TMI Blog2018 (1) TMI 1514X X X X Extracts X X X X X X X X Extracts X X X X ..... ricultural produce was less than ₹ 5000/-, therefore, the same was not reflected in the return of income. A perusal of 7/12 extract shows that during financial year 2009- 10, out of total land admeasuring 7H 44R, only 40R was under cultivation and in financial year 2010-11, only 1H 80R was cultivated. The assessee had cultivated groundnut and brinjal on the land. The assessee is having 1/4th share in total undivided land. We find merit in the submission of assessee. The income from agricultural activities may not be substantial so as to be considered for the rate purpose under the provision of the Act. The Hon'ble Bombay High Court in the case of CIT Vs. Smt. Debbie Alemao [2010 ( 9 ) TMI 560 - Bombay High Court] has held that if an agricultural operation does not result in generation of surplus, it cannot be a ground to say that the land was not used for the agricultural purpose. Thus, in view of the above, we do not find any infirmity in the order of Commissioner of Income Tax (Appeal) and accordingly, the same is upheld and appeal of Revenue is dismissed being devoid of any merit. - ITA No. 1534/PUN/2015 - - - Dated:- 31-1-2018 - SHRI ANIL CHATU ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income Tax Act,1961, when the assessee had not submitted any detail of any agricultural expenditure or income from agricultural, either in the assessment proceedings or in appellate proceedings. Q.2. On the basis of facts and circumstances of the case, the Ld. CIT(A)-1, Nashik, erred in allowing the deduction to the assessee u/s. 54B of the Income Tax Act,1961, when no agricultural activity was carried out on the 3 lands, continuously for a period of 2 years, prior to the date of transfer of the assets. Q.3. On the basis of facts and circumstances of the case, the Ld. CIT(A)-1, Nashik, erred in allowing the deduction to the assessee u/s. 54B of the Income Tax Act, 1961, by proclaiming 3 pieces of lands as 1 piece of land, despite the identification by Competent Authority, i.e. Revenue Authority as 3 pieces of lands. Q.4. On the basis of facts and circumstances of the case, the Ld. CIT(A)-1, Nashik, erred in allowing the deduction to the assessee u/s. 54B of the Income Tax Act,1961, by admitting additional evidence and by overlooking the procedure as per Rule 46A of the Income Tax Rules, 1962. Q.5. On the basis of facts and circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame are at pages 26 to 31 of the paper book. A perusal of 7/12 extracts placed on record would show that small part of land comprising in Survey No. 178 was cultivated during the financial year 2009-10 and part of land comprising in Survey No. 177 and 188/1A was cultivated during the financial year 2010-11. It is an admitted case of assessee that land comprising in Survey No. 178 was never under cultivation in financial year 2010-11 and land comprising in Survey No. 177 188/1A was not used for agricultural purpose during financial year 2009-10. Thus, three parcels of land were never under cultivation immediately in preceding two years. Even when the said three parts of lands were used for agricultural purpose, only small chunk of the land was under cultivation. 5.2 The ld. DR contended that Commissioner of Income Tax(Appeal) has erred in granting relief to the assessee on the premise that three parcels of land are contiguous and part cultivation of such contiguous land is suffice to satisfy the conditions laid down u/s. 54B of the Act. The ld. DR asserted that contiguous land does not mean if one Survey No is cultivated; the condition set out in section 54B to use the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54B, the land should be used for agricultural purpose in the immediately two preceding years prior to the date of transfer. The law does not require that entire land should be used for cultivation purpose or the land should be used for agricultural purpose throughout the years. Even if part of the land is used for agricultural purpose by assessee for the part of the year, assessee is eligible for claiming deduction u/s. 54B of the Act. 6.1 The ld. AR further submitted that Hon'ble Supreme Court of India in the case of Sarifabibi Mohmed Ibrahim Vs Commissioner of Income-Tax reported as 204 ITR 631 has laid down certain tests to identify whether the land was used for agricultural purpose or not. If those tests are applied in the case of assessee, it would be evidently clear that land of assessee was, indeed, used for agricultural purposes. The ld. AR referring to 7/12 extract at page 26 to 31 of the paper book submitted that part of land comprising in Survey No. 178 was used for cultivating groundnut in financial year 2009-10. The assessee had cultivated groundnut on 40R land. In the land comprising in Survey No.188/1A, groundnut was cultivated on 40R and brinjal was gr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sale of land. 6.5. The ld. AR to further support his submissions placed reliance on the following decisions: 1) CIT Vs. Smt. Debbie Alemao reported as 196 Taxman 230 (Bombay) 2) ITO Vs. Shri Mahesh Ahire in ITA No.346/PUN/2013 decided on 14.07.2017 3) Haresh V. Milani Vs. JCIT reported as 114 ITD 428 (Pune) 4) CIT Vs. Minguel Chandra Pais reported as 149 Taxman 131 (Bombay) 5) Gopal C. Sharma Vs. CIT reported as 72 Taxman 353 (Bombay) 7. We have heard the submissions made by representatives of rival sides and have perused the orders of Authorities below. The solitary issue raised in the present appeal by the Department is assessee s eligibility for claiming deduction u/s. 54B of the Act. As per contention of the Revenue, assessee is not eligible for claiming benefit of deduction u/s. 54B, as statutory condition qua use of land for agricultural purpose in the two years preceding the date of sale is not satisfied. 8. Before proceeding to decide the issue raised in the present appeal, it would be necessary to first refer to the provision of section 54B of the Act. The relevant extract of the section is rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nishing return of income u/s.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. The assessee has satisfied these conditions. The only dispute is whether agricultural activities carried out by the assessee on the part of land, would be sufficient to comply with the conditions as mentioned at Serial No. (ii). 9. It is an admitted fact that land which is subject matter of dispute is comprising in three Survey Nos. i.e.177,178 and 188/1A. The land comprising in Survey No. 178 was used for agricultural purpose during financial year 2009-10 and the land comprising in 177 and 188/1A was cultivated during financial year 2010-11. The contention of the Revenue is that since the land comprising in Survey No. 178 was not cultivated in financial year 2010-11 and the land comprising in Survey No. 177 and 188/1A was not cultivated in financial year 2009-10, the mandatory condition set out in section 54B i.e. the land should be used for agricultural purpose in the two years immediately ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er cultivation was possible because of lack of water. The Tribunal held that the assessee cannot be denied relief because he was actually unable to put the land to use due to vagaries of nature and non-availability of resources. Thus, in view of the facts of the case and the decision discussed above, we do not find any infirmity in the order of Commissioner of Income Tax (Appeal) in allowing benefit of deduction u/s. 54B to the assessee. 12. The Revenue in appeal has raised the ground alleging violation of Rule 46A of the Income Tax Rules, 1962. The contention of the ld. DR is that assessee had filed additional evidence in the form of pictographic representation before the First Appellate Authority and the same was not referred to Assessing Officer for his comment. The ld. AR has stated at Bar that the pictographic representation of land mentioned by Commissioner of Income Tax (Appeal) in para 4.4 of his order refers to site map at page 121 of the paper book. The said site map is part of Sale Deed dated 15.03.2012 and the same was furnished before the Assessing Officer. The assessee had not furnished any new documentary evidence in the form of photographs or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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