The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) recently held that no addition can be made on compensation received from the government on account of acquisition of land under Acquisition of Land Act, 1894.
Assessee-Kishoresinh Hemantsinh Chudasama is a retired government employee and engaged in agricultural activities. Allegedly, the assessee’s income tax practitioner mishandled his proceedings due to that the Assessing Officer (AO) made an addition to the income of the assessee on account of cash deposited in his bank account.
Against the assessment order, with the help of assesee’s friend who has knowledge about tax filed appeal along with providing the address and Email Id of the friend.
But during the pendancy of the appeal, all notices were accordingly being received by his friend, who in turn sent the notices to the assessee, but the assessee was under the belief that these notices were being sent to his CA also; while his friend was under belief that the assessee had forwarded the notices to the CA. Due to this misunderstanding between them assessee’s representation did not reach before the authority..
Therefore, the assessee filed second appeal before the tribunal.
Before the bench, Pritesh Shah counsel for the assessee submitted that the assessee had received compensation on account of acquisition of his land by the Government which he had withdrawn from his bank and kept as cash in hand for acquiring another land.
After a long time, the assessee again re-deposited the same amount which was carried in his hand and withdrew it again after sometime and also deposited his wife’s cash during the demonstration period.
Satish Solanki, counsel for the revenue, relied upon the decision of the lower authorities opposed to the contention of assessee’s counsel.
The tribunal, after analyzing the contention confirmed that, the assessee deposited the amount which was he received from the Government as compensation on account of acquisition of land under Land Acquisition Act.
Annapurna Gupta, (Accountant Member) allowed the appeal of the assessee and restored the issue back to the file of the AO for considering of the issue afresh after providing due opportunity of hearing to the assessee in accordance with law.
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