The Shenyang Intermediate People's Court ordered the government of Hunnan District to pay 81,600 yuan (USD 13,000) as compensation to 73-year-old Zhang Heyuan.
The order came as China observed the "Tomb Sweeping Festival" when millions burn paper offerings to their dead relatives in a tradition dating back thousands of years.
Offerings to the dead have been found at some of China's oldest grave sites. The festival was declared a national holiday in 2007.
The government claimed the burials were "unauthorised" and removed the tombs after issuing an ultimatum.
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The verdict recognised the tombs as historical legacies and Zhang's property.
The government was ordered to pay compensation for 17 of the destroyed tombs that belonged to Zhang's family, state-run Xinhua news agency.
Shrinking land resources have prompted local Chinese governments to launch campaigns to clear burial mounds in the countryside and transfer the remains to public cemeteries, often triggering controversy.