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I have carefully considered the findings of the Ld. AO, the written submissions of the Ld. AR and contextualized these to the facts of the case. The issue in dispute relates to whether the impugned transaction is exempt being covered under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act 2013 (hereinafter RFCTLARR) made applicable from January 2014; whereas as per Sections 105& 106 of the RFCTLARR r/w the 4th Schedule of the same Act; The National Highway Authority of India (NHAI), prima-facie is one the bodies covered u/s 106 of the RFCTLARR. It may also be pointed out that per schedule 1 of RFCTLAAR Act compensation includes additional compensation, solatium and any other receipt implying that solatium and interest are part of compensation. The LD AR also cited the Central Board of Direct Taxes circular No. 36/2016 dt. 25.10.2016 which extended the exemption by including compulsorily acquired land without any restriction on area as well as classification of land.
"While determining as to whether the compensation paid was for agricultural land or not, the AOs will keep in mind the provisions of section 28 of the Land Acquisition Act and the law laid done by this court in commissioner of Income Tax, Faridabad V. Ghanshyam (HUF) (2009(8_ SCC412) in order to ascertain whether the interest given under the said provisions amounts to compensation or not."

5.10 This order has been followed by the Hon'ble Chandigarh ITAT in the following cases • ITA Nos. 1413 to 1415/CHD/2016 A.Y. : 2007-08 to 2009-10 Shri Satbir, Vs. The ITO • ITA Nos. 1416 to 1418/CHD/2016 A.Y. : 2007-08 to 2009-10 Shri Ved Pal, Vs. The ITO • ITA Nos. 1419 to 1421/CHD/2016 A.Y. : 2007-08 to 2009-10 Shri Sheo Chand, Vs. The ITO A review petition against the order of the Hon'ble Supreme Court in the case of Union of India vs Hari Singh and Ors. in Civil Appeal No. 15041 of 2017 is in the process of being filed. 5.11 With the passage of the RFCTLARR Act , all compensation received qua this act are not taxable. This has been clarified by the CBDT vide its Circular NO-36/2016, Dated: October 25, 2016. The Circular makes it clear that even where there is no separate deduction allowable in the income tax Act, any compensation covered by Section 105 & 106 of the RFCTLARR Act, (other than compensation u/s 46 of the RFCTLARR Act) is exempt from taxation. In the instant case, what has been taxed by the Ld. AO as interest, may, if the transaction is found to be covered RFCTLARR Act; is as per the terms of Schedule 1 of the RFCTLARR Act in the nature of enhanced compensation. Further solatium within the terms of Section 31 of the RFCTLARR Act is also part of the compensation. The relevant Section 31 is reproduced as under:

8.5 It was contended that the CBDT duly exempt the compensation received under the RFCTLARR Act from the provisions of the Income Tax Act and that the NHAI Act, 1956 is an Act to provide for the declaration of certain highways and for the matters connected therewith. It was further contended that the Circular No. NH 11011/30/2015- LA by the Government of India issued by Ministry of Roads And Transport and Highways, dt. 13/01/2016, have clarified the applicability of provisions of RFCTLARR Act 2013 to NH Act 1956 wherein it has been made clear that " All cases of Land Acquisition where award has not been announced u/s 3G of the NH Act or where such awards have been announced but compensation had not been paid in respect of majority of land holdings under Acquisition as on 31/12/2014, the compensation would be payable in accordance with the First Schedule of The RFCTLARR Act 2013".

2. The RFCTLARR Act which came into effect from 1st January, 2014, in section 96, inter alia provides that income-tax shall not be levied on any award or agreement made (except those made under section 46) under the RFCTLARR Act. Therefore, compensation received for compulsory acquisition of land under the RFCTLARR Act (except those made under section 46 of RFCTLARR Act), is exempted from the levy of income-tax.
3. As no distinction has been 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, the exemption provided under section 96 of the RFCTLARR Act is wider in scope than the tax-exemption provided under the existing provisions of Income-tax Act, 1961. This has created uncertainty in the matter of taxability of compensation received on compulsory acquisition of land, especially those relating to acquisition of non-agricultural land. The matter has been examined by the Board and it is hereby clarified that compensation received in respect of award or agreement which has been exempted from levy of income-tax vide section 96 of the RFCTLARR Act shall also not be taxable under the provisions of Income-tax Act, 1961 even if there is no specific provision of exemption for such compensation in the Income-tax Act, 1961.