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Basweshwar Mallikarjun Bidwe,, Latur v. Income-tax Officer,, Latur

Income Tax Appellate Tribunal

Oct 5, 2020

Judgment

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Tribunal Summary: ITA No.1012/PUN/2017 — Basweshwar Mallikarjun Bidwe (pronounced 05-10-2020)

Bench: R.S. Syal (Vice President) and Partha Sarathi Chaudhury (Judicial Member).
Counsel: Assessee by Shri Sharad Shah; Revenue by Shri Deepak Garg.
Subject years / order below: Appeal against CIT(A)-2, Aurangabad order dated 27-01-2017 for Assessment Year 2013-14.

Factual and Procedural Background

The appeal arises from an assessment for AY 2013-14 in which the assessee (Basweshwar Mallikarjun Bidwe) filed a return declaring total income of Rs.42,370. The assessee received enhanced compensation amounting to Rs.38,19,709 and interest under Section 28 of the Land Acquisition Act, 1894 (LAA) totaling Rs.68,32,020 for compulsory acquisition of land (land situated at Village Khadgaon, Tq. Latur / disputed as to whether at Gut No.11 Vasangaon).

In the return the assessee disclosed the total interest (Rs.68,32,020) and agricultural income (Rs.2,37,900) in the exempt income column. The Assessing Officer (AO) disagreed with the assessee's treatment and, treating 50% of the interest as deductible under section 57(iv), brought net interest income of Rs.34,16,010 to tax under section 56(2)(viii) of the Income-tax Act, 1961. The CIT(A) upheld the AO's view. The assessee appealed to the Tribunal.

A second surviving issue concerns the confirmation of addition of Rs.38,58,365 as long-term capital gain (LTCG) on account of acquisition of land: the AO computed LTCG treating the acquired land as a capital asset (asset under section 2(14)), relying on DVO valuation and the view that the land fell within municipal limits and that the assessee failed to prove agricultural use in requisite earlier years; the CIT(A) affirmed this.

Legal Issues Presented

Whether interest received under Section 28 of the Land Acquisition Act is taxable as interest (income from other sources) under section 56(2)(viii) of the Income-tax Act or whether it forms part of the compensation (sale consideration) and is exempt when the land is agricultural.
Whether the addition of Rs.38,58,365 as long-term capital gain is justified — specifically, whether the correct land was identified as acquired and whether that land qualified for exemption (i.e., agricultural use) or constituted a capital asset under section 2(14).

Arguments of the Parties

Appellant's (Assessee's) Arguments

The interest under Section 28 of the LAA should be treated as part of the enhanced compensation (sale consideration) and, since the land was agricultural, be exempt from tax — appellant relied principally on the Supreme Court judgment in CIT vs. Ghanshyam (HUF) (2009) 315 ITR 1 (SC) which held that interest under Section 28 is to be taxed as part of consideration on receipt basis (supporting assessee position as to timing and character).
The appellant contested the AO's identification of the acquired land, asserting that the acquired land was Gut No.11, Vasangaon (for which a Notice was placed on record) and not Khadgaon, Tq. Latur as taken by the AO; sought to place additional evidence to prove that the compensation related to Vasangaon Gut No.11 and to establish agricultural status.
The appellant also relied on the later Supreme Court decision in Union of India & others vs. Hari Singh & others (2018) 302 CTR 0458 (SC) and contended that that decision should be followed in preference to the jurisdictional High Court decision relied upon by the Revenue/Tribunal (arguing that Hari Singh decided the matter in favour of the assessee).

Respondent's (Revenue's) Arguments

The AO's classification of the interest as taxable under section 56(2)(viii) was correct. The Revenue relied on authorities (including larger Bench decisions of the Supreme Court and decisions of the jurisdictional High Court) holding that interest under Section 28 of the LAA is a revenue receipt and chargeable to tax.
The Revenue placed emphasis on the statutory amendment effected by the Finance (No.2) Act, 2009 (w.e.f. 01-04-2010) which inserted clause (viii) to section 56(2) and Section 145B(1), making interest on compensation or enhanced compensation chargeable to tax under income from other sources in the year of receipt.
It was argued that the Tribunal is bound by the view taken by its jurisdictional High Court (Bombay High Court in Shivajirao) and other relevant High Court decisions (e.g., Punjab & Haryana High Court in Manjeet Singh), and that those authorities support taxing interest under section 56(2)(viii).

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Tribunal
CIT vs. Ghanshyam (HUF) (2009) 315 ITR 1 (SC)	Held that interest under Section 28 of the LAA is to be taxed as part of consideration on receipt basis (supporting view that interest forms part of compensation).	Noted by the Tribunal as the principal authority relied upon by the assessee; the Tribunal observed that subsequent statutory amendment (Finance (No.2) Act, 2009) and later High Court decisions affected the legal position post-Ghanshyam.
Finance (No.2) Act, 2009 (statutory amendment w.e.f. 01-04-2010) — insertion of clause (viii) to section 56(2) and section 145B(1)	Provides that income by way of interest received on compensation/enhanced compensation is chargeable to tax under the head "Income from other sources" and deems such interest to be income of the previous year in which it is received.	The Tribunal treated this statutory amendment as material and noted that it made explicit that interest on compensation is taxable as income from other sources from AY 2010-11 onwards; used this to support upholding the taxation of the interest for the year under consideration.
Manjet Singh (HUF) Karta Manjeet Singh Vs. Union of India (2016) 237 Taxman 0116 (P&H)	Punjab & Haryana High Court decision holding that interest under Section 28 of the LAA is chargeable to tax under section 56(2)(viii); SLP against this decision was dismissed by the Supreme Court on 18-12-2014.	The Tribunal relied on this High Court decision (and noted the dismissal of SLP) as supporting the Revenue's position and as authority that remained intact for the relevant jurisdiction.
Bikram Singh vs. Land Acquisition Collector (1997) 224 ITR 551 (SC)	Judgment of a Larger Bench of the Supreme Court holding that interest under Section 28 (and Section 34) was a revenue receipt and is taxable; follows earlier precedent such as Dr. Shamlal Narula vs. CIT.	The Tribunal noted that the jurisdictional Bombay High Court in Shivajirao followed the Larger Bench in Bikram Singh and that this supported treating interest as chargeable to tax; it relied on the High Court's interpretation which favored Revenue.
Dr. Shamlal Narula vs. CIT (1964) 53 ITR 151 (SC)	Earlier authority referenced by Bikram Singh regarding the taxable nature of interest under acquisition statutes.	The Tribunal recorded that Bikram Singh followed this authority and that the chain of authority was relied upon by the High Court decisions favoring taxation of the interest.
Shivajirao S/o Dnyanoba Ghanwat & Ors. vs. State of Maharashtra & Ors. (WP No.5402 of 2013) (Bombay High Court)	Bombay High Court held that interest under Section 28 is not different in nature from interest under Section 34 and is chargeable to tax; the Court followed the Larger Bench judgment in Bikram Singh.	The Tribunal treated this jurisdictional High Court decision as binding for the Tribunal and followed it (finding no subsequent reversal/modification by the Supreme Court), thereby upholding the CIT(A)'s view to tax the interest.
Union of India & others vs. Hari Singh & others (2018) 302 CTR 0458 (SC)	Supreme Court addressed whether tax was to be deducted at source and held that the AO (not the Collector) should decide whether compensation related to agricultural land and whether tax is payable; directed AO to consider Section 28 and Ghanshyam while determining whether interest amounts to compensation.	The Tribunal found this decision factually different and not dispositive of the narrow question before it (i.e., whether interest under Section 28 is chargeable separately or part of compensation). The Tribunal held Hari Singh did not overrule or modify the jurisdictional High Court decision relied upon and therefore did not alter the result.

Court's Reasoning and Analysis

The Tribunal's analysis proceeded in two parts corresponding to the two issues:

On Taxability of Interest under Section 28 LAA

The Tribunal accepted as indisputable that the net interest income computed by the AO related to interest under Section 28 of the LAA.
The assessee's contention that such interest constituted part of enhanced compensation and therefore exempt (since the land was claimed to be agricultural) was considered; the Tribunal observed the assessee relied on the Supreme Court decision in CIT vs. Ghanshyam (HUF) (2009).
The Tribunal noted a material statutory development: the Finance (No.2) Act, 2009 (w.e.f. 01-04-2010) inserted clause (viii) to section 56(2) and section 145B(1), expressly making interest on compensation/enhanced compensation chargeable to tax under "Income from other sources" in the year of receipt. The Tribunal considered this statutory amendment directly relevant to the taxability question.
The Tribunal then examined judicial authorities: Punjab & Haryana High Court in Manjet Singh (HUF) (which held interest u/s 28 chargeable to tax under section 56(2)(viii) and where an SLP was dismissed), and the jurisdictional Bombay High Court in Shivajirao (which followed the Larger Bench Supreme Court decision in Bikram Singh that interest under Section 28 is a revenue receipt and taxable).
The Tribunal observed that certain decisions favoured the assessee, but emphasized the hierarchical rule that a bench like the Tribunal is bound by the view of its jurisdictional High Court. The Tribunal held it could not read Supreme Court judgments differently from the way its jurisdictional High Court had understood them unless the Supreme Court itself had reversed or modified that High Court view.
The Tribunal considered the appellant's reliance on the later Supreme Court decision in Hari Singh (2018) and concluded that the facts and issues in Hari Singh were materially different: the Supreme Court there directed that the AO determine whether land was agricultural for the purpose of TDS and asked the AO to keep in mind Section 28 and Ghanshyam but did not adjudicate the precise question whether interest under Section 28 is chargeable to tax separately or is part of enhanced compensation. Thus, Hari Singh did not affect the binding nature of the jurisdictional High Court decision.
Combining the statutory amendment, the High Court authorities (Manjet Singh and Shivajirao), and the absence of any Supreme Court reversal of those High Court decisions, the Tribunal concluded that the CIT(A)'s view to tax the interest under section 56(2)(viii) for A.Y. 2013-14 was unexceptionable and must be upheld. Consequently, the ground challenging the addition of Rs.34,16,010 was not allowed.

On the Long-Term Capital Gains Addition (Rs.38,58,365)

The Tribunal outlined the factual conflict: the AO considered that the land acquired was at Khadgaon (within municipal limits of Latur) and thus concluded it was a capital asset and computed LTCG (using DVO value as of 1.4.1981). The assessee contended that the land acquired was Gut No.11, Vasangaon (the piece actually acquired) and furnished a Notice and sought to place additional evidence.
The Tribunal observed that the additional evidence filed by the assessee had not been considered by the AO or the CIT(A) and that there was a complete contrast of versions between the AO and the assessee as to which specific land parcel was acquired.
In the interest of justice, the Tribunal set aside the impugned order on this point and restored the matter to the file of the AO with directions to determine, on the basis of the entire material (including any evidence the assessee may choose to produce), whether the land acquired was Khadgaon or Gut No.11 Vasangaon and thereafter to decide whether it was agricultural land or a capital asset for the purposes of computing tax.
The Tribunal expressly permitted the assessee to place any material before the AO in support of his case as he deems expedient.

Holding and Implications

Core Ruling: The appeal is PARTLY ALLOWED (for statistical purposes) with respect to the issues before the Tribunal.

Specific dispositions:

On the question of taxability of interest under Section 28 of the LAA: the Tribunal upheld the CIT(A)'s order confirming the AO's addition of net interest income of Rs.34,16,010 under section 56(2)(viii). This ground of appeal was not allowed.
On the question of the long-term capital gains addition (Rs.38,58,365): the Tribunal set aside the impugned orders on this point and restored the matter to the AO to determine (i) which land was actually acquired (Khadgaon or Gut No.11 Vasangaon) and (ii) whether that land qualified as agricultural land or a capital asset, allowing the assessee liberty to file material.

Implications: As explicitly reflected in the opinion, the immediate consequence is that the AO/CIT(A) position regarding taxation of interest under section 56(2)(viii) is sustained for AY 2013-14; the LTCG computation is to be revisited by the AO after fresh consideration of the factual material. The Tribunal did not purport to lay down any novel or overriding precedent beyond applying existing statutory amendment and precedent; no broader change in law was declared by the Tribunal in this order.

Disposition and Administrative Details

Order pronounced in Open Court on 05th October, 2020. The order records signatures of (PARTHA SARATHI CHAUDHURY) (Judicial Member) and (R.S. SYAL) (Vice President). The appeal was partly allowed (for statistical purposes) and the file was to be returned to the AO for further action on the remitted issue.

Notes on Availability of Information

This summary is based exclusively on the text of the provided Tribunal opinion. No information beyond that text has been added or inferred.

Show all summary ...

PER R.S.SYAL, VP : This appeal by the assessee is directed against the order passed by the CIT(A)-2, Aurangabad on 27-01-2017 in relation to the assessment year 2013-14.

2. The second issue raised in this appeal, espoused first for the arguments by the ld. AR., is against treating interest of Rs.34,16,010/- received by the assessee u/s. 28 of the Land Acquisition Act, 1984 (hereinafter ` the LAA) as interest income separately chargeable to tax instead of a part and parcel of the sale consideration. Assessee by Shri Sharad Shah Revenue by Shri Deepak Garg Date of hearing 05-10-2020 Date of pronouncement 05-10-2020 ITA No.1012/PUN/2017 Basweshwar Mallikarjun Bidwe

3. Succinctly, the facts of the case are that the assessee filed his return declaring total income of Rs.42,370/-. He received enhanced compensation at Rs.38,19,709/- and interest u/s.28 of the LAA amounting to Rs.68,32,020/- on compulsory acquisition from The Special Land Acquisition Officer (MIW), Latur against the land situated at Village Khadgaon, Tq. Latur. In the column of exempt income in the return, the assessee showed figures of total interest at Rs.68,32,020/- and agriculture income at Rs.2,37,900/-. On being called upon to explain as to why the interest was not shown separately as income u/s.56(2)(viii) of the Income-tax Act, 1961 (hereinafter also called the Act) Act, the assessee made certain submissions which did not find favour with the Assessing Officer (AO). Treating 50% of the interest income as deductible in terms of section 57(iv), the AO added net interest income of Rs.34,16,010/- u/s. 56(2)(viii) of the Act. The ld. CIT(A), relying on certain decisions, which we will advert to in the later part of the order, jettisoned the claim of the assessee thereby approving the view of the AO in bringing to tax the interest income u/s.56(2)(viii) of the Act. Aggrieved thereby, the assessee has approached the Tribunal. ITA No.1012/PUN/2017 Basweshwar Mallikarjun Bidwe

4. We have heard both the sides through virtual court and cogitated over the relevant material on record. Indisputably, the amount of net interest income computed by the AO u/s.56(2)(viii) of the Act pertains to section 28 of the LAA. The assessee treated such amount as part of the enhanced compensation of land and claimed the same as exempt from tax on the ground that the land itself was agricultural. To buttress the contention that interest u/s

28 of the LAA is a part of compensation and hence not chargeable to tax, the ld. AR chiefly relied on the judgment of the Honble Supreme Court in CIT Vs. Ghanshyam (HUF) (2009) 315 ITR 1 (SC) before the Tribunal in which it has been held that interest u/s.28 under The Land Acquisition Act, is to be taxed as part of consideration on receipt basis. This judgment was delivered on 16-07-2009. The Finance (No.2) Act, 2009 w.e.f. 01-04-2010 inserted clause (viii) to section 56(2) providing that: income by way of interest received on compensation or on enhanced compensation referred to in sub-section (1) of section 145B shall be chargeable to income-tax under the head Income from other sources. Section 145B(1) provides that: Notwithstanding anything to the contrary contained in section ITA No.1012/PUN/2017 Basweshwar Mallikarjun Bidwe 145, the interest received by an assessee on any compensation or on enhanced compensation, as the case may be, shall be deemed to be the income of the previous year in which it is received. Thus it is palpable that post the decision in Ghanshyam (supra), a statutory amendment has been carried out providing that income by way of interest received on compensation or on enhanced compensation shall be chargeable to income-tax under the head Income from other sources.

5. The question of taxability of interest received u/s 28 of the LAA came up for consideration before Honble Punjab & Haryana High Court in the case of Manjet Singh (HUF) Karta Manjeet Singh Vs. Union of India (2016) 237 Taxman 0116 (P&H). It noted another judgment of three Judges of the Honble Apex Court in Bikram Singh vs. Land Acquisition Collector, (1997) 224 ITR 551(SC) following Dr. Shamlal Narula vs. CIT (1964) 53 ITR 151 (SC) holding that interest under Section 28 of the 1894 Act was a revenue receipt and is taxable. After considering all the available relevant material including the judgment in Ghanshyam (HUF) (Supra) and also the statutory amendments carried out w.e.f. A.Y. 2010-11, the Honble High Court, vide its judgment dated ITA No.1012/PUN/2017 Basweshwar Mallikarjun Bidwe 14.01.2014, decided this issue in favour of the Revenue by holding that interest u/s.28 of LAA was chargeable to tax u/s. 56(2)(viii) of the Act. The SLP filed against the judgment in the case of Manjet Singh Vs. Union of India has since been dismissed by the Honble Supreme Court on 18-12-2014 (SLP No. 34642 of 2014) holding that Heard ld. Counsel for the petitioners and perused the relevant material. We do not find any legal and valid ground for interference. The special leave petitions are dismissed.

6. Question of deduction of tax at source on interest u/s 28 of the LAA once again came up for consideration before the Honble jurisdictional High Court in a batch of 13 petitions with the lead case of Shivajirao S/o Dnyanoba Ghanwat & Ors. VS. The State of Maharashatra & Ors. (WP No. 5402 of 2013). The petitioners contended that the tax was deducted at source on the entire amount of compensation awarded in Land Acquisition proceedings, including the interest u/s 28 of the Land Acquisition Act, which was not deductible in the light of the judgment of the Honble Supreme Court in Ghanshyam (HUF) (supra). Per contra, the Respondent made out a case that tax at source was rightly deductible as there was no difference between the interest granted ITA No.1012/PUN/2017 Basweshwar Mallikarjun Bidwe u/s 28 and 34 of the LAA. This view was bolstered on the basis of an earlier judgment of the Honble Supreme Court in Bikram Singh (supra) 224 ITR 551 (SC). The Honble Bombay High Court, vide its judgment dated 27.08.2013 (copy at pages 69 onwards of the assessees paper book), recorded the petitioners contention in para

8 and that of the respondent in paras 3 read with 4. In para 5 of the judgment, their Lordships found that: Section 34 casts obligation upon Collector to pay interest after compensation is worked out. Section 28 puts similar obligation upon the Court when the Court finds that the compensation awarded under section 11 was inadequate. Therefore, there is no change in nature of interest either u/s.28 or section 34. Even if court hikes compensation for land and interest is awarded under Section 28 of the Act, upon such increased compensation, in the light of larger Bench judgment, the Department and Disbursing Authorities are bound to effect deduction of TDS. On the interplay between the Honble Apex Court judgments in Ghanshyam (supra) & Bikram Singh (supra), the Honble Bombay High Court in para 4 found the: `issue to be squarely covered by the larger Bench judgment of the Apex court in Bikram Singh (supra). Then it noted in para 9 of the ITA No.1012/PUN/2017 Basweshwar Mallikarjun Bidwe judgment that: We have perused para 24 and 25 of the judgment of the Apex Court in Commissioner of Income Tax Vs. Ghanshyam (supra). We find that the Honble Apex Court there, was not called upon to look into the Larger Bench judgment delivered earlier in case of Bikram Singh (supra). In para 7, the Honble Larger Bench has found that the interest paid u/s.28 is not by way of any charge on compensation determined u/s.23(1). We, therefore, with respect, follow the larger Bench judgment of the Honble Apex Court. Thus it is plentifully lucid that the Honble jurisdictional High Court has categorically held that interest u/s 28 of the Land Acquisition Act is chargeable to tax.

7. The ld. AR submitted that the Honble jurisdictional High Curt has not correctly appreciated the legal position inasmuch as the decision in the case of Ghanshyam (supra) was binding and ought to have been followed. He unsuccessfully tried to convince the Tribunal that the decision rendered by the Honble Bombay High Court should not be preferred over certain other decisions in favour of the assessee. We find that in certain decisions, the issue has been decided in assessees favour. Notwithstanding any contrary view expressed by a non-jurisdictional Honble High Court, the ITA No.1012/PUN/2017 Basweshwar Mallikarjun Bidwe Tribunal, being an authority inferior in hierarchy to its jurisdictional High Court, is bound by the verdict of its superior Honble High Court and cannot read, consider or understand the judgments of the Honble Supreme Court in a way different from the one understood by the Honble jurisdictional High Court unless such a view has been subsequently reversed/modified by the Honble Supreme Court.

8. The ld. AR then submitted that the Honble Supreme Court in Union of India and others Vs. Hari Siingh and others (2018) 302 CTR 0458 (SC) has considered a similar issue and decided the same in favour of the assessee. It was then contended that since the judgment of the Honble jurisdictional High Court was rendered prior to that of Honble Supreme Court in Hari Singh and others (supra), the latter should be followed in preference to the former.

9. We are unable to find any relevance of the judgment of Honble Supreme Court in Hari Singh and others (supra), insofar as the issue under consideration is concerned. In that case, the Land Acquisition Collector deducted tax at source from compensation on account of compulsory acquisition of land and ITA No.1012/PUN/2017 Basweshwar Mallikarjun Bidwe deposited the same with the exchequer. A writ petition was filed in the High court urging that no deduction of tax at source was permissible in view of the provisions of section 194LA of the I.T. Act, since the land which was acquired was agricultural land and this provision categorically mentions that in respect of agricultural land, tax at source was not to be deducted. The Honble High Court directed the Income-tax Department to refund the amount to the collector and held: that the Collector will determine whether the compensation paid is for property other than the agricultural land or otherwise and whether deduction of tax at source was permissible under other provisions of law... Aggrieved thereby, the Revenue approached the Honble Supreme Court pleading that the matter should have been remitted to the AO for deciding the nature of land acquired and not the Collector as it was the AO who was to come to the conclusion whether land was agricultural or not. Accepting the contention on behalf of the Revenue, the Honble Supreme Court held that the claimant should approach the concerned AO and raise the issue that no tax was payable on compensation/enhanced compensation which was received by them as their land was agricultural land. It was further observed ITA No.1012/PUN/2017 Basweshwar Mallikarjun Bidwe that, while determining as to whether the compensation paid was for agricultural land or not, the AO will keep in mind the provisions of Section 28 of the Land Acquisition Act and the law laid down by this Court in CIT, Faridabad Vs. Ghanshyam (HUF) in order to ascertain whether the interest given under the said provision amounts to compensation or not. It is abundantly clear that the judgment in the case of Hari Singh and others (supra) is based an altogether different factual matrix in which the question was as to whether it was the Collector or the AO who will decide as to whether any tax was payable on compensation/enhanced compensation. This issue came to be decided by Honble Supreme Court by holding that the AO was the competent authority. There is no adjudication on the point as to whether interest u/s.28 of the Land Acquisition Act is chargeable to tax separately or part of enhanced compensation. There is a simple direction to the AO to consider this aspect of the matter.

10. In view of the foregoing discussion, it is manifest that the judgment of the Honble jurisdictional High Court holding that interest u/s.28 under the LAA is chargeable to tax, is intact and has not been disturbed in any manner by the Honble Supreme ITA No.1012/PUN/2017 Basweshwar Mallikarjun Bidwe Court in the case of Hari Singh and others (supra). On a specific query, the ld. AR could not point out as to whether the judgment of the Honble jurisdictional High Court in Shivajirao (supra) has been reversed or modified in any manner by the Honble Supreme Court. Respectfully following the judgment of the Honble jurisdictional High Court in Shivajirao (supra) and the judgment of Honble Punjab & Haryana High Court in Manjeet Singh (supra) along with the statutory amendment carried out to section 56(2) inserting clause (viii) w.e.f. 01-04-2010, it is overt that the ld. CIT(A) has taken an unexceptionable view in the matter pertaining to the A.Y. 2013-14. We, therefore, uphold the same. This ground is not allowed.

11. The only other issue which survives in this appeal is against the confirmation of addition of Rs.38,58,365/- as long term capital gain on acquisition of land.

12. The facts anent to this issue are that the assessee received a sum of Rs.39,19,709 on compulsory acquisition of land. The AO noticed that the land acquired was situated at Village Khadgaon, Tq. Latur. Since the land in question comprising 45R was well within the municipal limits of Latur, as was mentioned in para 17 ITA No.1012/PUN/2017 Basweshwar Mallikarjun Bidwe of the award, the AO called upon the assessee to prove his claim of agricultural land. He held that for the purpose of claiming exemption u/s 10(37), it was obligatory on the part of the assessee to prove that the land was being used for agricultural purposes in A.Y. 1994-95 and 1995-96. The assessee could not file any proof regarding the cultivation of land in the above years. The 7/12 extracts submitted by the assessee were found to be pertaining to land at Vasangaon Gut no. 11, which was not acquired by the Government. He held that the land at Khadgaon, acquired by the Government, was an asset u/s 2(14) of the Act. He made a reference to the DVO for determining the value of the said land as on 1.4.1981, which was found at Rs.16,000/- per hector. On this basis, he computed long term capital gain at Rs.38,58,365/-. The ld. CIT(A) affirmed the order of the AO on this count.

13. Before us, the ld. AR contended that the authorities below erred in considering the correct piece of land acquired by the assessee. It was submitted that, in fact, land at Gut No.11, Vasangaon was acquired in respect of which the extant compensation was awarded. He submitted that the AO wrongly took note of some different land at Khadgaon, Tq. Latur, which ITA No.1012/PUN/2017 Basweshwar Mallikarjun Bidwe was not acquired. In support of his contention, the ld. AR placed on record a Notice with reference to land at Vasangaon. Certain additional evidence were also sought to be placed on record to demonstrate that the land of the assessee acquired by the competent authority, which resulted into receipt of the amount, was at Gut No.11 Vasangaon and not Khadgaon, Tq. Latur.

14. There is complete contrast in the version of the AO and the assessee. Whereas the case of the AO is that the land acquired was situated at Khadgaon, the assessee is contending that it was at Gut No. 11 Vasangaon. In support of such a claim, the assessee has filed certain additional evidence, which has not passed through the eyes either of the AO or the CIT(A). In our considered opinion, it would in the interest of justice, if the impugned order is set aside on this score and the matter is restored to the file of AO for determining as to whether the land acquired was at Khadgaon or Gut No. 11 at Vasangaon in the light of the entire material and thereafter to decide whether it was an agricultural land or a capital asset. We order accordingly. Needless to say, the assessee will be at liberty to place any material before the AO in support of his case as he considers expedient. ITA No.1012/PUN/2017 Basweshwar Mallikarjun Bidwe

15. In the result, the appeal is partly allowed for statistical purposes. Order pronounced in the Open Court on 05th October, 2020. Sd/- Sd/- (PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT Pune; Dated : 05th October, 2020 /Copy of the Order is forwarded to:

1. / The Appellant;

2. / The Respondent;

3. The CIT(A)-2, Aurangabad The Pr.CIT-2, Aurangabad , , / DR A, ITAT, Pune

6. / Guard file / BY ORDER, // True Copy // Senior Private Secretary , / ITAT, Pune ITA No.1012/PUN/2017 Basweshwar Mallikarjun Bidwe Date

1. Draft dictated on 05-10-2020 Sr.PS

2. Draft placed before author 05-10-2020 Sr.PS

3. Draft proposed & placed before the second member

4. Draft discussed/approved by Second Member.

5. Approved Draft comes to the Sr.PS/PS Sr.PS

6. Kept for pronouncement on Sr.PS

7. Date of uploading order Sr.PS

8. File sent to the Bench Clerk Sr.PS

9. Date on which file goes to the Head Clerk

10. Date on which file goes to the A.R.

11. Date of dispatch of Order.