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2023 (12) TMI 707 - ITAT KOLKATARectification proceedings u/s 154 - Nature of land sold - capital gain arising from the sale of agricultural land - entitlement to exemption u/s 54B - apparent mistakes noticed by AO was that the assessee had claimed exemption u/s 54 of the Act but this Section relates to profit on sale of property used for residence and cannot apply on the case of the assessee where agricultural land has been sold -AO also observed that even Section 54F cannot be applied because the same pertains to capital gain on transfer of certain capital assets not to be charged in case of investment in residential house - HELD THAT:- So far as the finding of the lower authorities that the assessee did not provide this fact during the course of assessment proceedings, we note that during the course of rectification proceedings, though the same were initiated by the Assessing Officer but once certain facts were placed before the Assessing Officer during the course of such rectification proceedings, then he ought to have taken note of the same and should have dealt with the said contentions. It has been consistently held by the Hon’ble Courts that no tax can be levied or collected except by the authority of law and that if the assessee by mistake or inadvertence or on account of ignorance included in his income any amount which is non-taxable or is not income within the contemplation of law, the assessee may bring the same to the notice of the Assessing Officer to which if the Assessing Officer is satisfied, he may grant the assessee necessary relief and refund the tax paid in excess. When the assessee had given sufficient documentary evidence during the course of the rectification proceedings that the agricultural land sold during the year do not fall under the category of capital asset u/s 2(14) of the Act and inadvertently the assessee has shown it as a capital asset in the Income tax return, therefore, the assessee deserves to succeed and we accordingly hold that the capital gain arising from the sale of agricultural land in question is exempt from tax. Since we have allowed this claim of the assessee that the agricultural land sold during the year is not a capital asset and gain arising from there is exempt from tax, the remaining grounds raised by the assessee becomes merely academic in nature, still we would like to take note of the fact that the assessee also deserves to succeed on the alternative ground that even if the agricultural land is considered as capital asset, even then the assessee who has sold agricultural land and has purchased the agricultural land within a period of two years, after the date of sale for a total purchase consideration of Rs. 97,55,000/-, the assessee is entitled for exemption u/s 54B of the Act for the total sum of Rs. 97,55,000/- or the long term capita gain arising from sale of agricultural land whichever is lower. Thus, the grounds raised by the assessee are allowed.
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