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2019 (7) TMI 175 - AT - Income TaxRevision u/s 263 - allowability of deduction u/s 54B - claim allowed by the A.O. based on the agreement to purchase of agricultural land - transfer of agricultural land by Scheduled Caste person was prohibited under Land Reforms Act of State of Rajasthan - HELD THAT:- The assessee has accepted the fact that after the said agreement, sale deed could not be executed due to the reason that the agricultural land could not be transferred by the seller in favour of the assessee as prohibited by the law. The assessee has claimed that once the assessee has paid the consideration and the possession was handed over to the assessee then it amounts to transfer in terms of Section 2(47)(v) & (vi). No merit in the contention of the ld AR because of the simple fact that the agricultural land belonging to the Scheduled Caste cannot be transferred to non- Scheduled Caste person until and unless the same is converted to non-agricultural land. Even if the said agricultural land can be transferred in future after converting the same from agricultural to non-agricultural land, it would not be a case of purchase of agricultural land but it must be purchase of non-agricultural land. The moment, the agricultural land is converted to non-agricultural land, it loses the character of agricultural land and consequently the said investment would not be eligible for deduction U/s 54B. In the case in hand when the transfer itself is prohibited then the alleged agreement would not bring the case in the category of transfer of ownership without any formal deed of title. Further we find that the order of the A.O. is erroneous so far as the crucial aspect and the very basis of allowability of deduction U/s 54B of the Act was not considered by the A.O. and hence we find that the PCIT has rightly invoked the provisions of Section 263 when the claim of the assessee is absolutely impermissible under law. Accordingly, no error or illegality in the impugned revision order of the ld. PCIT, Alwar passed U/s 263 - Decided against assessee.
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