Question And Answer
Subject: whether Capital gains tax on compulsory acquisition of agriculture land in 2010 is taxable ?
Querist: MS
Answered by:
Tags: , ,
Date: July 19, 2021
Query asked by MS

My agricultural land was compulsorily acquired under the NHAI act in 2010.

Some enhanced compensation was received by me in 2021 and the case is still pending in high court.

I am confused if I will need to pay capital gains tax on the compensation received. As I said the acquisition was done in 2010. Are you able to please help out.

Thank you

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Answer given by

In M. Vishwanathan . v. CCIT ( 2020) 116 894/ 274 Taxman 411 ( Ker) (HC) allowing the appeal of the assessee the Court held that compensation received from Corporation of Kochi for acquisition of non -Agricultural land is held to be not taxable . Referred circular No . 36/2016 dt 25 -10 -2016 ( 2016 ) 388 ITR 38 ( St) under section 96 of RFCTLAAR Act. ( Right to Far Compensation and Transparency in land Acquisition , Rehabilitation and Resettlement Act , 2013 ) .On the facts we presume the land acquired was of agricultural land , In PCIT v. Anthony John Pereira (2020) 425 ITR 134/ 195 DTR 168 / 317 CTR 920 / 272 Taxman 138 (Bom) (HC) the Court held that sale of agricultural land Village having population less than ten thousand is not liable to capital gain tax
In Shivanna, M. v. ACIT (2016) 142 DTR 319 (Karn.)(HC) Compensation for acquisition of the entire land on ‘as is where is’ basis is exempt from capital gain tax .
The tax consultant may be able to advice properly after referring various documents of Land Acquisition .

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