9911796707
TMI Blog2020 (5) TMI 204X X X X Extracts X X X X X X X X Extracts X X X X ..... ing addition of Rs. 25,350/- being agriculture income on account of income from unexplained sources." 2. The brief facts of the case are that the return of income was filed by the assessee declaring income of Rs. 48,11,250/- and agriculture income of Rs. 25,350/-. The case was selected for limited scrutiny through CASS and after issuance of notice and reply of the assessee, the A.O. passed order U/s 143(3) of the Income Tax Act, 1961 (in short, the Act) on 16/12/2018 whereby making various additions/disallowances under various heads including disallowance U/s 54B of the Act. 3. Aggrieved by the order of the A.O., the assessee preferred appeal before the ld. CIT(A), who after considering the facts and circumstances available on record, dismissed the appeal filed by the assessee. 4. Aggrieved by the order of the ld. CIT(A), the assessee is in further appeal before the ITAT on the grounds mentioned above. 5. With regard to ground No. 1 of the appeal, the ld AR appearing on behalf of the assessee reiterated the same argument as were raised before the ld. CIT(A) and relied upon the written submissions filed before the ld. CIT(A) which is contained in para 5.2 of the order of the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o whether the sale consideration of Rs. 1,58,10,000/- received from sale of subjected capital asset was deposited in an account in any such bank or institution as may be specified in, and utilized in accordance with any scheme which the central government notified in official gazette. The assessee has not deposited the said amount for gap period in any capital gain scheme or bond notified by the government. Thus, the condition laid down in section 54B(2) of the Act were also not complied for. d) At this outset, we wish to draw your attention to the provisions of the section 54B of the Income Tax Act 1961 which are as under: Capital gain on transfer of land used for agricultural purposes not to be charged in certain cases. 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 period of two years after that date, p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid. From the perusal of the above provisions of law, it is clearly seen that the assessee has to satisfy all the below conditions set out in section 54B for claiming exemption which are as under. i. The agricultural land is transferred by any individual or HUF. ii. 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 u/s. 139 of the Act, the same should have been deposited before furnishing such return in a notified Capital Scheme account with bank. e) In so far as conditions given in clause (i), (iii) are concerned there is no dispute in the present case has been raised by the Ld. A.O in his assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t was deposited in an account in any such bank or institution as may be specified in, and utilized in accordance with any scheme which the central government notified in official gazette. The assessee has not deposited the said amount for gap period in any capital gain scheme or bond notified by the government. Thus, the condition laid down in section 54B(2) of the Act were also not complied for. To Substantiate the assessee claim, we wish to submit that, the Ld. A.O. has ignored the facts of the case which we resubmit as under : Particulars Date Date of Sale of Agricultural Land Situated at Village Velemala, Dist. Medak (Telangana 27.06.2015 Purchase of New Agricultural Land 10.05.2016 Due date of filing of return u/s 139(1) being Tax Audit was applicable for the year under consideration 17.10.2016 Actual Date of Return Filing 15.10.2016 From the above facts of the case, it is crystal clear that the assessee had purchased new agricultural land on 10.05.2016 i.e. before the due date of filing return under section 139 which is 17.10.2016 ( 5 months before the due date) and as per the provision of the section 54B(2) of the Income Tax Act if the amount of the capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hort, the Rules) in order to place on record the certificate of agricultural income issued by the Govt. Of Telangana, revenue department which is at page No. 13 of the paper book. In order to support his contentions, the assessee had submitted before the ld. CIT(A) that this certificate of agricultural income could not place on record before the A.O. as there were process of assembly elections was being undertaken in the State of Telangana and thus in that eventuality, the assessee could not get that certificate in time from the Revenue Department of Telangana. Consequently, the ld. CIT(A) sought remand report from the A.O. on this certificate placed on record by the assessee and the remand report filed by the A.O. is contained in para 7 of the ld. CIT(A)'s order, which is reproduced below. "The written submission filed by the appellant were forwarded to the AO. The AO has submitted the remand report as under:- "Kindly refer to your office letter No. 5020 dated 19.03.2019 on above mentioned subject. 2. During the appellant proceedings the AR of the assessee has made written submission before your office which was forwarded to this office for remand report/comments. The commen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... want prove that the subjected land was used for agricultural purpose and incurred loss out of such activities. In support of his claim, he has furnished copies of ledger account of agricultural account of agricultural income and expenses for FN. 2013-14 & 2014-15 and marked as Annexure-3. The assessee has submitted only the ledger account of Agriculture sale and Agriculture work made in cash and has failed to produce any corroborating evidence such as sale bills of crop, purchase bills and khad & beej, payment proof of salary/wages expenses, details of person to whom the salary was paid. Even the details of crop, its quantity details have not been mentioned/submitted. The evidence so produced are self serving and have no gravity in the eye of law. The said documents have been procured, arranged and prepared purposely to prove his claim u/s 54B of the Act correct. Thus, the submission of the assessee before your good office is liable to be rejected in light of above facts. Therefore, the grounds raised by the assessee company in ground No. 1 may kindly be dismissed and addition on this ground may kindly be sustained." 9. The ld AR has also drawn our attention to the reply/rejoin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate issued by the concerned Tahsildar of the subjected piece of land itself states the fact that as per government records there is an agricultural income derived from the subjected piece of land which substantiated the fact that the land was used for agricultural purposes. 2. Ld. A.O. has mentioned in point no (c) above that, "in the certificate, the assessee is shown to be resident of village - Velmala which is not correct, the assessee resided at Bhilwara". The certificate issued by the Tahsildar is as per the prescribed format under Rules and regulations of the concerned state and in general any government authority will mention the address as per his official records only. Hence it is to state that the assessee is residing in Bhilwara and land was not used for agricultural purposes is a perception only and not on facts. 3. Ld. A.O. has mentioned in point no (d) above that "at the Bottom of the certificate, there is a disclaimer that "this certificate is not valid for any civil, criminal case and any other purpose, except to obtain bank loan subject to rules and regulation of the bank". Therefore, the said certificate has been issued for the purpose of bank loan and has n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s so as to connect it with an agricultural purpose, the land could not be agricultural land for the purposes of earning an exemption under the Act. Entries in revenue records are, however, good prima facie evidence." Moreover, the Finance Act, 1970 also introduced Section 54B granting exemption in case the proceeds of sale of agricultural lands are reinvested in the purchase of other agricultural lands. The Finance Bill did not contain this section and, therefore, we do not have any Notes on Clauses in respect of this section. However, the CBDT has explained its meaning by Circular No. 45, dated 2-9-1970. It states: "The effect of the amendments to Section 2(14) and Section 47, as stated above, will be that capital gains arising from transfer of agricultural lands situated in the municipal and other urban areas on or after 1-3-1970, will become liable to taxation even where such land was held for bona fide agricultural purposes, often as the main source of livelihood. With a view to relieving the burden of taxation on the capital gains in such cases, a provision has been made, in a new Section 54B, for exempting from tax the capital gain arising from the transfer of agricultura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed 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 u/s. 139 of the Act, the same should have been deposited before furnishing such return in a notified Capital Scheme account with bank. 11. In so far as condition given in clause (1) & (iii) are concerned, there is no dispute in the present case because the assessee had already satisfied these conditions. The only dispute is relating to clause (ii) and (iv), as to whether the assessee has used the land for agricultural purposes during the period of 2 years immediately preceding the date of transfer and as to whether the assessee has utilized the amount of capital gain for the purchase of another agricultural income before the date of furnishing return of income U/s 139 of the Act and if not, then the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the case of CWT Vs Officer In Charge (1976) 105 ITR 133 (SC). 13. As per the facts of the present case, it was categorically submitted by the assessee that the assessee used the land for agricultural purpose/agricultural activities and copy of Agriculture income Certificate received from MRO office (Tahsildar office of the Government of the Telangana) is also submitted evidencing cultivation of crop in the subjected piece of agricultural land and the sale deed of land is referred as agricultural land and the lands are appearing as agricultural lands in Pattadar passbooks also. We have also considered the fact that the agriculture income certificate issued by the revenue department of the State of Telangana has been got issued in favour of the assessee by applying online and the format in which it is issued is as per the concerned state's prescribed rules and regulations. We have so considered the submission of the assessee to the effect that the assessee had cultivated the agriculture crops during the period of 2 years immediately preceding the date of transfer and incurred the loss after meeting of all the expenditure incurred during the agricultural activities and debit the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
