Court rules tax deduction required on compensation for buildings, not agricultural land or trees, in land acquisition case.

Case Name:

Commissioner of Income Tax(TDS) vs. Special Land Acquisition Officer (High Court of Gujarat at Ahmedabad)

Key Takeaways:

- Tax deduction under Section 194LA is required for compensation paid for acquiring immovable property other than agricultural land. - Lands shown as agricultural in revenue records enjoy a rebuttable presumption of being agricultural land, unless proven otherwise. - Compensation for trees is considered part of compensation for agricultural land and not subject to tax deduction. - Compensation for buildings does not fall under agricultural land and is subject to tax deduction, even if the land itself is agricultural. **Issue:** Whether the Special Land Acquisition Officer was required to deduct tax at source under Section 194LA when paying compensation for acquiring lands, buildings, and trees. **Facts:** - The SLAO acquired lands for a company and paid compensation to landowners through awards. - The awards segregated compensation for land, buildings, and trees. - Most lands were classified as non-irrigated agricultural lands in revenue records and compensated at Rs. 300 per sq. m. - Compensation for buildings was a substantial portion of the total compensation. - The Revenue argued that the lands were not agricultural, so tax should have been deducted on the compensation. - The SLAO contended that the lands were agricultural, and no tax was required. **Arguments:** Revenue's Arguments: - The lands were not capable of cultivation, so they were not agricultural lands. - The SLAO should have deducted tax on compensation for lands, buildings, and trees. - Reliance was placed on the Assessing Officer's inquiry and a certificate from the District Agricultural Officer. SLAO's Arguments: - The lands were shown as agricultural in revenue records, raising a presumption of being agricultural. - There was no evidence that the lands were not capable of agricultural use. - Compensation for trees should be treated as part of compensation for agricultural land. - Buildings were erected by farmers for residence or agricultural operations, so their compensation should be treated as part of compensation for agricultural land. **Key Legal Precedents:** - Commissioner of Income-tax v. Madhabhai H. Patel (1994) 208 ITR 638 (Guj): Lands shown as agricultural in revenue records enjoy a rebuttable presumption of being agricultural land. - Commissioner of Income-tax v. Gemini Pictures Circuit Private Ltd. (1996) 220 ITR 43 (SC): Each case depends on its facts, and no hard and fast rules can be laid down. **Judgment:** - The court held that the mere award by the SLAO is not conclusive on whether the land is agricultural. - The Revenue did not have sufficient material to rebut the presumption that the lands were agricultural, based on revenue records. - Compensation for trees is part of compensation for agricultural land and not subject to tax deduction under Section 194LA. - Compensation for buildings does not fall under agricultural land and is subject to tax deduction, even if the land itself is agricultural. - The Tribunal erred in reversing the Revenue authorities' order regarding tax deduction on compensation for buildings. - The court partially allowed the Revenue's appeal, holding that tax deduction was required for compensation paid for buildings but not for agricultural land or trees. **FAQs:** 1. **What is the significance of lands being shown as agricultural in revenue records?** Lands shown as agricultural in revenue records enjoy a rebuttable presumption of being agricultural land, unless there is cogent evidence to prove otherwise. 2. **Why was compensation for trees not subject to tax deduction?** Compensation for trees was considered part of compensation for agricultural land, which is exempt from tax deduction under Section 194LA. 3. **Why was compensation for buildings subject to tax deduction?** Compensation for buildings does not fall under the definition of agricultural land and is considered immovable property subject to tax deduction under Section 194LA, even if the land itself is agricultural. 4. **Can the SLAO be asked to pay the tax again if the landowners have already paid tax on the compensation?** The court left it open for the SLAO to raise the contention before the Assessing Officer that the landowners have already paid tax on the compensation, based on the Supreme Court's decision in Hindustan Coca Cola Beverage P. Ltd. v. Commissioner of Income Tax. 5. **What is the key legal principle established in this case?** The case reinforces the principle that lands shown as agricultural in revenue records enjoy a rebuttable presumption of being agricultural land, and compensation for buildings is subject to tax deduction under Section 194LA, even if the land itself is agricultural.

1. The Revenue is in appeal against the judgement of the Income Tax Appellate Tribunal (“the Tribunal” for short) dated 18.8.2010. While admitting the appeal, following substantial questions of law were framed :

“(A) Whether the Tribunal below committed substantial error of law in holding that the land in question was an agricultural land by totally misinterpreting the provisions contained in Section 194LA of the Income Tax Act including the explanation given thereto.

(B) Whether the Tribunal below committed substantial error of law in holding that the land in question is an agricultural land by not following the principle laid down by the Division Bench of this Court in the case of Maganlal Morarbhai vs. Commissioner of Income Tax reported in (1979) 118 ITR 224.”

2. Brief facts are as under. The respondent Special Land Acquisition Officer, Surat, represents the State Government as an assessee. For the assessment year 2008-­2009, the question of requirement of depositing tax at source under section 194LA of the Income Tax Act, 1961 (“the Act” for short) arose in the backdrop of land acquisition proceedings instituted by the State Government for acquiring certain parcels of lands for and on behalf of M/s. Essar Steels Ltd., a public limited company. The Special Land Acquisition Officer passed a common judgement and separate awards concerning different landowners whose lands were under acquisition. In one such award dated 21.1.2008, he awarded compensation to different landowners which basically included three elements. (1) compensation for land; (2) compensation for buildings situated on the land; (3) compensation for trees.

3. All lands were divided into non irrigated agricultural lands and Kharaba lands. Agricultural lands were compensated at a uniform rate of Rs.300 per sq. mtrs., Kharaba lands received compensation at the rate of Rs.1 per Are. In this award, Land Acquisition Officer awarded a total of Rs.36,95,77,294/­ towards compensation for land, Rs.24,56,56,141/­ towards compensation for buildings and Rs.55,68,700/­ towards compensation for trees. On such compensation, the Land Acquisition Officer awarded 30% solatium, additional compensation at the rate of 12% under section 23(1A) and awarded total compensation of Rs.92,16,11,136/­. Like­wise, for another block of lands, the Land Acquisition Officer had awarded total compensation of Rs.56,27,55,035/­.

4. According to the Revenue, majority of these lands under acquisition were not agricultural lands. Compensation towards such lands therefore, invited capital gains. The compensation for the building and trees also like­wise invited taxes in the hands of the recipients. In terms of section 194LA of the Act, therefore, the Land Acquisition Officer was required to deduct tax at source at the prescribed rate. Since he failed to do so, the Assessing Officer instituted proceedings against the Special Land Acquisition Officer under section 201 of the Act.

5. The Assessing Officer passed an order dated 29.1.2009 in which he held that the assessee, though required, had failed to deduct tax under section 194LA of the Act. He was therefore, to be treated as an assessee in default. He was therefore, required to pay an amount of Rs.8,42,85,887/­ which was computed as under :

“i) Amount paid for acquisition

a) Land Rs.36,09,43,438/­

b) Construction, Trees etc. Rs.38,29,74,373/­

Total payment Rs.74,39,17,811/­

Details of tax working as under :

ii) Amount of TDS deductible @ 10% Rs.7,43,91,781/­

iii) Surcharge thereon @ Rs. 74,39,178/­

iv) Education cess Rs. 24,54,928/­

Total Rs.8,42,85,887/­”

6. In the said order, he observed that for a land to be considered as an agricultural land, it should be either generating such income or capable of doing so. He was of the opinion that the land could be categorised as agricultural land as far as the land is under cultivation and it must involve expenditure of human labour and skill for the purpose of cultivation or for keeping it in a cultivable state. So far as compensation for buildings is concerned, he was of the opinion that the buildings were for the purpose of residence of farmers and compensation for such buildings would be chargeable to tax.

7. The assessee carried the matter in appeal and argued that the lands were agricultural lands so shown in the revenue records. The compensation was worked out on such basis. There was nothing on record to suggest that the lands were not being put to cultivation.

8. CIT(Appeals) however, observed that the revenue records in this respect would not be conclusive. The real test would be whether the lands are being put to agricultural use or it is possible to put to agricultural use. He referred to the letter dated 16.6.2004 issued by the Agricultural Officer in which it was recorded that in parts of the land, sea water at the time of high tide ingressed. Part of the land was covered by grass and wild trees. There is no irrigation facility in any of the lands and only Kharif crops would grow. Of the total land, portion of land giving good yield is very small. On the basis of the contents of the said letter of the District Agricultural Officer, the CIT (Appeals) confirmed the view of the Assessing Officer holding that the lands in question cannot be stated to be agricultural lands and therefore, not excluded from the regime of deduction of tax under section 194LA of the Act.

9. The assessee carried the matter in appeal before the Tribunal. The Tribunal noted that the definition of land for the purpose of section 194LA is more restrictive than under section 2(14) of the Act. Regarding compensation for trees, the Tribunal observed that there can be no separate identification only of the trees. The trees are not separately defined as part of immovable property under section 194LA of the Act and would only form part of the land. Regarding compensation of the buildings, the Tribunal observed that the compensation was paid by the Land Acquisition Officer for the lands along with the houses as a composite asset and houses cannot be separated from the lands, which was agricultural land. The Tribunal further observed that :

“29.5 We observe from the part of compensation paid that the State Government has determined a uniform rate to every chunk of land so acquired which in fact could not be a market reality, therefore, farmers' houses standing on the land which could fetch a higher price in the market was considered for payment of higher amount to such land owners. Therefore, in reality, what is paid to the farmers on account of buildings, could not be really be the compensation for buildings, but was higher amount of compensation paid for acquiring better land fetching higher price in the market.”

10. This judgement, the Revenue has challenged in the present tax appeal.

11. Learned counsel Shri Manish Bhatt for the Revenue raised the following contentions :

1) The Tribunal committed a serious error in ignoring the fact that the Assessing Officer had carried out the detail inquiry about the nature of the land and come to specific conclusion that the lands were not possible of any cultivation. These lands were therefore, not agricultural lands.

2) The Tribunal placed too much reliance on the fact that the lands were shown as agricultural lands in the revenue records.

3) So far as compensation for the trees is concerned, the same would not form part of the compensation for agricultural lands acquired.

4) At any rate the compensation for the buildings attract the provisions of section 194LA of the Act, which the Land Acquisition Officer failed to apply.

5) Counsel placed reliance on the decision of Division Bench of this Court in case of Commissioner of Income-tax v. Madhabhai H. Patel reported in (1994) 208 ITR 638(Guj) and on the decision of the Supreme Court in case of Commissioner of Income­tax v. Gemini Pictures Circuit Private Ltd. reported in (1996) 220 ITR 43(SC).

12. On the other hand, learned counsel Shri Soparkar represented the respondent Special Land Acquisition Officer and raised the following contentions :

1) The lands were shown as agricultural lands in the revenue records and that is how the compensation was awarded by the Special Land Acquisition Officer. For the purpose of deducting tax at source, these were sufficient indications that the lands were agricultural lands. It is always open for the Revenue to make a detailed inquiry while considering the tax liability of the owners of the land.

2) There was nothing on record to suggest that the lands were not or were not capable of being put to agricultural use. Personal inquiry by the Assessing Officer many years later would be futile since by then the land was already acquired and handed over to the company who would have changed the character of the land.

3) So far as the trees are concerned, there is no provision under section 194LA of the Act to deduct the tax for compensation thereof, since it does not form part of immovable property as defined in the said section. If the trees are seen as forming part of the land under acquisition, the land itself being an agricultural land, compensation for the trees would receive the same treatment.

4) Insofar as the compensation for the buildings is concerned, the counsel submitted that the buildings were erected by the farmers for their residence or for carrying out agricultural operations. The compensation for the buildings therefore, must be treated as part of compensation for acquisition of agricultural lands.

13. In order to resolve the controversy, we may notice the statutory provisions. Section 194LA of the Act pertains to payment of compensation on acquisition of certain immovable property and reads as under :

“194LA. Any person responsible for paying to a resident any sum, being in the nature of compensation or the enhanced compensation or the consideration or the enhanced consideration on account of compulsory acquisition, under any law for the time being in force, of any immovable property (other than agricultural land), shall, at the time of payment of such sum in cash or by issue of a cheque or draft or by any other mode, whichever is earlier, deduct an amount equal to ten per cent of such sum as income­tax thereon:

Provided that no deduction shall be made under this section where the amount of such payment or, as the case may be, the aggregate amount of such payments to a resident during the financial year does not exceed [two] hundred thousand rupees.

Explanation.—For the purposes of this section,—

(i) "agricultural land" means agricultural land in India including land situate in any area referred to in items (a) and (b) of sub­clause (iii) of clause (14) of section 2;

(ii) "immovable property" means any land (other than agricultural land) or any building or part of a building.]

14. Since the explanation to section 194LA refers to clause(14) of section, we may reproduce the relevant portion thereof :

“(14) "capital asset" means

[(iii) agricultural land in India, not being land situate— (a) in any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand; or

[(b) in any area within the distance, measured aerially,—

(I) not being more than two kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten thousand but not exceeding one lakh; or

(II) not being more than six kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than one lakh but not exceeding ten lakh; or

(III) not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a) and which has a population of more than ten lakh.

Explanation—For the purposes of this sub­clause, “population' means the population according to the last preceding census of which the relevant figures have been published before the first day of the previous year]]”

15. As is well known section 201 of the Act provides for consequences for failure to deduct tax at source.

16. Section 194LA thus casts a duty on a person responsible for paying compensation on account of compulsory acquisition of any immovable property (other than agricultural land) to deduct at the time of payment of such compensation, an amount equal to ten per cent of such sum as income­tax. Proviso to section 194LA however, provides that no such deduction shall be made if aggregate amount of such payments during the financial year does not exceed two lacs. Explanation to section 194LA provides definitions of agricultural land and immovable property. As per clause (i) of the explanation the agricultural land means agricultural land in India including land situated in any area referred to in clauses (a) and (b) of sub-clause (iii) of clause (14) of section 2. Thus any agricultural land situated in India would by virtue of this explanation be treated as an agricultural land for the purpose of section 194LA, even if it happens to be one referred to in clauses(a) and (b) of sub­clause(iii) of clause (14) of section 2 and consequently any compensation for acquisition of such land would be out of the purview of requirement of deducting tax at source. The term immovable property has been defined as to mean any land (other than agricultural land) or any building or part of a building.

17. It is in this context the question arises whether the land under acquisition would be stated to be an agricultural land or not. We have noticed that the acquisition awards granted compensation for all non irrigated agricultural lands at a uniform rate of Rs.300 per sq. mtrs. Kharaba lands or waste lands were awarded compensation at the rate of Rs. 1 per Are. Perusal of these awards would show that major portion perhaps more than 95% of the land area was treated as non irrigated Jirayat land. A small portion of certain survey numbers formed as Kharaba land.

18. The fact that these lands were shown as agricultural lands in the revenue records is not in dispute. The fact that the Land Acquisition Officer awarded compensation treating such lands as agricultural lands is also not in dispute. According to the Assessing Officer however, these lands could not have been treated as agricultural lands. For such purpose, he relied on two factors. First was his own inquiry by carrying out personal visit to the lands and second was the certificate issued by the District Agricultural Officer on 16.6.2004. Even the Commissioner (Appeals) has placed considerable stress on these two factors.

19. Before we advert to these aspects, we may refer to the decision of this Court in case of Madhabhai H. Patel(supra). In the said case, the question whether the land was agricultural land or not arose in the background of the provision of capital gain upon sale of land. The Court after referring to various tests laid down in case of Commissioner of Income tax v. Siddharth J Desai reported in (1983) 139 ITR 628 (Guj), observed as under :

“13. Even in that decision, this court has again emphasised that if the land is classified in the revenue records as agricultural land, then it would raise a rebuttable presumption and would furnish good prima facie evidence to show that it is an agricultural land. This court also emphasised that if land is also used for agricultural purpose till the date of the sale, then, unless there is some cogent evidence to indicate otherwise, the land should be treated as agricultural land.

14. In our opinion, what is required to be considered is : Was it agricultural land when it was sold ? If the land is recorded as agricultural land in the revenue records and if till the date of its sale it is used and exploited as agricultural land, and if the owner of the land had not taken any step, which would indicate his intention to exploit the land thereafter as non­agricultural land, then such a piece of land will have to be regarded as agricultural even though it is included within the municipal limits or it is sold on a per square yard basis and not acreage basis.

The purpose for which such a land is sold, though not relevant, will not have that much importance and weight as it would have been in a case where the land has remained as Padatar or idle or is used for agricultural purposes only by way of a stop­gap arrangement. So far as the facts of this case are concerned, there is no dispute that the land, till it was sold, was classified as agricultural land in the revenue records. In the village Forms Nos. VII and XII, popularly known as "record of rights", it is mentioned that the whole of the land was cultivated till the year 1967­-68.

The land was cultivated personally by the assessee. The said land belonged to the family and he got it by way of inheritance and not by way of purchase from some other party. There is no material which discloses that attempt was made by the assessee either to purchase or sell any other land in the past. He had not, at any point of time, applied for permission to use the land for non­-agricultural purposes. All these factors have been taken into consideration along with the other relevant factors, viz., that the land was sold to a co­operative housing society; that it was sold at Rs. 20 per sq. yard, and that it was situated within the corporation limits of Ahmedabad city. It is, therefore, not possible for us to say that the view taken by the Tribunal is unreasonable or erroneous in law. Even if we have to consider the intention of the assessee, when he decided to sell the land, it becomes clear that he wanted to sell the land as agricultural land. In the agreement dated December 18, 1963, it is in terms stated that the assessee was selling the land as agricultural land only and, therefore, was not going to sign any application or plan for a non­agricultural use of the said land. There is no material to show that the assessee had taken any part either in getting the plots subdivided into sub­plots, or in getting the plans prepared and passed for non­agricultural use. All those steps were taken by the purchaser of the land and not by the assessee. Thus, the Tribunal, after considering all the relevant factors and also the decision of the Supreme Court in CWT v. Officer­in­Charge (Court of Words), Paigah [1976] 105 ITR 133, wherein the Supreme Court has held that the expression, "agricultural land" for the purpose of the Wealth­tax Act would mean the land actually used for agricultural purpose, has held that the land in question is an agricultural land. It is, therefore, not possible to accept the contention raised on behalf of the Revenue that the Tribunal committed an error in holding that the land in question was agricultural land. In this view of the matter, we answer the question in the affirmative, that is, against the Revenue and in favour of the assessee.

No order as to costs.”

20. The Supreme Court in case of Gemini Pictures Circuit Private Ltd. (supra) observed that each case would depend on its peculiar facts and no two cases would be identical. The tests evolved by the Courts are in the nature of guidelines and no hard and fast rules can be laid down in the matter. The observations of this Court in case of Gordhanbhai Kahandas Dalwadi v. Commissioner of Income Tax reported in (1981) 127 ITR 664 (Guj) were noted with approval. In the said case, the land was registered as an agricultural land in the revenue records and the land revenue was being paid thereon. No permission was taken for converting it to non agricultural use before the sale of land. Potential non agricultural use or the fact that development had taken place in the vicinity of land, was held not to militate against the fact that it was agricultural land.

21. Thus the fact that a particular land is treated as an agricultural land in the revenue records and so treated since long and continues to invite land revenue seems to be strong prima facie factors to suggest that the land was agricultural land. The Courts have of­course held that this would be a rebuttal presumption and if in a given case, it is shown that the land was never put to or was capable of being put to agricultural use, the same may still be considered as non agricultural land.

22. In this context, we are prepared to accept the revenue's contention that mere award by the Land Acquisition Officer would not be conclusive. This is so for two reasons. Firstly, the aim and object of passing an award under the Land Acquisition Act, 1894, is to arrive at a just compensation for compulsory acquisition of the property of a citizen. The paramount consideration before the Special Land Acquisition officer at that stage is to ascertain the market value of the land under acquisition as on the relevant date i.e. date of publication of section 4 notification. Quite apart from the very character of the land being agricultural or otherwise, range of other factors would be relevant for such purpose including the non agricultural use potential of the land. On the other hand, the applicability of section 194LA of the Act would depend on whether the compensation which is being paid is for an immovable property which is in the nature of an agricultural land or otherwise. Such question when so needed can be decided only by the Assessing Officer and the view of the Land Acquisition Officer expressed in acquisition award would not be final, binding or conclusive.

23. Nevertheless, at the stage of deciding whether the Special Land Acquisition Officer committed an error in not collecting the tax at source while releasing the compensation, vital question would be, did the Assessing Officer have sufficient materials to ignore the Government land records in which the land is shown as an agricultural land on which the owners continue to pay the land revenue year after year.

24. In this context, we have noticed that the Revenue authority placed heavy reliance on two factors, One was the personal visit by the Assessing Officer and the other was the certificate issued by the District Agricultural Officer dated 16.6.2004. The visit, as correctly pointed out by the counsel for the respondent, would have taken place few years after the acquisition was completed and possession of the land was handed over to the company for whose benefit the acquisition was carried out. The character of the land also would have undergone major changes. It would be highly unsafe to rely on a spot visit by the Assessing Officer of such circumstances to overrule the initial presumption available from the revenue records that the lands were agricultural lands. Like­wise, the certificate of the Agricultural Officer was also general in nature and did not pinpoint whether and what portion of the land was totally uncultivable. The award does segregate the Kharaba land for compensation at a much lower rate of Rs.1 per Are as against the Jirayat land which were compensated at the rate of Rs.300 per sq. mtrs. The observations of the Assessing Officer that there was no facility of irrigation and that part of the land, suffered from ingress of saline water, would not indicate that the entire parcel of land or at any rate substantial portion thereof was either not put to agricultural use or was not capable of so using.

25. We may however, clarify that these are observations made only for the purpose of deciding the applicability of section 194LA of the Act and would not preclude the revenue from pursuing the issue in the context of tax liability of the persons receiving the compensation for the land acquired.

26. Coming to the question of acquisition of trees, we notice that total compensation of Rs.55.68 lacs was paid under the award dated 21.1.2008 against the compensation for land at Rs.36.95 crores. Similar figures appear in other award also. Section 194LA applies when the compensation for acquisition of immovable property is being disbursed. Term 'immovable property' has been explained in clause(ii) of the Explanation to section 194LA as to mean any land (other than agricultural land) or any building or part of a building. If the trees are seen separate from the agricultural land, it would not form part of this immovable property. If on the other hand, such trees are seen as part of the land under acquisition, the same would form compensation for acquisition of agricultural land. We may also notice that many of these trees are fruit bearing trees. Any compensation for loss of fruit bearing trees must necessarily be part of the compensation for agricultural land. The Land Acquisition Officer while awarding the compensation would determine the market value of the land and in cases where such land also has fruit bearing trees, would separately compensate for loss of such trees.

In view of such factors, we do not seen any applicability of section 194LA for compensation to the trees.

27. Coming to the last element of controversy regarding the compensation for buildings, at the outset, we are somewhat surprised by the observations of the Tribunal that the State Government had determined a uniform rate for the land under acquisition which could not be a market reality and therefore, for the farmers' houses standing on the land, higher market rate was considered for such landowners. In the opinion of the Tribunal, therefore, in reality what was paid to the farmers on account of buildings was not a compensation for buildings, but was higher amount of compensation for acquisition of the lands.

28. These observations are not borne out from the awards, copies of which are placed on record, or from any other contemporaneous material suggesting any adjustment on part of the State Government in determining the market value of the land. We do not find on what basis the Tribunal was prompted to make such observations. In any case, being de­hors the evidence on record, we discard such conclusion of the Tribunal.

29. What therefore, emerges from the record is that the Land Acquisition Officer bifurcated his award by awarding separate compensation for the land, for the building and for the trees. The compensation for the building comprised substantial portion of total compensation so worked out. For example, in the award dated 21.1.2008, against compensation of Rs.36.95 crores for the land, compensation of Rs.24.56 crores was assessed for building. Like­wise, in other award, against value of land of Rs.30.08 crores, cost of construction inclusive of trees was shown to be Rs.26.18 crores.

30. There is nothing on record to suggest that the buildings in question were only small residential units of the farmers who were cultivating the land or that they were in the nature of go­down for storing the agricultural implements or agricultural produce. Even if therefore, the lands were in the nature of agricultural lands, for the purpose of deducting tax under section 194LA of the Act, the question of deducting tax on the compensation for buildings would certainly arise. The buildings do not form part of the agricultural lands or at any rate have not been shown to be in the nature of small farm houses or go-downs for agricultural operations. The Tribunal therefore, committed an error in reversing the orders of the revenue authorities with respect to the applicability of section 194LA qua the compensation for the buildings.

31. At this stage, learned counsel for the respondent however, submitted that the assessments have been carried out with respect to entire compensation concerning all the recipients of the compensation and they have, to the extent found liable have also discharged the tax liability. In view of the judgement in case of Hindustan Coca Cola Beverage P. Ltd. v. Commissioner of Income tax reported in (2007) 293 ITR 226(SC), the Land Acquisition Officer cannot be asked to pay the tax again.

32. In absence of any clear evidence on this aspect, we leave it for the respondent to raise such a contention before the Assessing Officer and produce necessary evidence while the Assessing Officer gives the effect of this judgement.

33. In the result, we answer the questions accordingly and partially in favour of the revenue and dispose of this tax appeal.

(AKIL KURESHI, J.)

(A.J. SHASTRI, J.)