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2015 (7) TMI 1111 - ITAT CHANDIGARH

2015 (7) TMI 1111 - ITAT CHANDIGARH - TMI - Reopening of assessment - statutory exemption under section 54B denied - Held that:- The assessee initially contended that he is merely agriculturist and the land in question falls outside the municipal limit, therefore no capital gain arises. Therefore, the story propounded by the assessee was not proved through any evidence or material on record. The Assessing Officer, while recording the reasons for re-opening of the assessment noted in the reasons .....

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As for exemption under section 54B AO merely presumed that since Sale Deed was entered into on 01.12.2009 with Asian Educational Society and Agreement to Purchase was prior to that date and the assessee did not get possession of the same, therefore claim of assessee not found justified. The assessee, however, explained the reasons why the possession could not be taken because the seller has not turned up for handing over possession to the assessee or for completion of the sale. The case law r .....

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e file of Assessing Officer with direction to re-decide the matter in issue by giving specific finding of fact in the assessment order - Decided partly in favour of assessee for statistical purposes. - ITA No. 330/CHD/2014 - Dated:- 7-7-2015 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER For the Appellant : Shri Deepak Aggarwal For the Respondent : Shri Manjit Singh O R D E R PER BHAVNESH SAINI,JM This appeal by assessee is directed against the order of ld. CIT(Appea .....

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uring 40 Kanal to the society during the year under consideration for ₹ 1,55,20,000/-. The assessee has not filed the return for assessment year 2010-11 under appeal before the due date i.e. 31.07.2010. Accordingly, notice under section 142 (1) of the Act was issued to the assessee on 25.08.2010 to file his return of income on or before 31.08.2010. The assessee vide reply dated 31.08.2010 submitted that he is not liable to income tax as he is having only agriculture income and that land so .....

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he assessee falls under section 44AB of the Act as he is also doing the business of earth filling and civil contractor. The Assessing Officer held that no documentary evidence in this regard has been filed and it was after thought, after issue of notice under section 148 of the Act. Further, the assessee in reply to the notice under section 142 (1) of the Act also stated that he was merely an agriculturist. However, explanation of the assessee was not accepted. The assessee computed the capital .....

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4B for making deposit in the bank and for investment in land was also disallowed. 5. The assessee challenged the order of the Assessing Officer before ld. CIT(Appeals) and challenged re-opening of the assessment under section 148 of the Income Tax Act on the ground that due date of filing of the return was 15.10.2010, therefore notice under section 148 of the Act issued before that date was not valid. The ld. CIT(Appeals) found that assessee has concocted the story of business activity on which .....

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gards exemption under section 54B of the Act, the assessee submitted that he had deposited a sum of ₹ 50 lacs with Punjab National Bank branch under CGAS before due date of 15.10.2010. In this connection, Assessing Officer noted that benefit of the scheme can only be availed if the amount is deposited under CGAS before filing of the Income Tax Return under Section 139 (1) i.e. 31.07.2010. Since the amount was deposited on 14.10.2010 therefore no benefit can be given to the assessee. 7. The .....

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e facts of the case found that sum of ₹ 50 lacs have been deposited after due date of filing of the return i.e. 31.07.2010 and in any case, after filing of the return on 05.10.2010. The advance of ₹ 50 lacs is also made without taking possession of the land, therefore, these grounds of appeal of the assessee were dismissed. 9. We have heard ld. Representatives of both the parties and perused the material available on record. As regards the re-opening of the assessment under section 1 .....

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pal limit, therefore no capital gain arises. Therefore, the story propounded by the assessee was not proved through any evidence or material on record. The Assessing Officer, while recording the reasons for re-opening of the assessment noted in the reasons that he has reason to believe that capital gains on sale of land has escaped assessment. The facts and circumstances clearly show that Assessing Officer was justified in recording reasons for re-opening of the assessment and issuing notice aga .....

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levant to reproduce Section 54B of the Income Tax Act as under : 54B. [(1)] [Subject to the provisions of sub-section (2), where the capital gain arises] from the transfer of a capital asset being land which, in the two years immediately preceding the date on which the transfer took place, was being used by [the assessee being an individual or his parent, or a Hindu undivided family] for agricultural purposes [(hereinafter referred to as the original asset)], and the assessee has, within a perio .....

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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 a .....

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shing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme which the Central Government may, by notification in the Official Gazette, 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 of the new asset together with the amount so depos .....

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ccordance with the scheme aforesaid. 11. The assessee claimed that he has deposited ₹ 50 lacs with Punjab National Bank under Capital Gain Accounts Scheme on 14.10.2010. Copy of the same is filed at page 73 of the Paper Book. The authorities below denied the claim of assessee on the reason that the amount with Punjab National Bank was not deposited in the scheme before filing of the Income Tax Return under section 139(1) i.e. 31.07.2010. However, it is a fact that the assessee filed return .....

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within such extended time." 12. From the facts of the case in the light of the above decision in the case of Ms. Jagriti Aggarwal (supra) it is clear that in the case of the assessee, the period under section 139 (4) would be expiring on 31.03,.2011. Since the assessee made deposit of ₹ 50 lacs under Capital Gain Accounts Scheme on 14.10.2010. Therefore, it was deposited within the period prescribed under section 139 (4) of the Act. Therefore, assessee would be entitled for exemption .....

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ing the land to Asian Educational Society. It is further explained that on 30.11.2009 (PB-89) agreement to Sell/purchase have been executed for the purchase of land measuring 57 Bigas 8 Biswa at village Kheri Gillan, Distt. Sangrur with S/Shri Ajmer Singh, Gurjant Singh and Harbans Singh. It was also explained before Assessing Officer that on 01.12.2009, the land measuring 24 kanal was sold at ₹ 1,04,40,000/- to Asian Educational Society by Registered Sale Deed dated 01.12.2009. It was fur .....

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be finalized on 15.05.2010 before Sub Registrar, Bhawanigarh. However, the seller not turned up for the aforesaid registration whereas the assessee marked his presence before the authority and the matter is now pending adjudication before Civil Judge, Sr. Division, Sangrur. 13(i) The ld. counsel for the assessee referred to copy of the notice (PB-78 & 79) addressed to the seller for specific performance. PB-81 to 87 are copy of the plaint for filing suit for specific performance against sel .....

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Supreme Court in this case of Shri Sanjeev Lal etc. Vs CIT 365 ITR 389 (S.C) in which it was held as under : "Where the assessee's entered into agreement to sell residential house on 27.12.2002 and received earnest money, and had also purchased other residential house within one year, however could execute sale deed only on 24.09.2004 on account of litigation and restrain order passed by Court, the assesses were entitled to relief u/s 54 in respect of long term capital gain which they .....

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the assessee in the construction of residential house on the site which was already owned by him within a period of one year prior to the date of transfer of the original asset or within a period of three years after that date are eligible for exemption under s. 54F." 15. The ld. DR, however, relied upon orders of the authorities below and submitted that the assessee made first sale in December, 2009, therefore, Agreement to Purchase dated 30.11.2009 is prior to the date of the sale and no .....

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