Compensation for compulsory acquisition of Land, whether agricultural or non agricultural is exempted from Income Tax: ITAT

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Compensation for compulsory acquisition of Land, whether agricultural or non agricultural is exempted from Income Tax: ITAT

 

  1. The two-member bench of Sonjoy Sarma (Judicial Member) and Manish Borad (Accountant Member) has observed that no distinction was 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.

 

  1. The assessee relied on Circular No. 36/2016 dated 25.10.201 issued by the CBDT.

 

  1. As per the circular, compensation received in respect of an award or agreement is exempted from the levy of income-tax vide section 96 of the RFCTLARR Act.

 

  1. The compensation is also not taxable under the provisions of the Income-tax Act of 1961, even if there is no specific exemption provision in the Income-tax Act of 1961.

 

  1. The Tribunal upheld the order of the CIT(A).
    “The assessee received compensation for compulsory acquisition of commercial land during the F.Y. 2014-15, which was exempted under section 96 of the RFCTLARR Act, as clarified by the CBDT Circular No. 36/2016 dt. 25/10/2016,” the tribunal ruled.

 

The copy of the order is as under:

 

Compulssory Acquistion

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