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2019 (8) TMI 1316 - AT - Income TaxReassessment u/s. 147- allowability of assessee to exemption u/s. 54B denied - non availability of file containing reasons to believe - HELD THAT:- The assessee had pleaded for copy of reasons recorded under the RTI Act, 2005 and in response to the said application, the AO has given a copy of the assessment order to the assessee, but has informed the assessee that assessment records for AY 2010-11 was not readily traceable and reasons recorded would be furnished as soon as records are available. Even in the proceedings before the Tribunal, the department has informed that appeals may be decided on merits, rather than on validity of initiation of proceedings u/s. 147. Initiation of reassessment proceedings have not been established to have been in accordance with the requirements of section 147. There is no material brought to our notice that reasons were recorded before issue of notice u/s.148 which is a sine quo non for valid initiation of reassessment proceedings u/s.147 - no tangible material coming into the possession of AO after expiry of period of limitation for framing assessment order u/s. 143(3) based on which, he came to the conclusion that there has been escapement of income chargeable to tax. The department has also not been able to show before the Tribunal the reasons recorded to justify the validity of initiation of reassessment proceedings u/s. 147. In these circumstances, drawing an adverse inference, we hold that initiation of reassessment proceedings u/s. 147 were not valid. Deduction u/s 54B - As far as merits of the addition is concerned, it is seen that the assessee has invested a sum of ₹ 4.68 crores by paying advance for purchase of agricultural lands. It is not disputed that had the sale been completed pursuant to those agreements, the assessee would be entitled to benefits of deduction u/s. 54B. It is also not disputed that due to pending litigation, the sale could not be completed between these parties. However, in respect of agreement between assessee and Narayanappa & Others., the litigation has ended and assessee had got title of property on 03.07.2019, copy of the sale deed was filed before us. We are of the view that even otherwise, the assessee has complied with the conditions for grant of deduction u/s. 54B inasmuch as he has utilised, within a period of two years from the date of transfer of capital asset, the capital gain in purchasing another land for being used for agricultural purposes. The fact that the assessee did not get legal title to the lands is no ground to deny the benefit of deduction u/s. 54B.- Decided in favour of assessee
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