TMI Blog2015 (2) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... icultural purpose at any time in the preceding two years from the date when the transfer took place. We, accordingly, set aside the order of CIT(A) and restore the order of the AO and direct the AO not to allow the exemption to the Assessee u/s 54B. - Decided in favour of revenue. - ITA No. 202/PNJ/2013 - - - Dated:- 14-8-2014 - Shri P. K. Bansal And Shri D. T. Garasia,JJ. For the Petitioner : Ashok B. Naik, Tax Consultant For the Respondent : B. Barthakur, Ld. DR ORDER Per P. K. Bansal 1. These appeals have been filed by the Revenue against the orders of CIT(A) dt. 22.5.2013 for A.Y 2007-08 by taking the following effective grounds of appeal : 2. On the facts and circumstances of the case and in law, the ld. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... husband and wife and whatever income is earned is equally divided between the two. The AO initiated proceedings u/s 147 on the basis of the information that in the impugned assessment year the Assessee sold property situated at Calapur Village, St. Cruz, Goa for a consideration of ₹ 1,75,00,000/- and the said property was liable to Capital Gains tax. The Assessees in their return claimed Short Term Capital Gains of ₹ 1,15,15,490/- as exempt u/s 54B as they have already purchased other agricultural land on 18.8.2006 and 12.12.2006 for ₹ 98,80,260/- and ₹ 27,25,070/- respectively. The AO noted that the agricultural land was not used by the Assessee or his parent for agricultural purposes for a period of two years imme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... land and that the appellant had actually carried on agricultural activities during the period of his holding the land in question. Therefore, in my opinion, since the appellant has fulfilled all the conditions provided in Sec. 54B, the A.O. is directed to allow the set-off for purchase of land u/s 54B. This Ground of Appeal of the appellant is allowed accordingly. 2.1 The ld. DR before us referred to the provisions of Sec. 54B and relied on the order of the AO while the ld. AR relied on the order of CIT(A) as well as on the following cases : i) CIT vs. Minguel Chandra Pais Anr., 282 ITR 618 (Bom) ii) CWT vs. H.V. Mungale, 145 ITR 208 (Bom) iii) CIT vs. Smt. Debbie Alemao, 331 ITR 59 (Bom) 2.2 We heard the rival submission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the following provisions of this section, that is to say,-- (i) if the amount of the capital gain is greater than the cost of the land so purchased (hereinafter referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year ; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be nil ; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45 ; and for the purpose of computing in respect of the new asset any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r agricultural purpose in the two years immediately preceding the date of the sale. The words used in Sec. 54B(i) are in the two years immediately preceding the date on which the transfer took place was being used by the Assessee or a parent of his for agricultural purposes (hereinafter referred to as the original asset) . From these words, in our opinion, it is essential that the land against which the Assessee is claiming exemption must have been in the immediately preceding two years used by the Assessee or a parent of his for agricultural purposes. The words being used denotes that the land must have been continuously used by the Assessee or his parent in the two years immediately preceding the sale. In the case of the Assessee, we n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars by the Assessee or his parent for availing of the exemption u/s 54B. 2.2.2 We have also gone through the decision of the Hon'ble Bombay High Court in the case of CIT vs. Smt. Debbie Alemao, 331 ITR 59. In this case, the question before the Hon'ble High Court was whether on the facts and circumstances of the case, impugned land could be termed as agricultural land. In this case, the Assessee purchased land for a sum of ₹ 8 lacs under Sale Deed dt. 28.2.1988 as an agricultural land but sold it on 3.9.1990 i.e. after expiry of two years. The sale was not prior to two years. In this case also, the question before the Hon'ble High Court did not relate to the interpretation of provisions of Sec. 54B whether the land shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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