KRISHNA KUMAR SHARMA vs. DEPUTY COMMISSIONER OF INCOME TAX

(2021) 61 CCH 0245 AgraTrib

Short Overview:

Capital gains

Capital gain on acquisition of land by National Highway Authority of India

Assessment order in case of assessee was passed which included a sum as long term capital gain arising out of acquisition of assessee’s land by National Highway Authority of India

Assessee moved an application u/s. 154 before Assessing Officer alongwith CBDT Circular No. 36/2016 claiming that there was no tax liability on acquisition of land by Govt. Authority under RFCTAAR Act

Assessing Officer rejected claim of assessee

Appeal filed by assessee against said order stood dismissed by ld. CIT(A)

Court held as under:

From perusal of Section 3G of National Highways Act, 1956, it is clear that award was made in Section 3G of National Highways Act on 05.02.2013 and compensation was given as per Form 16A on 01.01.2014

Hence, there is no applicability of RFCTAAR Act to transaction

Even section 24 is not applicable as in present case award was passed on 05.02.2013, which is a date prior to date when RFCTAAR Act was made applicable.

Therefore, its provisions are not applicable.

Further as per section 5 income of assessee (compensation received by assessee) is required to be taxed when said compensation have accrued in favour of assessee or deemed to have been accrued.

Undisputedly, assessee was entitled to receive compensation when award was passed quantifying amount in favour of assessee for acquisition of land.

Therefore, cutoff date for purpose of determining its taxability is date when assessee was found to be entitled to receive compensation and not date when it was actually received by assessee.

In light of above there is no merit in appeal of assessee.

Assessee’s appeal dismissed.