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2019 (10) TMI 649 - ITAT JAIPURRevision u/s 263 - Claim of deduction u/s 54B - sale of agriculture land after plotting to 19 persons - purchase of another agriculture land - HELD THAT:- It is a clear case of complete lack of enquiry on the part of the AO which renders the assessment order erroneous in so far as it is prejudicial to the interests of the revenue. We note that in the Sale Deed the description of the plot of land has been given with residential plot number situated in a newly developed residential colony, namely, Shanti Nath Nagar-II, Ajmer road, Kekri. This fact is also corroborated by the map of the said colony attached to the registered Sale Deed. Therefore, it is not a simple case of sale of the land by dividing into plots but the assessee has developed the land in question into a residential colony, namely, Shanti Nath Nagar-II. Once the land was converted into residential colony, it was no more an agricultural land in terms of section 54B therefore, even if the land sold is treated as capital asset, it has lost its character of agricultural land not being used for agricultural purpose and consequently the deduction u/s 54B cannot be allowed as the necessary condition prescribed in the said section is not satisfied. Since the ld. Principal Commissioner of Income Tax has set aside the assessment order to the record of the Assessing Officer for fresh consideration, therefore, we do not find any reason to interfere with the impugned order of the learned Principal Commissioner of Income Tax. The decisions relied upon by the ld. A/R of the assessee are entirely on different aspects where the land was sold by the assessee by dividing into plots and therefore, it was held that there was no change of character from capital asset to stock-in-trade. In the case in hand, the issue is not limited to the capital gain or business income but the issue is allowing the deduction u/s 54B without conducting a minimum enquiry by the AO whether the conditions prescribed under section 54B are satisfied or not. - Decided against assessee.
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