TMI Blog2019 (10) TMI 342X X X X Extracts X X X X X X X X Extracts X X X X ..... ELD THAT:- Evidence produced by the assessee being Jamabandi, Girdawari report etc. is only in respect of the land purchased by the assessee and not in respect of the land sold by the assessee. Therefore, the finding of the ld. CIT (A) is based on presumption of wrong facts and rather based on the facts which are contrary to the material on record. Accordingly, we set aside the order of the ld. CIT (A) qua this issue and restore the order of the AO denying the claim of deduction under section 54B Disallowance of cost of development of land - claim allowed by the ld. CIT (A) - HELD THAT:- Facts recorded by the ld. CIT (A) that the payment was made towards construction of the area admeasuring 450 ft. @ ₹ 400/- per ft has been reflected in the evidence produced by the assessee. The AO has not pointed out any defect in the evidence produced by the assessee in support of the claim. Accordingly, in the absence of any contrary fact or material, we do not find any error or illegality in the impugned order of the ld. CIT (A) qua this issue. Disallowance of transfer expenses - claim allowed by the ld. CIT (A) - HELD THAT:- In view of the fact that the assessee produced the ev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evidence regarding alleged expenditure of ₹ 1,02,92,495/- to claim u/s 54F? 2. On the facts and in the circumstances of the case, whether the ld. CIT (A) was justified in giving relief to the assessee by accepting additional evidence contrary to Rule 46A and without appreciating the fact that the assessee was represented by an Authorized Representative during the course of assessment proceedings and in spite of repeated opportunities as per the order sheet the documents furnished before CIT (A) were not furnished before the AO nor was time sought to furnish these documents on account of alleged illness of the assessee or his son. 3. On the facts and in the circumstances of the case, whether the ld. CIT (A) was justified in accepting the claim of the assessee without examining the legality of the claim of allowing deduction u/s 54F of the Act of ₹ 1,02,92,495/- to the assessee even though the Valuation Report submitted by the assessee clearly states that the property is under joint ownership and the share is not divided, and so the decision of CIT (A) is contrary to the finding of the Hon ble Jurisdictional High Court order in the case of Kalyan vs. CIT Other (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under section 54F of the IT Act which was allowed by the ld. CIT (A) after considering the additional evidence filed by the assessee. 2. The assessee is an Individual and filed his return of income for the year under consideration on 26.03.2013 declaring total income at ₹ 2,41,740/- including long term capital gain of ₹ 1,51,821/-. Subsequently, the AO initiated the proceedings under section 147/148 of the I.T. Act on the basis of information received from the Investigation Wing regarding the deduction claimed by the assessee under section 54F and 54B of the IT Act as well as unexplained cash deposit in the bank, by issuing a notice under section 148 on 28th March, 2014. During the year under consideration, the assessee sold land situated at village Sukhiya, Patwar Halka Kalyanpura, Tehsil Sanganer, Jaipur bearing Khasra No. 142 admeasuring 1.21 hectares to M/s. Triveni Propcon Pvt. Ltd. for a consideration of ₹ 2,43,11,000/- vide Sale Deed dated 4th May, 2011. The AO while passing the reassessment order disallowed the claim of deduction under section 54F as well as 54B of the IT Act on the ground that despite the show cause notice issued to the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t from the record that the assessee has not produced any supporting evidence for claim of deduction under section 54F as well as under section 54B of the Act. Therefore, the AO disallowed the claim of the assessee while passing the reassessment order. On appeal before the ld. CIT (Appeals), the assessee has produced the additional evidence along with the application under Rule 46A of the IT Rules. The details of the additional evidence have been produced by the ld. CIT (A) at pages 5 to 7 of the impugned order are as under :- S.No. Particulars Page No. Additional Evidences 1. Payment voucher of Construction expenses amounting to ₹ 1,80,000/- incurred in F.Y. 2003-04 on the land sold. 1-2 2. Payment voucher Brokerage paid on sale of land ₹ 1,66,667/- to Shri Babu Singh along with his identity proof. 3-4 3. Payment voucher Brokerage paid on sale of land ₹ 1,66,667/- to Shri Raju Choudhary along with his identity proof. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agriculture activities on the land sold. 188- 189 The ld. CIT (A) vide letter dated 24th March, 2017 asked the AO to submit the remand report on the admission of additional evidence as well as after verification of additional evidence submitted by the assessee. We find that the AO in the remand proceedings have examined the evidence filed by the assessee in support of the claim under section 54F. The relevant part of the remand report are as under :- Claims of deduction u/s 54F : The objection of the appellant are the following grounds :- The land sold was agriculture land only and the facts is evident from the confirmations which represents the value of the property as per the Valuation Report. Comments : During the course of assessment proceedings, neither assessee/AR of the assessee attended not filed any written submission, therefore, the liability of capital gain could not be verified that time. The assessee has filed new evidence u/s 46A of the Act before the L/d CIT (A)-5, Jaipur which is referred to Assessing Officer for verify. Assessee has invested into construction of a residential house pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A). 6. The ld. D/R has submitted that the AO has objected to the claim of deduction under section 54B in the remand report and the assessee has also failed to establish that the conditions as prescribed under section 54B have been satisfied. Thus the ld. D/R has contended that the contentions regarding the existing land sold by the assessee was being used for agricultural purpose for two years immediately preceding to the date of sale and also the new agricultural land purchased by the assessee has been used for carrying out the agricultural operations, the ld. CIT (A) s finding is contrary to the facts and record while accepting the claim of the assessee. Thus the ld. D/R has submitted that once the primary condition as prescribed under section 54B are not satisfied, then the claim of deduction under section 54B is not allowable to the assessee. The AO in the remand report has relied upon three decisions on this issue including the decision of Hon ble Punjab Haryana High Court in case of Jai Narayan vs. ITO, 306 ITR 335 (P H) as well as the decision of Hon ble Jurisdictional High Court in case of Kalya vs. CIT Others, 251 CTR 174 (Raj.). 7. On the other hand, the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral land in the name of wife. We further note that the Hon ble Punjab Harayan High Court in a subsequent decision in case of CIT vs. Dinesh Verma, 233 Taxman 409 (P H) has reiterated its earlier view and held that the deduction under section 54B is not available when the land is purchased in the name of son and grandson of the assessee. Without going into the controversy of the entitlement of deduction under section 54B when the land purchased by the assessee in the name of his son and daughter-in-law, we have to first examine the precedent condition for allowing the deduction under section 54B being the existing land sold by the assessee was being used by the assessee for agricultural purposes in two years immediately preceding the date on which the transfer took place. We find that the assessee before transferring the land in question in favour of the real estate company got converted the agricultural land to non-agricultural use on 23.08.2010. This fact has been recorded in the Sale Deed dated 4th May, 2011 whereby the assessee sold the existing land as under :- This fact as recorded in the Sale Deed is not in dispute and therefore, it is apparent that the land sold by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee on the ground that the assessee has not furnished any documentary evidence in support of the claim. The ld. CIT (A) has allowed the claim of the assessee only on the basis of some vouchers produced by the assessee which were not produced or examined during the remand proceedings. Thus in the absence of verification of the documents produced by the assessee the claim cannot be allowed. She has relied upon the order of the AO. 10. On the other hand, the ld. A/R of the assessee has submitted that the assessee produced the vouchers regarding the expenditure incurred on construction of boundary wall wherein the payment of ₹ 1,80,000/- has been proved. The assessee claimed the indexed cost of said expenditure at ₹ 3,05,184/-. He has further contended that the assessee has filed the full details of the payment through vouchers/receipts towards construction of the boundary wall admeasuring 450 ft. @ ₹ 400/- per ft. He has supported the order of the ld. CIT (A). 11. We have considered the rival submissions as well as the relevant material on record. We find that the vouchers regarding the claim of cost of construction of boundary wall were produced by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus the facts recorded by the ld. CIT (A) that the payment was made towards construction of the area admeasuring 450 ft. @ ₹ 400/- per ft has been reflected in the evidence produced by the assessee. The AO has not pointed out any defect in the evidence produced by the assessee in support of the claim. Accordingly, in the absence of any contrary fact or material, we do not find any error or illegality in the impugned order of the ld. CIT (A) qua this issue. Ground No. 6 is regarding disallowance of transfer expenses by the AO which was allowed by the ld. CIT (A). 12. We have heard the ld. D/R as well as the ld. A/R and considered the relevant material on record. The AO disallowed the claim for want of supporting evidence. However, the assessee claimed that he has paid brokerage to the parties regarding the sale of the land. The assessee also produced the payment vouchers of brokerage which were sent to the AO but the AO has not made any comment on the evidence in the remand report. The ld. CIT (A) has decided the issue in para 7 as under :- 7. Vide ground no. d, the appellant contended that the AO was not justified in disallowing expenditure incurred on transfer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 13. In the Cross Objection, the assessee has raised the solitary ground as under :- In the facts and circumstances of the case and in law, ld. CIT (A) has erred in confirming the action of ld. AO in reopening the case of the assessee under section 147 of the Income Tax Act, 1961. The action of the ld. CIT (A) is illegal, unjustified and arbitrary and against the facts of the case. Relief may please be granted by quashing such re-assessment proceedings. 14. The ld. A/R of the assessee has submitted that the AO has reopened the assessment with a view to examine the claim of deduction under section 54F and 54B of the IT Act. Therefore, the provisions of section 147/148 cannot be resorted to conduct an enquiry and to ascertain the correctness of the return of income. He has further contended that the amendment in section 133C(2) and Explanation 2 (ca) to section 147 were introduced by the Finance Act, 2016 with effect from 01.06.2016 are not applicable for the assessment year under consideration. The ld. CIT (A) has rejected the plea of the assessee by placing reliance on various decisions which are distinguishable on the facts of the case. Thus the ld. A/R has submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts, the income escaped assessment in respect of the assessee amounts to ₹ 2,51,79,179/- (₹ 2,41,59,179 + ₹ 10,20,000). Thus, it is a fit case for issuing notice u/s 148. Place : Jaipur Dated : 10/03/2014. (Alok Jain) Income-tax Officer, Ward 7(2), Jaipur. The AO has given the particulars of the capital gain declared by the assessee in the return of income at ₹ 1,51,821/- as well as claim of deduction of ₹ 2,41,59,179/- which includes the claim of deduction under section 54F/54B of ₹ 2,31,32,495/-. The AO has clearly recorded in the reasons that during the enquiry proceedings the assessee has not furnished any documentary evidence in support of the claim. Therefore, the claim of deduction of ₹ 2,41,59179/- was found to be not substantiated by any evidence. This result of enquiry itself constitutes a tangible material to form the belief that the income assessable to tax in the form of excess claim of deduction has escaped assessment. We further note that even during the reassessment proceedings the assessee has not produced any documentary evidence in support of the claim and only in the appellate proceedings before ..... X X X X Extracts X X X X X X X X Extracts X X X X
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