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2013 (9) TMI 559 - AT - Income TaxAgricultural income or not - AO denied the exemption and treated the same as income from other sources - Held that:- finding of the lower authorities goes against the revenue records which show that the land was under cultivation during the financial year 2006-07 and for 2004-05 and also against VRO’s Certificate. Being so, in our opinion, the certificate issued by the VRO, who is concerned revenue authority to issue the said certificate has to be relied upon and it is not possible to reject the same without examining the deponent - the agricultural income declared by the assessee is to be accepted as agricultural income only. - decision of the Supreme Court in the case of Mehta Parikh & Company vs. CIT [1956 (5) TMI 4 - SUPREME Court] followed - Decided in favor of assessee. Exemption u/s 54B - purchase of agriculture land - Computation of Capital Gains - Exemption u/s 54B - Treating the land sold by the assessee as nonagricultural land – Held that:- The lower authorities were justified in determining the land in question, as capital asset liable for income-tax - With regard to determination of cost of acquisition of the land disposed of, we are of the opinion that considering the proximity of the land to the city, it was reasonable to fix the value of as on 1.4.1981 at Rs.30,000 per acre, instead of Rs.10,000 determined by the Assessing Officer, as against Rs.1,40,000 claimed by the assessee. One of the reasons for which the claim of the assessee for relief under S.54B was rejected by the assessing officer was that what was paid by the assessee was only an advance for purchase, and unless it was actual purchase of land, assessee would not be entitled for relief under S.54B. There was some merit in this reasoning of the assessing officer - However, in terms of S.54B of the Act, assessee had to purchase the agricultural land within a period of two years. Hence, though mere payment of advance does not entitled the assessee for relief under S.54B of the Act, if ultimately whole transaction of purchase of land was completed within a period of two years as contemplated under S.54B of the Act, assessee was entitled for relief under S.54B of the Act - we set aside the orders of the lower authorities, and restored this issue to the file of the assessing officer for verifying whether the assessee had purchased the agricultural lands within a period of two years, so as to qualify for relief under S.54B of the Act, and accordingly re-decide this issue in accordance with law and after giving reasonable opportunity of hearing to the assessee.
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