In Brief
The appellant, owner of 27.70 acres of agricultural land in Kerala, had his property compulsorily acquired by the Government under the Land Acquisition Act, 1894 for Techno Park development. After the acquisition award, the parties negotiated and settled on a higher compensation amount (Rs. 38,42,489). The Income Tax Department initially refunded TDS under Section 10(37) (exemption for compulsory acquisition), but later reopened the assessment, claiming it was a voluntary sale. The Supreme Court held that compulsory acquisition status is determined by completion of statutory procedures, not by subsequent compensation negotiations. The Court allowed the appeal, quashed the reopening proceedings, and overruled a Kerala High Court judgment suggesting execution of a sale deed indicated voluntary transaction.
The lawyer headnote and full judgment text are available to registered users.