TMI Blog2012 (2) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... erited 1/4th share of land having an extent of 1.10 acres from her father along with others. The said land was sold for a consideration of ₹ 44 lakhs on 14.11.2004 and accordingly the assessee received her share of 11 lakhs on it. The assessee returned NIL amount of capital gain on the said sale. The said land was purchased by her father in 1969 and after his death, the assessee and others inherited the same. As per the relevant provisions, the assessee has an option to adopt the market value as on 1.4.1981 as the cost, if the property had been purchased earlier to that date. Accordingly, while working out the Long term capital gain, the assessee took the market value of the land as on 1.4.1981 at ₹ 10,000/-. It was also claimed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ieved, the assessee is in appeal before us. 5. We have heard the rival contentions and carefully perused the record. We shall deal with the issue of eligibility of exemption u/s 54B of the Act. Though the assessee did not claim exemption u/s 54B in her return of income, she has claimed the same before the AO in the assessment proceedings. Sec.54B provides for exemption of the capital gain arising on transfer of land used for agricultural purposes, if the said capital gain is invested in purchase of another land for being used for agricultural purposes, subject to other conditions provided in that section. In order to avail exemption u/s 54B, it has to be established that the land that was sold had been used for agricultural purposes in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ipulated in section 54B has been fulfilled by the assessee for the purpose of claiming deduction u/s 54B which relates to capital gain on transfer of land used for agricultural purpose. In view of what has been stated above, the action of the assessing officer in rejecting the claim of the assessee that the property sold by the assessee is agricultural in nature as well as the rejection of assessee s claim u/s 54B is upheld . 5.2 On a careful perusal of the provisions of sec.54B, we notice that user of the land is actually relevant for the purposes of sec.54B, but not the nature of land, i.e. the primary condition is that the land should have been used for agricultural purposes in the two years immediately preceding the date of transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the value of the land was noted as ₹ 10 lakhs. Accordingly, the AO took the view that the exemption u/s. 54F is available only to the value of the farm house and accordingly restricted the deduction u/s. 54F to ₹ 1 lakh. The said view of the AO was also confirmed by the Ld. CIT(A). 6.1 The Ld. AR has cited many case law to drive the point that the farm house also constitutes a residential house. We find that there is no difference of opinion in this regard between the parties. The dispute is restricted to the quantum of amount that should be allowed u/s 54F of the Act. By placing reliance on the Circular No. 667 dated 18-10-1993 issued by the CBDT, the Ld. A.R submitted that the assessee is eligible for deduction of cost ..... X X X X Extracts X X X X X X X X Extracts X X X X
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