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2017 (1) TMI 815 - AT - Income TaxAgricultural income - nature of transfer - whether the said agricultural land was used for agricultural purposes before the date of transfer - nature of land - Held that:- We find that both the lower authorities have grossly erred in dismissing the claim of the assessee merely on the strength of the probable uses of the said agricultural land by the purchaser M/s. Attune Inc. We fail to understand the observations of the A.O. which has been confirmed by the ld. CIT(A), that the onus for converting the agricultural land for nonagricultural purpose is upon the firm M/s. Attune Inc. as per the MOU. As mentioned earlier, the assessee is not responsible for the acts of the purchaser of the land. All that we are concerned about is whether the said agricultural land was used for agricultural purposes before the date of transfer and after going through the documentary evidences, the answer is “YES”. In our considered opinion, if an agricultural operation does not result in generation of surplus that cannot be a ground to say that the land was not used for the agricultural purpose. The said land was entered in the revenue records as an agricultural land. It is also not in dispute that no permission was ever obtained for non-agricultural use by the assessee. Since no evidence has been brought to show that it was used for nonagricultural purposes, nor there is any evidence to show that the assessee has ever taken permission for non-agricultural uses, the profit earned on sale of the impugned land was agricultural income of assessee liable to be exempt from tax. - Decided in favour of assessee Denial of the claim of deduction u/s. 54F - whether legal claim can be made before the First Appellate Authority also ? - Held that:- There is no dispute that the assessee has paid a sum of ₹ 42.25 lacs. It is also not in dispute that the assessee has entered into two Banakhata one pertaining to the land and the other pertaining to the construction. The assessee had purchased one constructed house for a total consideration of ₹ 42.25 lacs within the prescribed period mentioned in Section 54F of the Act. Merely, because the claim was made by a revised return which was not a valid return in the eyes of the law, the claim of exemption cannot be denied because a legal claim can be made before the First Appellate Authority also and the First Appellate Authority should have entertained the claim of the assessee. Thus we direct the A.O. to allow the claim of the assessee u/s. 54F of the Act. See Pruthvi Brokers and Shareholders Pvt. Ltd. [2012 (7) TMI 158 - BOMBAY HIGH COURT] - Decided in favour of assessee
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