I-T notice may derail Essar Steel's land acquisition bid

In a setback to the land acquisition process for Essar Steel's pelletisation project at Paradeep, the Income Tax (IT) department has served a showcase notice on the special land acquisition officer of Jagatsinghpur for non-deduction of IT from the compensation package of the affected villagers.

It may be recalled that earlier, the IT department had issued a directive to the special land acquisition officer (SLAO) to deduct IT at the rate of 10 per cent on the lines of Tax Deducted a Source (TDS) in cases where the compensation exceeded Rs one lakh.

As per the rules of the IT department, the villagers of Bijaychandpur had to pay IT as the villages came under the urban limit.

 

Nearly 244 land losers of Bijaychandpur were affected by Essar Steel's project and the total IT deduction from the compensation of these land losees worked out to be Rs 1.88 crore

Despite the directive of the IT department, Nrusingh Swain, the SLAO had disbursed Rs 18 crore to 244 land losers of Bijaychandpur village without deducting IT.

The IT department has accused the SLAO of violating the IT Act of 1961 and has asked the latter to appear on March 15 to provide explanation on the matter.

Sources said Essar Steel is keen to resolve the issue in order to expedite the land acquisition process and the company authorities have agreed to pay the tax on behalf of the land losers.

Though Essar Steel had agreed to pay a compensation of Rs 19.1 lakh acre, its land acquisition had almost come to a grinding halt with the land losers stiffly opposing the move to deduct IT. The IT department's decision to deduct IT had sparked off protests from the land losers and they had demanded to hike the compensation to Rs 50-70 lakh per acre.

Essar Steel need to acquire 1663 acres of private land from seven villages including out of which 218 acres had to be acquired from Bijaychandpur.