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2015 (11) TMI 1195

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..... is no finding to this effect in the assessment order. From the second page onwards till the end of impugned assessment order, there is only reference to claim of Section 54B of the Act. Thus in our view, this crucial aspect of land in question agriculture or residential plots, it’s being sold by way of plots in sq. yards become necessary for allowability of claim. Record does not reveal that these were considered or inquired. Thus there is a total lack of enquiry on these aspects besides whether the agricultural income was earned or not from this very land. In our considered view, the assessment order suffers from lack of enquiry on these crucial aspects and it is not a case of partial inquiry as pleaded to be covered by the judgement of H .....

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..... sessee. In response to notice, the assessee vide application dated 25-04-2011 requested to treat the return already filed as in compliance to notice u/s 148 of the Act. The basis and reasons for reopening of the assessment was to the effect that the deduction u/s 54B of the Act claimed by assessee qua sale of Sohna land was wrongly allowed as one half of the new agriculture land was purchased in the name of the assessee's wife Smt. Anita Rajni. Consequently, claim u/s 54B of the Act was restricted to ₹ 15,51,730/-. 2.2 The ld. CIT called for the record and found that the assessment order passed by the AO was erroneous and prejudicial to the interest of the Revenue as enquiries were not made by the AO while allowing deduction u/ .....

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..... assessee. These facts clearly show that the AO made proper enquiry and applied his mind. Therefore, he disallowed 1/2 of claim u/s 54B of the Act. Since due inquiries were made, his order cannot be held to be erroneous and prejudicial to the interest of the revenue. (ii) In the return for the assessment year 2005-06, the assessee had declared agricultural income of ₹ 10,140/- which was accepted vide assessment u/s 143(3). The previous record was also before the AO and must have been verified by him. The suspicion of the ld. CIT that land sold was not used for agricultural purposes is not justified and cannot be a valid basis for action u/s 263 of the Act. (iii) The assessee vide letter dated 31-01-2013 had enclosed the copy of t .....

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..... eril India Ltd. 203 ITR 108, 113, 114 (Bom.) (HC) (vi) CIT Vs. Amit Corpn. (2012) 213 Taxman 19 (Guj.) (HC) (Mag.) (vii) CIT Vs. Leisure Wear Exports Ltd. (2011) 341 ITR 166/ 202 Taxman 130 (Magz.) (Delhi)(HC) 2.5 Ld. AR further pleaded that the order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue which has been passed after due enquiries and proper verification of the case. Therefore, the assumption of jurisdiction u/s 263 is untenable. Thus the order of the ld. CIT may be quashed. 2.6 On the other and, the ld. DR contends that: i. Ld. CIT has given a clear finding that on perusal of the record, the copy of jamabandi was not found and a copy of jamabandi for financial year 2001-02 was fo .....

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..... u/s 263. Besides he has adopted a reasonable view in setting aside the assessment order for fresh consideration after giving the assessee adequate opportunity of being heard. 2.7 We have heard the rival contentions and perused the materials available on record. It has not been disputed by the assessee that agricultural income was not shown in this year, the claim of there being agricultural income rests on preceding year. The agricultural income shown in earlier year has not been demonstrated to be earned from the land which is sold in the form of plots by the assessee. It is a settled law that burden to prove the eligibility for claim of deduction and exemption is on the assessee. While examining the record under sec. 263, CIT has to s .....

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