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TMI Blog2015 (7) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... of the case, the Ld. Commissioner of Income Tax (Appeals)-I, Ahmedabad, has grossly erred in allowing the legitimate exemption u/s 54B to the extent of Rs. 39,38,100/- being the sale consideration received as per registered sale deed only. She has not allowed the legitimate deduction u/s 54B on the 'on money' received on sale of agriculture land. The same may kindly be directed to be allowed legitimate deduction of Rs. 92,47,100/- claimed u/s 54B on full sale consideration i.e. as per 'registered sale deed' + 'on money' received on sale of said agriculture land. 3) On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals)-I, Ahmedabad, has grossly erred in confirming the charging of interest u/s.234A, 234B, 234C & 234D of the Act. He may be directed to withdraw the same. 4) On the facts and in the circumstances of the case, the Ld. Commissioner of Income Tax (Appeals)-I, Ahmedabad, has grossly erred in confirming the initiation of penalty proceedings u/s. 271(1)(c) & 271AAA r.w.s. 274 of the Act. He may be directed to withdraw the same. 2.1 In IT(SS)A No. 24/Ahd/2015, Revenue has filed the appeal on the following grounds: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings, the authorized representative of the assessee was given opportunity to prove that agricultural activities were being carried out on the land in respect of which the assessee has claimed the exemption. The assessee was asked to furnish complete details of the crops cultivated and the income generated therefrom alongwith the copies of bills for purchase of seeds, fertilizers, pesticides, etc., details of irrigation facility and also the copies of 7/12 extract and complete bills in respect of the crops sold. The A R. has not been able to produce any details / evidence in respect of the agricultural activities carried out by the assesses on the land sold in respect of which exemption is claimed despite given adequate opportunity. Further, the assessee has submitted an agreement with Shri Dalpatsinh Abhaysinh Chauhan, who is claimed to be an agriculturist. As per this agreement, Shri Dalpatsinh A. Chauhan has the right to carry out agricultural activity on the land and is obliged to share part of the produce. Thus, primarily the assessee deriving agricultural income, if any, in the form of rent rather than by carrying out agricultural activities. The assessee, thus, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... esse being an individual or his parents which is not fulfilled in this case. Accordingly, order of CIT(A) on this issue be set aside and that of Assessing Officer should be restored. On other hand, learned Authorized Representative submitted that CIT(A) has grossly erred in not allowing the legitimate deduction u/s.54B on full sale consideration i.e. as per registered sale deed + on money received on sale of said agricultural land and supported the order of CIT(A) to the extent relief granted by him as opposed by Revenue in its appeal. 5. After going through rival submissions and material on record, we find that assesse being co-owner has sold various agricultural land and claimed exemption u/s.54B as detailed above. Question before us are that: i. Whether assesse is eligible to that relief u/s.54B of the Act, 1961 while computing capital gain. ii. Whether relief in computation u/s.54B of the Income Tax Act,1961 can be claimed against unaccounted additional sale receipt in the form of on money not reflected in sale consideration. It is not in dispute that assessee's relevant record for agriculture i.e. 7/12 reveals the crops at the said land at relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The relevant revenue record reveals that during two years immediately preceding to the relevant year, the crops were grown at the land in question. Assessing Officer rejected the claim u/s.54B of the Act, 1961 on the ground that assesse was not in cultivatory possession of the land in question and he did not produce the evidence of expenditure on agriculture and has not shown agricultural income in his return and revenue record i.e. Form No.7/12 is beyond two years immediately preceding year to the relevant assessment order. 5.1 As per Section 54B of the Income Tax Act, assesse has to establish the fact that land in question is being used by assesse for agricultural purpose in two years immediately preceding the relevant two assessment years. So, agricultural activity on the land in question cannot be negated on the basis of not shown agricultural income it its return of income. It does not affect assessee's claim u/s. 54B of the Income Tax Act, once, it is established that land was being used for agricultural purpose, assessee becomes entitled for claim u/s.54B of the Income Tax Act. In case before us, assesse has proved beyond doubt on the basis of relevant revenue record ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned capital gain income from sale of Gatrad land. Out of this income Rs. 8 crore is out of books. I have accepted this in my statement given at my residence and I will disclose this income in F.Y. 2010-11". As shown in chart of sale consideration and amount of exemption claim u/s.54B of the Income Tax Act, 1961 on capital gain, Assessing Officer has taken sale consideration including on money disclosed by assessee. Assessing Officer has rejected the claim u/s.54B of the Act, 1961 for the reason mentioned in his order mainly the reason that land was not used by assessee personally and use of land for agriculture purpose. Condition to claim 54B claim was not fulfilled as stated above. Assessing Officer has fully rejected claim u/s. 54B of Income Tax Act, hence, he has not discussed the treatment of on money for the purpose of claim u/s. 54B of the Act, 1961. 6.1 At the appellate proceeding, assessee was asked to explain that claim u/s. 54B of Income Tax Act, 1961 be allowed against on money received by him out of books. He explained that after disclosure u/s. 132(4) of Income Tax Act, 1961, money so received has become part of his sale consideration and was eligible for claim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sp;1287140 6 Yatin K. Prajapati 1229325 4729724 5959049 2829574 21645350 80000002 101645352 64771324 On going through above table, it may be seen that assessee has received Rs. 1,90,88,759/- (including on money) (Assessing Officer has taken Rs. 95,25,836/- only on which the exemption u/s.54B was claimed) on account of sale consideration of of Gatrad land. The said sale consideration includes mount of sale consideration shown in sale deed and on money received thereon. Out of sale consideration received, assessee has invested Rs. 92,47,100/- (Assessing Officer has mistakenly taken as Rs. 90,90,582/-) in another new agriculture land within the prescribed period. Assessee is entitled for relief of exemption u/s.54B to the extent of his contribution of Rs. 92,47,100/- (which has been mistakenly taken by Assessing Officer as Rs. 90,90,582/-) towards purchase of new agriculture land out of sale consideration received of Rs. 1,90,88,759/- (including on money) (Assessing Officer has taken Rs. 95,25,836/- only) on account of sale of Gatrad agriculture land. Assessing Officer has not allowed the exemption u/s.54B on the ground ..... X X X X Extracts X X X X X X X X Extracts X X X X
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