TMI Blog2017 (11) TMI 1129X X X X Extracts X X X X X X X X Extracts X X X X ..... op only on the land during the period starting from April to September. The assessee has shown from the records that the land was under cultivation during the immediately two preceding years and the assessee had grown soyabean and jowar crops on the land. The assessee has satisfied the conditions that the land is being used in two immediately preceding years for the purpose of agriculture before the date of sale. As decided in the case of Ramesh Narhari Jakhadi v. ITO (1992 (2) TMI 178 - ITAT PUNE ) that it is not necessary that the land should have used for agricultural purposes for full two years immediately preceding the date of transfer. Even if the land is used for some days in the year earlier to the preceding year it would be sufficient for compliance with the provisions of section 54B of the Act. Thus, even if the assessee has cultivated only kharif crop in the immediately preceding two years from the date of sale of land, the condition set out in section 54B for claiming benefit of exemption is complied with. Thus, in view of the facts and documents on record, we are of the considered view that the assessee has complied with all the conditions for claiming the exe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted the contentions of the assessee and upheld the additions made by the Assessing Officer. Now, the assessee is in second appeal before the Tribunal assailing the findings of the Commissioner of Income-tax (Appeals). 3. The grounds raised by the assessee in appeal are as under : 1. The learned Commissioner of Income-tax (Appeals), Aurangabad is not justified in confirming the disallowance of ₹ 72,88,087 being exemption claimed by the appellant under section 54B of the Income-tax Act, 1961. 2. The learned Commissioner of Income-tax (Appeals), Aurangabad has erred in violating the principles of natural justice and failed to consider the evidences of land being used for agricultural purposes in the preceding 2 years from the year of sale of agricultural land at village Nerli, District Nanded. The action of the Commissioner of Income-tax (Appeals), Aurangabad is wholly unreasonable, uncalled for and bad in law. 3. Such other orders be passed as may be deemed fit and proper. 4. The appellant craves leave to add, amend, alter vary and/or withdraw any or all the above grounds of appeal. 4. Shri Hari Krishna and Shri Bashiruddin Shaikh appearing on behal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apital gain of ₹ 72,88,087. The assessee invested the entire amount in the specified capital gain account with State Bank of India, Kinwat and claimed the benefit of exemption under section 54B of the Act. Before the Assessing Officer the assessee furnished a copy of the computer generated 7/12 extracts obtained from Maharashtra E-Seva Kendra, Village Kinwat, Taluka Kinwat, District Nanded to show that agricultural crops were grown during the financial year 2007-08 and again in the financial years 2010-11 and 2011-12. The learned authorised representative submitted that the Assessing Officer has erred in coming to the conclusion that there was no cultivation on the land in question for the past 2-3 years. Admittedly, during the financial years 2008-09 and 2009-10, the assessee could not cultivate the land for the reasons beyond his control. However, the assessee again started agricultural operation on the land in the financial years 2010-11 and 2011-12. 4.3 The Assessing Officer has placed heavy reliance on the report of the Inspector which was obtained after three years of the sale of the land by the assessee. If the purchaser of the land has not cultivated the land, it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essing Officer for rejecting the benefit of section 54B to the assessee are against the provisions of the Act. 4.5 Before the Commissioner of Income-tax (Appeals) the assessee had reiterated the submissions and has furnished some additional documents to show that the land of the assessee was under cultivation. However, the Commissioner of Income-tax (Appeals) rejected the contentions of the assessee after obtaining a remand report from the Assessing Officer. The learned authorised representative submitted that the assessee had furnished a copy of panchnama dated February 28, 2008 to show that agricultural land of twelve farmers including that of the assessee comprising in Gat No. 126 was acquired by the District administration. A copy of the panchnama is at pages 18 to 20 of the paper book. A perusal of the panchnama would show that 24 lemon trees were standing on the land of the assessee. A further perusal of panchnama would show that land owners were directed not to cultivate the land from January, 2008 till the time the land is in custody of Sub-Divisional Officer for the camp site. The learned authorised representative further referred to the public notice dated May 30, 2008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... activities were carried out by him during the financial years 2008-09, 2009-10, 2010-11, 2012-13, 2013-14, 2014-15 and 2015-16. The authorities below preferred to place reliance on the statement of Shri Shivaji Wamanrao Mirase rather than taking into consideration the land revenue records and other documents which are more authentic. The learned authorised representative submitted that the land comprising in Gat No. 125 is not owned by Shri Shivaji Wamanrao Mirase. The learned authorised representative in support of his submissions referred to 7/12 extracts at pages 72 and 73 of the paper book with respect to land in Gat No. 125. The learned authorised representative pointed that part of the land is owned by Sumanbi Wamanrao Mirase and Sushant Shivaji Mirase. Therefore, the statement and confirmation by Shri Shivaji Wamanrao Mirase cannot be relied upon to take any adverse view against the assessee. The findings of authorities below are against the documents on record and facts of the case and are purely based on surmises and conjectures. 4.8 In respect of the sale of agricultural produce to M/s. Shahid Trading Company the learned authorised representative submitted that just be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to 2012-13. The Department has been accepting the same without raising any question. Admittedly, the assessee is not maintaining bills for purchase of seeds, fertilizers, pesticides, etc. The Department cannot brush aside the entries made in the land revenue records with regard to agricultural crops grown from the financial years 2003-04 to 2007-08 and again from 2010-11 to 2011-12. 4.11 The learned authorised representative submitted that the Commissioner of Income-tax (Appeals) rejected the claim of the assessee under section 54B on the ground that the land was not used continuously for the period of two years before the sale for agricultural purposes, the period of two years immediately preceding the date of transfer does not mean that the land should be under cultivation for whole period of two years. Even if the land is used for cultivation for part of a year, it satisfies the condition laid down under section 54B for claiming exemption. In support of his contentions, the learned authorised representative placed reliance on the decision of the co-ordinate Bench of the Tribunal in the case of Ramesh Narhari Jakhadi v. ITO [1992] 41 ITD 368 (Pune). The learned authorised repr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in the form of paper book and referred during the course of making submissions, as well as the decisions on which the rival sides have placed reliance. The assessee's claim of exemption under section 54B has been denied primarily for the reason that the land in question was not used for agricultural purpose for two years immediately preceding the date on which the said agricultural land was sold by the assessee. In so far as the facts relating to purchase of land and sale of land are concerned they are not in dispute. The case of the assessee is that the assessee could not use the land in question for agricultural purpose in the financial years 2008-09 and 2009-10 as the land was temporary acquired by the District Administration in connection with the Tri-centenary celebrations of Guru-ta-Gaddi of Shri Guru Granth Saheb. This fact has been verified by the Assessing Officer during the remand proceedings. We find that during the assessment proceedings and thereafter, in first appellate proceedings the Revenue authorities have held that the assessee has not used the land for agricultural purposes for almost 6 years. To come to such a conclusion the authorities have placed reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The agricultural land has been used by the individual or his parents for agricultural purpose during two years immediately preceding the date of transfer. (iii) The assessee had purchased another agricultural land (rural or urban) within a period of two years after the date of transfer of the original agricultural land to be used for agricultural purpose. (iv) If the amount of capital gain is not utilized by the assessee for the purchase of another agricultural land before the date of furnishing return of income under section 139 of the Act, the same should have been deposited before furnishing such return in a notified capital scheme account with bank. In so far as conditions given in clause (i), (iii) and (iv) are concerned there is no dispute in the present case that the assessee has satisfied these conditions. The only dispute is whether the assessee has used the land for agricultural purpose during the period of 2 years immediately preceding the date of transfer. 9. To substantiate that the assessee has used the land for agricultural purpose the assessee has filed copy of 7/12 extracts as well as certain receipts from the retailers to whom the assessee has allegedl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of two years have to be reckoned from January, 2010 onwards. As has been pointed earlier that the land of the assessee is Jirayat land. The assessee could cultivate Kharif crop only on the land during the period starting from April to September. The assessee has shown from the records that the land was under cultivation during the immediately two preceding years and the assessee had grown soyabean and jowar crops on the land. The assessee has satisfied the conditions that the land is being used in two immediately preceding years for the purpose of agriculture before the date of sale. 11. The assessee has placed reliance on the decision of the co-ordinate Bench of the Tribunal in the case of Ramesh Narhari Jakhadi v. ITO (supra) to suggest that it is not necessary that the land should have used for agricultural purposes for full two years immediately preceding the date of transfer. Even if the land is used for some days in the year earlier to the preceding year it would be sufficient for compliance with the provisions of section 54B of the Act. The relevant extract of the findings of the Tribunal are reproduced hereinbelow : 9. Another aspect that is required to be c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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