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TMI Blog2013 (12) TMI 1050X X X X Extracts X X X X X X X X Extracts X X X X ..... tle in view of the Muslim law. 3. The brief facts of the issue are that during the previous year relevant to the assessment year 2007-08, there was sale of ancestral property pertaining to their forefathers. After their demise the land was mutated in the names of these assessees for the purpose of convenience and brevity. According to the assessees, all the heirs of such forefathers are having preexisting shares in the ancestral property as per Muslim law and as such the said amount was reduced from total consideration for computing capital gain. This claim was disallowed by the lower authorities on the ground that a part of sale consideration was paid to 7 sons and 3 daughters for which there is no provision under the Income-tax Act. According to the assessees these persons are having overriding title on the property. In view of this, payment has been made to the brothers and sisters of the forefathers and it should be allowed as per the opinion of Darul-Ifta Jamia Nizamia. 4. The Departmental representative relied on the orders of the lower authorities. 5. We have heard both the parties and perused the material on record. Under section 48 of the Act, cost of certain assets sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isters of forefathers. This ground is rejected on the same reasons as given by us in the above paras. 9. The next ground common to all the 10 appeals is treating the land as capital asset though it is situated beyond 8 k.m. from Hyderabad Municipal limits. The contention of the assessee that "this agricultural land was in Rajendra Nagar Mandal and is not a notified areas under the Income-tax Act. Hence such agricultural land are not capital asset as per section 2(14) of the Income-tax Act. Hence, capital gains tax is not attracted" was also not accepted due to the following reasons. Here the fact is that the assessee's land exists at Peeramcheruvu village of Rajendra Nagar Mandal, but not Rajendra Nagar municipality. This land is clearly situated within 8 k.m. from the local limits of Hyderabad Municipal Corporation which is a notified area. The assessee failed to produce the evidences that this land is a situated in Rajendra Nagar municipality. This lane is situated at Rajendra Nagar Mandal and this Rajendra Nagar Mandal became municipality and merged with Greater Hyderabad Municipal Corporation later on. Furthermore, this land comes under Peeramcheruvu Village which is rural are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 2012 held as follows : "We have considered the rival submissions. We do not find merit in the contention of the assessee. The land in question giving rise to capital gain was, in fact, urban land though agricultural operations have been carried out on them. The assessee placed before the lower authorities pahani patrika, VRO's certificate and details of electricity bill/slab pass book, etc. We have held on that basis in earlier paras that the assessee derived agricultural income. But, the question still remains whether the impugned land come within the meaning of 'capital asset'. The land is situated at Narsing Village of Rajendra Nagar Mandal, R. R. District which is within the municipal limits of Rajendra Nagar. According to the learned counsel for the assessee, Rajendra municipality is not notified by the Central Government and therefore the agricultural lands which fall under the jurisdiction of the Rajendra Nagar Mandal cannot be considered as capital asset within the meaning of section 2(14) of the Income-tax Act. But, the fact is that this is urban land akin to the Hyderabad Municipality situated within 8 k.m. f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital gain tax. The learned authorised representative submitted that the assessees raised this ground before the Commissioner of Income-tax (Appeals) and the Commissioner of Income-tax (Appeals) has not adjudicated the same. The learned authorised representative drew our attention to the copy of order of Mandal Revenue Officer (MRO), Rajendra Nagar Mandal, Rangareddi District dated March 4, 1999, Reference No. 4739/99 which is placed on record. According to this order, the property bearing Sy. No. 21, Peeramcheruvu village an extent of 0.09 acres the nomenclature was changed from inam to patta with effect from March 4, 1999. The property was sold in the month of February, 2007. Being so, in the assessment year under consideration the property cannot be treated as inam land as the character of the land has been changed. Accordingly, this ground is rejected. 16. The next ground in ITA Nos. 773, 774, 775, 777, 778, 851, 852 and 853/ Hyd/2012 (eight appeals) is with regard to non-granting of deduction under section 54F of the Act. 17. According to the learned counsel for the assessee the assessees herein invested the consideration received on sale of capital asset in construction of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch capital gain shall not be charged under section 45 ; (b) if the cost of the new asset is less than the net consideration in respect of the original asset, so much of the capital gain as bears to the whole of the capital gain the same proportion as the cost of the new asset bears to the net consideration, shall not be charged under section 45 : Provided that nothing contained in this sub-section shall apply where (a) the assessee, (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset ; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset ; or (iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset ; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head 'Income fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ette, frame in this behalf and such return shall be accompanied by proof of such deposit ; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase or construction of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset : Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then, (i) the amount by which (a) the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of the new asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1), exceeds (b) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchase or construction of the new asset within the period specified in sub-section (1) been the cost of the new asset, shall be charged under section 45 as income of the previous year in which the period of three years from the date of the transfer of the original asset expires ; and (ii ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in section 54F of the Act. The assessees have not placed any cogent evidence, so that it can be inferred that actually there was construction of residential building out of the sale proceeds of the sale of land and also not placed evidence for the purchase of any materials relating to construction of residential building. Merely producing a copy of permission from Gram Panchayat with regard to construction permission by itself cannot discharge the assessees from proving actual construction. 21. We, therefore, are of the considered opinion that the legislative intent was not achieved. The assessees could not produce any evidence in support of the fact that there was actually any construction within the stipulated time under section 54F of the Act. In view of this, we are of the view that the Commissioner of Income-tax (Appeals) was justified in disallowing the claim of exemption under section 54F of the Act in all these cases. Accordingly, the ground relating to allowability of deduction under section 54F of the Act is rejected and the orders of the lower authorities are confirmed. 22. The next ground is with regard to non-granting of deduction under section 54B of the Act. This ..... X X X X Extracts X X X X X X X X Extracts X X X X
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