BALAKRISHNAN versus UNION OF INDIA & ORS.

Citation: [2017] 1 S.C.R. 519 · Decided: 11-01-2017 · Supreme Court of India · Bench: A.K. SIKRI · Disposal: Appeal(s) allowed

Judgment (excerpt)

[2017] 1S.C.R.519 
BALAKRISHNAN 
v. 
UNION OF INDIA & .ORS. 
(Civil Appeal No. 344 of2017) 
JANUARY 11, 2017 
[A. K. SIKRI AND R. K. AGRAWAL, JJ.) 
Income Tax Act, 1961 - ss. 10(37) and 148 - Capital gains 
tax - Exemption ji-0111 - Agricultural land of landlord-appellant 
acquired under Land Acquisition Act - Compensation fixed by the 
award was not acceptable to the landlord - Hence, he entered into 
negotiation with the beneficiary of the acquisition to get the 
compensation commensurate with market rate and arrived at 
amicable settlement - After entering into agreement with the 
beneficiary, landlord executed sale-deed in favour of the 
beneficiary - Revenue initiated proceedings uls. 148 - Direction 
was issued to the Assessing Officer to assess the income of assessee 
by not granting exemption u/s. 10(3 7) as the transaction of land 
was not by way of compulsory acquisition - Direction challenged 
by landlord - Courts' below upheld the stand of Revenue - On 
appeal, held: The land in question was compulsorily acquired -
Merely because the compensation amount was agreed upon, would 
not change the character of acquisition from that of compulsory 
acquisition to the voluntary sale - Even under Right to Fair 
Compensation and Transparency in Land Acuqisition, Rehabilitation 
and Resettlement Act, 2013, the Collector is entitled to pass 
rehabilitation and resettlement award with the consent of the parties/ 
landowners - Therefore, the proceedings 1tls. 148 are quashed. 
Allowing the appeal, the Court 
HELD: Insofar as acquisition of the land is concerned, the 
same was compulsorily acquired as the entire procedure 
prescribed under the Land Acqu'.sition Act, 1894 was followed. 
The settlement took place o .. iy qua the amount of the 
compensation which was to be received by the appellant for the 
land which had been acquired. Had the steps not been taken by 
the Government under Sections 4 & 6 followed by award under 
Section 9 of the Land Acquisition Act, the appellant would not 
519 
A 
B 
c 
D 
E 
F 
G 
H 
520 
A 
B 
c 
D 
SUPREME COURT REPORTS 
(20 I 7] I S.C.R. 
have agreed to divest the.land belonging to him to the beneficiary 
of the acquisition. He was compelled to do so because of the 
compulsory acquisition and to avoid litigation entered into 
negotiations and settled the final compensation. Merely because 
the compensation amount is. agreed upon would not change the 
character of acquisition from that of compulsory acquisition to 
the voluntary sale. This is now the procedure which is laid down 
even under the Right to Fair Compensation and Transparency in 
Land Acquisition, Rehabilitation and Resettlement Act, 2013 as 
per which tlie Collector can pass rehabilitation and resettlement 
award with the consent of the parties/land owners. Nonetheless, 
the character of acquisition remains compulsory. Therefore, the 
proceedings under Section 148 of the Income Tax Act are 
quashed. [Paras 8 and 10) (523-G-H; 524-A-C, G-H] 
Info Park Kera/a v. Assistant Commissioner of Income 
Tax (2008) 4 KLT 782 - overruled. 
Case Law Reference 
(2008) 4 KLT 782 
overruled 
Para6 
CIVIL APPELLATE JURISDICTION : Civil Appeal No. 344 of 
2017. 
E 
From the Judgment and Order dated I 9.02.2014 of the High Court 
ofKerala at Ernakulam in W.A. N. 240 of2014. 
K. Radhakrishnan, Sr. Adv. Ms. Kiran Bhardwaj, Adv. for the 
Appellant. 
H. R. Rao, Ms. Niranjana Singh, Arijit Prasad, R. M. Bajaj, 
F 
Mrs. Anil Katiyar, Advs. for the Respondents. 
G 
H 
The Judgment of the Court was delivered by 
A.. K. SIKRI, J, 1. Leave granted. 
2. Heard the matter finally at this stage with the consent of the 
parties as it was fixed for final disposal. 
3. The question of law that is raised in this appeal and squarely 
arises for consideration is the :following: 
"Whether, on the facts and circumstances of the case, the High 
Court was justified in denying the claim for exemption under 
Section 10(3 7) of the Income Tax Act, 1961 to the appellant?" 
• 
BALAKRISHNAN v. UNION OF INDIA & ORS. 
521 
[A. K. SIKRI, J.l 
4. This question has arisen under the following circumstances: 
A 
The appellant was the owner of 27.70 Acres of land in Sy. No. 
18.60 hectares of paddy field in Block No. I 7 of Attippra village in 
Thiruvananthapuram District comprised in Sy. No. 293/8. This was 
agricultural land. The appellant was using the same to grow paddy. 
5. The Government of Kerala sought to acquire the aforesaid 
property of the appellant for the public pu

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