citing judgments

Income does not arise or accrue when the right to receive payment or compensation is inchoate, contingent, or in dispute, as such a right does not create a debt. This principle determines the correct year of taxability, particularly for compensation under litigation.

Judgments citing compulsory acquisition

Madhusoodan Paliwal, Udaipur vs. ITO, Ward-1(1), Udaipur

In the result, the appeal filed by the assessee is allowed

ITA 156/JODH/2020[2015-16]Status: DisposedITAT Jodhpur22 Mar 2023AY 2015-16

Bench: Shri Kul Bharatshri Manish Boradshri Madhusoodan Paliwal, Vs Ito 95-96D, Hiran Magri, Sector-14, Ward-1(1) Udaipur-313002 (Raj) Udaipur (Raj) (Appellant) (Respondent) Pan No. Ahlpp1550C Assessee By Shri Sandeep Jhanwar, Ca Revenue By Shri S.M.Joshi, Jcit-Dr Date Of Hearing 21/03/2023 Date Of 22/03/2023 Pronouncement O R D E R Per Kul Bharat, J.M.: The Present Appeal Filed By The Assessee For The Assessment Year 2015-2016 Is Directed Against The Order Of Ld. Cit(A)-1, Udaipur Dated 11.09.2020. The Assessee Has Raised Following Grounds Of Appeal:-

Section 143(1)Section 143(3)Section 2(47)Section 5Section 53ASection 69Section 8

defines transfer as under:- " Transfer, in relation to a capital asset, includes,— (ii) the extinguishment of any rights therein; or (iii) the compulsory acquisition thereof under any law; or 4 | P a g e (iv) in a case where the asset is converted by the owner thereof into ... capital asset, includes,— (i) the sale, exchange or relinquishment of the asset ; or (ii) the extinguishment of any rights therein ; or (iii) the compulsory acquisition thereof under any law ; or (iv) in a case where the asset is converted by the owner thereof into, or is treated

ITO Ward - 2, Hisar vs. Hari Singh Saini, Hisar

In the result, the Revenue’s appeal stands dismissed

ITA 1539/DEL/2020[2012-13]Status: DisposedITAT Delhi20 Mar 2023AY 2012-13

For Appellant: Shri Kuldip Khera, CAFor Respondent: Ms. Indu Bala Saini, Sr. DR

Section 14SSection 155(16)Section 28Section 4Section 45(5)Section 45(5)(c)Section 56(2)(viii)

passed after the decision of jurisdictional court of Manjit Singh HUF. Hon'ble Supreme Court has held that interest received by the assessee on compulsory acquisition of land u/s 28 of the LA Act is in the nature of compensation and not interest which is taxable under the head 'income

Pulikkaparambil George Jacob, Kozhikode vs. ITO Ward 1(1), Kozhikode

In the result, assessee’s appeal is allowed for statistical purposes

ITA 558/COCH/2022[2011-2012]Status: DisposedITAT Cochin02 Mar 2023AY 2011-2012

Bench: Shri Sanjay Arora (Accountant Member), Shri Sandeep Gosain (Judicial Member)

For Appellant: Shri V.M. Veeramani, CAFor Respondent: Smt. J.M. Jamuna Devi, Sr. D.R

Section 143(3)Section 147Section 2Section 2(47)Section 2(47)(v)Section 2(47)(vi)Section 53A

capital asset, includes,- (i) the sale, exchange or relinquishment of the asset; or (ii) the extinguishment of any rights therein; or (iii) the compulsory acquisition thereof under any law; or (iv) in a case where the asset is converted by the owner thereof into, or is treated

Income Tax Officer Ward-2 (1), Jammu vs. Shri Mohd Aslam Baggar, Jammu

In the result, the appeal of the department is dismissed

ITA 104/ASR/2020[2015-16]Status: DisposedITAT Amritsar28 Feb 2023AY 2015-16

Bench: Dr. M. L. Meena & Sh. Anikesh Banerjee

For Appellant: Sh. Joginder Singh, CAFor Respondent: Sh. Hitendra Bhauraoji Ninawe, CIT DR

Section 10Section 10(37)Section 45(5)

being used for agricultural purposes by such Hindu undivided family or individual or a parent of his; iii. such transfer is by way of compulsory acquisition under any law, or a transfer the consideration for which is determined or approved by the Central Government or the Reserve Bank of India ... land situate in any area referred to in item (a) or item (b) of section 2(14)(iii), if such land is acquired through compulsory acquisition under any law. The conditions set out in the Section 10(37) are duly met by the appellant as discussed by the Authorized Representative

Ahmed Ali Khan, Tonk vs. ITO, Tonk

In the result, appeal of the assessee is partly allowed for statistical purposes

ITA 302/JPR/2022[2010-11]Status: DisposedITAT Jaipur23 Feb 2023AY 2010-11

Bench: SHRI SANDEEP GOSAIN (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Mukesh Khandelwal (CA)For Respondent: Ms Monisha Choudhary (JCIT)

Section 50CSection 54D

separately which is evidenced with the provisions of section 54D. For verification, he reproduced the provisions of section 54D as under :- “ Capital gain on compulsory acquisition of lands and buildings not to be charged in certain cases. 54D.(1) Subject to the provisions of sub-section (2), where the capital ... gain arises from the transfer by way of compulsory acquisition under any law of a capital asset, being land or building or any right in land or building, forming part of an industrial undertaking belonging to 4 Ahmed Ali Khan, Tonk. the assessee which, in the two years immediately preceding

Subhash Chand Dhingra, Gurgaon vs. ACIT Central Circle-3(1), Gurgaon

The appeals are dismissed

ITA 1063/DEL/2022[2017-18]Status: DisposedITAT Delhi07 Feb 2023AY 2017-18

Bench: Shri Shamim Yahya & Shri Anubhav Sharmasubhash Chand Dhingra, Vs. Acit, House No. 1/43, Shivaji Nagar, Central Circle-3(1), Gurgaon Gurgaon (Appellant) (Respondent) Pan: Aarpd8652J Satish Kumar Dhingra, Vs. Acit, House No. 1/43, Shivaji Nagar, Circle-4(1), Gurgaon Gurgaon (Appellant) (Respondent) Pan: Aanpd1971A Ashok Kumar Dhingra, Vs. Acit, House No. 1/43, Shivaji Nagar, Circle-1(1), Gurgaon Gurgaon (Appellant) (Respondent) Pan: Abupd6730B Giriraj Dhingra, Vs. Acit, House No. 1/43, Shivaji Nagar, Circle-1(1), Gurgaon Gurgaon (Appellant) (Respondent) Pan: Achpd9434E

For Appellant: Smt. Kavita Jha, AdvFor Respondent: Sh. P. Praveen Sidharth, CIT DR

Section 10(37)Section 139(4)Section 139(5)Section 143Section 143(3)Section 145ASection 263Section 56(2)(viii)Section 57

source is to be deducted or not on the amounts which are paid as compensation or enhanced compensation, etc., on account of compulsory acquisition of land under the provisions of Land Acquisition Act, 1894. It held that the respondents shall file appropriate returns before the Assessing Officer(s) in respect ... been accepted in appeal vide appeal no. 387/18-19 on the ground that interest received u/s 28 on compensation for compulsory acquisition is exempt from tax. The copy of order is enclosed herewith at Page No. 41 to 58. Regarding, certificate from the Department in this respect I have to submit

Ashok Kumar Dhingra, Gurgaon vs. ACIT Circle-1(1), Gurgaon

The appeals are dismissed

ITA 1061/DEL/2022[2017-18]Status: DisposedITAT Delhi07 Feb 2023AY 2017-18

For Appellant: Smt. Kavita Jha, AdvFor Respondent: Sh. P. Praveen Sidharth, CIT DR

Section 10(37)Section 139(4)Section 139(5)Section 143Section 143(3)Section 145ASection 263Section 56(2)(viii)Section 57

Satish Kumar Dhingra, Haryana vs. ACIT Circle-4(1), Gurgaon

The appeals are dismissed

ITA 1060/DEL/2022[2017-18]Status: DisposedITAT Delhi07 Feb 2023AY 2017-18

For Appellant: Smt. Kavita Jha, AdvFor Respondent: Sh. P. Praveen Sidharth, CIT DR

Section 10(37)Section 139(4)Section 139(5)Section 143Section 143(3)Section 145ASection 263Section 56(2)(viii)Section 57

Jayantilal Ambaram Patel HUF, Surat vs. Assistant Commissioner Income Tax, Cir.2(3), Surat

In the result, this appeal of assessee is allowed

ITA 327/SRT/2022[2010-11]Status: DisposedITAT Surat06 Feb 2023AY 2010-11

Bench: Shri Pawan Singh(Virtual Hearing) Jayantilal Ambaram Patel Huf, A.C.I.T., 5, Western Seven Seas, Behind Circle-2(3), Vs. Gangeshwar Temple, Opp. Saint Surat. Mark School, Adajan, Surat, Gujarat- 395009. Pan No. Aafhj 0354 R Appellant/ Assessee Respondent/ Revenue

Section 10(37)Section 254(1)Section 271(1)(c)

facts rejecting submissions of the appellant that no penalty can be levied on agricultural land acquired by Surat Municipal Corporation by way of compulsory acquisition for installing sewage treatment plant for the city of Surat. Jayantilal Ambaram Patel HUF Vs ACIT 4. The ld. CIT(A) erred ... land of assessee was acquired by the State Government for requirement of Surat Municipal Corporation (SMC) for setting up of Sewerage Treatment Plant under compulsory acquisition. The assessee claimed such compensation is exempted under Section 10(37) of the Act. However, the Assessing Officer treated such compensation as capital gain

Sh. Manjeet Singh, Karnal vs. ITO, Karnal

In the result, the appeals of the assessees are allowed

ITA 1391/DEL/2017[2011-12]Status: DisposedITAT Delhi25 Jan 2023AY 2011-12

Bench: Dr. B. R. R. Kumarsh. Yogesh Kumar Us

For Appellant: Sh. Aditya Srinivasan, CAFor Respondent: Sh. K. K. Mishra, Sr. DR

Section 10(37)Section 145ASection 2Section 23(1)Section 28Section 4Section 56Section 56(2)(viii)

exempt u/s 10(37) of the Income Tax Act, 1961. The assessee was owner of agricultural land and the same was taken under compulsory acquisition by Government of Haryana. The assessee claimed the entire enhanced compensation inclusive of interest as residual part of compulsory acquisition of agricultural land and claimed ... lower authorities. In view of the above, we hold that the interest received by the assessee during the impugned year on the compulsory acquisition of its land u/s 28 of the Land Acquisition Act, is in the nature of compensation and not interest which is taxable under the head income

Sh. Puneet Singh, Karnal vs. ACIT, Karnal

In the result, the appeals of the assessees are allowed

ITA 1389/DEL/2017[2011-12]Status: DisposedITAT Delhi25 Jan 2023AY 2011-12

Bench: Dr. B. R. R. Kumarsh. Yogesh Kumar Us

For Appellant: Sh. Aditya Srinivasan, CAFor Respondent: Sh. K. K. Mishra, Sr. DR

Section 10(37)Section 145ASection 2Section 23(1)Section 28Section 4Section 56Section 56(2)(viii)

Greenone Construction and Development Pvt. Ltd., Raipur vs. Principal Commissioner of Income Tax, Raipur-1, Raipur

In the result, appeal of the assessee is allowed in terms of our aforesaid observations

ITA 56/RPR/2022[2017-18]Status: DisposedITAT Raipur23 Jan 2023AY 2017-18

Bench: Shri Ravish Sood & Shri G D Padmahshaliआयकर अपील सं. / Ita No. 56/Rpr/2022 "नधा"रण वष" / Assessment Year : 2017-18 Greenone Construction & Development Private Limited C21/22, 1St Floor Shyam Market, Pandri, Raipur (C.G.)-492 004 Pan : Aafcg5846C .......अपीलाथ" / Appellant बनाम / V/S. The Pr. Commissioner Of Income Tax, Raipur-1(C.G.) ……""यथ" / Respondent

For Appellant: Shri Praveen Goyal, CAFor Respondent: Shri Debashish Lahiri, CIT-DR

Section 10(37)Section 139(1)Section 143(3)Section 246ASection 263Section 96

have acquired the aforesaid lands for a consideration of Rs.18,08,000/-, had offered the surplus (net) of Rs.80,23,548/- on the compulsory acquisition of the same as its 8 Greenone Construction and Development Private Limited Vs. Pr. CIT, Raipur-1 revenue from operations in its profit & loss account ... financial statements of the assessee a/w. its return of income, it transpires that it had accounted for the surplus (net) arising/accruing on compulsory acquisition of its lands by NHAI as its revenue from operations. We are unable to fathom as to on what basis the Pr. CIT had observed that

Sana Shah, Panipat vs. ITO, Ward-1, Panipat

Appeal stands dismissed

ITA 1702/DEL/2022[2018=-19]Status: DisposedITAT Delhi17 Jan 2023

Bench: Shri N.K. Billaiya & Shri Anubhav Sharmasana Shah, Vs. Ito, 744-745, Model Town, Ward-1, Panipat, Haryana Panipat (Appellant) (Respondent) Pan: Bopps2855R

For Appellant: Ms. Aditi S. Mann, AdvFor Respondent: Ms. Kajal Singh, Sr. DR

Section 10Section 10(37)Section 143(3)Section 145BSection 28Section 5Section 54(4)Section 56Section 56(2)(viii)

That the CIT(A) erred on facts and in law by not appreciating that it is an undisputed fact that prior to its compulsory acquisition, the land in question was being used for agricultural purposes and certificate issued from Land Acquisition Officer Distt. Panipat establishes that the interest on enhanced

Sobhi Lal Saini, Delhi vs. ACIT, Circle-61(1), New Delhi

In the result, the appeal of the assessee in ITA No

ITA 8981/DEL/2019[2016-17]Status: DisposedITAT Delhi13 Jan 2023AY 2016-17

Bench: Shri N.K. Billaiya & Shri Anubhav Sharma

For Appellant: Shri Somil Agarwal, AdvFor Respondent: Ms. Kajal Singh, Sr. DR

Section 10(37)Section 2(14)

allowing benefit of exemption claimed u/s 10(37) of the Income-tax Act, 1961 [hereinafter referred to as 'The Act'] on the compulsory acquisition of agricultural land of the assessee under the Land Acquisition Act. 3. In the alternative, the assessee is aggrieved by the cost of acquisition of land ... yards in in Khasra No. 52/2 (G-09) at village Jasola which was acquired by Land Acquisition Collector in F.Y. 1995-96 vide compulsory acquisition under the provisions of the Land Acquisition Act, 1894 vide Award No. 10/95- 96 Village Jasola. The assessee was holding 1/20th share in this land

ITO, Ward- 2(4), Faridabad vs. The New Vikas Co-Op House Building Society Ltd., Ballabhgarh

In the result, the appeal of the Revenue in ITA No

ITA 708/DEL/2018[2010-11]Status: DisposedITAT Delhi13 Jan 2023AY 2010-11

Bench: Shri N.K. Billaiya & Shri Anubhav Sharma

For Appellant: Shri Vijay Kumar Gupta, AdvFor Respondent: Ms. Kajal Singh, Sr. DR

Section 143(3)Section 271(1)(c)

income: “During the present period i.e. A.Y. 2010-11 the present society received enhanced compensation of Rs. 1,97,03,406/- on account of compulsory acquisition of agricultural land by the Government of Haryana. The society also received interest on enhanced compensation to the amount of Rs.67,04,556/-. These

ITO, Ward-4(1), Patna vs. Jagdish Ray, Patna

In the result, the appeal of revenue-ITA No

ITA 102/PAT/2020[2014-15]Status: DisposedITAT Patna04 Jan 2023AY 2014-15

Section 10(37)Section 250Section 96

Ward 4(4), Patna dated 27.12.2016 in which the following disputes arise for adjudication which are as under:- “whether compensation received on account of compulsory acquisition of land by the Government is taxable or not in the hands of appellant assessee.” 2. That the appellant assessee is an agriculturist ... agreement is exempt from levy of income tax. The respective para are as under: “As no distinction has been made between compensation received for compulsory acquisition of agricultural land and non-agricultural land in the matter of providing exemption from income-tax under the RFCTLARR Act, the exemption provided under

Prerak Goel, Mumbai vs. Pr. CIT -19, Mumbai

In the result, the appeal filed by the assessee is allowed

ITA 787/MUM/2022[2016-17]Status: DisposedITAT Mumbai27 Dec 2022AY 2016-17

Section 143(3)Section 2(47)(v)Section 263Section 53ASection 54F

capital asset, includes, (i) the sale, exchange or relinquishment of the asset ; or (ii) the extinguishment of any rights therein; or (iii) the compulsory acquisition thereof under any law; or (iv) in a case where the asset is converted by the owner thereof into, or is treated

P. Ananthram, Coimbatore vs. ACIT, Non-Corporate Circle-2, Combatore Main Building, 63, Race Course Road, Coimbatore

In the result, the appeal of the assessee is allowed

ITA 155/CHNY/2021[2016-17]Status: DisposedITAT Chennai21 Dec 2022AY 2016-17

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwalआयकर अपील सं./Ita No.155/Chny/2021 िनधा"रण वष" /Assessment Year: 2016-17 P. Ananth Ram, The Asst. Commissioner Of 36, West Venkataswamy Road, Vs. Income Tax, R.S. Puram, Non Corporate Circle-2, Coimbtore – 641 002. Coimbatore. [Pan: Anxpa-6262-C] (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/ Appellant By : Shri R. Vijayaraghavan, Advocate ""यथ" क" ओर से /Respondent By : Shri S. Marudhu Pandyan, Cit सुनवाई क" तारीख/Date Of Hearing : 21.12.2022 घोषणा क" तारीख /Date Of Pronouncement : 21.12.2022

For Appellant: Shri R. Vijayaraghavan, AdvocateFor Respondent: Shri S. Marudhu Pandyan, CIT

Section 143(3)Section 263Section 54

deals with capital gain on transfer of land used for agricultural purposes not to be charged. Section 54D deals with Capital gain on compulsory acquisition of lands and buildings not to be charged. Section 54E deals with capital gain on transfer of capital assets not to be charged. Section 54EA

ACIT -893) (1), Mumbai vs. M/S. Triple Securities Pvt. Ltd, Mumbai

ITA 2270/MUM/2021[2016-17]Status: DisposedITAT Mumbai20 Dec 2022AY 2016-17

For Appellant: Shri Nitesh JoshiFor Respondent: Ms. Samruddhi Hande

Section 143(3)Section 36Section 43C

relevant portion reads as under: "Subject to the provisions of sub-section (2), where the capital gain arises from the transfer by way of compulsory acquisition under any law of a capital asset, being land or building or any right in land or building, forming part of an industrial undertaking

M/S. Sumit Exports, Mumbai vs. The ACIT 19(3), Mumbai

ITA 645/MUM/2022[2013-14]Status: DisposedITAT Mumbai10 Nov 2022AY 2013-14

Bench: Shri Kuldip Singh, Hon'Ble & Shri S. Rifaur Rahman, Hon'Blem/S. Sumit Export V. Acit – 19(3) Dw-5030, 5Th Floor Matru Mandir, Tardev Road D.Tower, Bharat Diamond Bourse Mumbai – 400 007 Bandra Kurla Complex Bandra (E), Mumbai -400051 Pan: Aacfs3599Q (Appellant) (Respondent) Assessee Represented By : Shri Rahul Sarda Department Represented By : Shri Manoj Sinha

Section 143(1)Section 143(2)Section 2(14)Section 2(47)

capital asset is defined as including the sale, exchange or relinquishment of the asset or the astonishment of any night therein or the compulsory acquisition thereof under any law. The word "property", used in section 2(14) of the I.T. Act, is a word of the widest amplitude