Additional comensation on acquisition of land

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Querist : Anonymous

Querist : Anonymous (Querist)

19 November 2016 an assessee who inherited a land before 1/4/81 and it was compulsorily acquired by state govt for consruction of bus stand in 1987 for which compensation was received by the assessee in in 1987 and filed return. Upon appeal to high court he got enhanced compensation in financial year 2015-16. I want to know date of transfer for additional compensation& Litigation expenses where to enter in itr 4 ( Assessee also have business income)

CA SUNIL K GARG

CA SUNIL K GARG (Expert)
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19 November 2016 As per section 45(5) of Income Tax Act, 1961 enhanced compensation will be taxable in the year of receipt of compensation under the head of Capital Gain. Sales Consideration will be the amount received, cost of purchase be nil and expenses on litigation can be claimed as deduction.

CA SUNIL K GARG

CA SUNIL K GARG (Expert)
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19 November 2016 further , if the compensation is receivied by the aseesees on any interim order of court or tribunal , than it will be taxable only in the year in which final order is receivied.

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