IN THE INCOME TAX APPELLATE TRIBUNAL “PATNA” BENCH, PATNA BEFORE SHRI DUVVURU RL REDDY, VP AND SHRI RAJESH KUMAR, AM (Assessment Year:2016-17)

Dharmavir Kumar DC/ACIT, Circle-4, C/o Naseeb Prasad, Income Tax Department, Lok PaithaniNathpur,Narayan Chak, Nayak Jai Prakash Bhavan, New Vs.

Phulwari. Dak Bunglow Road, Bihar-800002 Patna-800001, Bihar (Appellant) (

Respondent)

PAN No. AVZPK4382P Assessee by : Shri Sudeep Sinha, AR Revenue by : Shri Md. A.H. Chowdhary, DR Date of hearing: 26.11.2025 Date of pronouncement: 09.12.2025

O R D E R

Per Rajesh Kumar, AM:

This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 18.12.2024 for the AY 2016-17.

2. The assessee has raised following grounds of appeal:-

“1. For that the Ld. CIT(A) has erred both in law and on facts.

2. For that the Ld. CIT(A) has erred in confirming the addition of compensation of Rs.4,71,91,650 in the hands of the appellant u/s 50C of the Income Tax Act, 1961 under the head capital gains.

3. For that section 50C is not a charging section. It simply says what would be the full consideration for the purpose of section 48 of the Income Tax Act, 1961 to compute the income chargeable under head capital gains.

4. For that section 48 is the charging section and section 50C is just procedural in nature as to what would be the full value of consideration for the purpose of section 48 of the Act and therefore, the Ld. CIT(A) is wrong in justifying the addition made under section 50C of the I.T. Act, 1961.

5. For that in case of compulsory acquisition of a capital asset being land or building or both, the provisions of Section 50C cannot be applied as the question of payment of stamp duty for effecting such transfer does not arise. In the instant case, the property was acquired under the provisions of the National Highways Act 1956. The property vests by operation of the said statute and there is no requirement for payment of stamp duty in such vesting of property.

6. For that the appellant has not sold the property but rather it was compulsorily acquired by the Government for construction of road under National Highway Act, 1956. The compensation received on compulsory acquisition could not be the capital gain u/s 48 of the I.T. Act, 1961.

7. For that the land was acquired as per notification of Ministry of Road Transportation and National Highway, New Delhi dated 14.01.2013 which was published in the Gazette of India by the District Land Acquisition Officer, Patna for construction of four lane National Highway 30 – 84, Patna Buxar. As per the copy of the order sheet of District Land Acquisition Officer, Patna it may be seen that the acquired land was agricultural land.

8. For that the agricultural land situated in the village Nathupur, Phulwari, Patna belonging to the appellant was compulsorily acquired for construction of National Highway as notified in the Gazette of India dated 14.01.2013 and the compensation of Rs.4,71,91,650 so received, is exempt from Income tax as clarified by the CBDT vide its circular no.36 of 2016 which says that compulsory acquisition of land under the RFCTLARR Act, 2013 is exempt from Income tax under section 96 of the RFCTLARR Act and therefore, the Ld. CIT(A) has erred in confirming the addition made under section

50C of the I.T. Act, 1961.

9. For that from the perspective of computing capital gain according to general provisions of the Act, the capital gains shall be computed as per section 48 by deducting from the full value of consideration received or accruing as a result of the transfer of the capital asset, the expenditure incurred in connection with such transfer and the cost of acquisition of the asset and the cost of any improvement thereto. In the present case, the land acquired, was purchased by the father and uncles of the appellant and therefore, the Ld. CIT(A) has erred in not deducting the cost of acquisition as per section 49 of the I.T. a