Compensation for compulsory acquisition of Land: Not taxable even if there is no specific exemption provision in the Income-tax Act of 1961

 1,692 total views

Compensation for compulsory acquisition of Land: Not taxable even if there is no specific exemption provision in the Income-tax Act of 1961

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.

 

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

 

3. 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.

 

4. 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.

 

5.  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.

Leave a Comment

Your email address will not be published.

the taxtalk

online portal for tax news, update, judgment, article, circular, income tax, gst, notification Simplifying the tax and tax laws is the main motto of the team tax talk, solving