TMI Blog2019 (10) TMI 1528X X X X Extracts X X X X X X X X Extracts X X X X ..... tation of capital gains u/s. 45 of the Act as the asset is situated beyond 8 Kms from the municipal limit - HELD THAT:- Since adjudication of this ground leads to the very computation of capital gains and levy of taxes and since this is not before lower authorities, we feel it appropriate to restore this issue to the file of the Assessing Officer for denovo adjudication in accordance with law. If the land and shed sold by the assessee is proved to be an agricultural land and situated beyond 8 KM from the municipal limits the very computation provisions for capital gains fails and there shall not be any tax liability at all. In the circumstances, since this additional ground is going to the root of the computation of capital gains itself, we restore this issue to the file of the Assessing Officer for denovo adjudication in accordance with law. - ITA No. 2051/Mum/2018 And C.O. No. 104/Mum/2019 [Arising Out of ITA No. 2051/Mum/2018 - - - Dated:- 29-10-2019 - Shri C.N. Prasad, Hon'ble Judicial Member And Shri N.K. Pradhan, Hon'ble Accountant Member For the Assessee : Shri Vijay Shah. For the Department : Shri Harkamal Sohi Sandhu. ORDER PER C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax effect in this appeal is less than ₹.50 Lakhs and therefore the appeal of the Revenue is not maintainable on account of low tax effect in view of the CBDT Circular No. 17/2019 dated 08.08.2019. Hence Revenue s appeal is dismissed. 5. Coming to the cross objection filed by the assessee the following ground has been raised: - The Learned CIT has erred in law and fact in restricting the deduction under section 54 at ₹.1,05,23,271/- as against ₹.2,00,00,860/- in return of income as appellant has invested the same in residences. 6. Assessee also raised an additional ground in its cross objection as under: - The Learned CIT(A) 37 has ought to have treated the consideration received of Rs.3,08,80,000/- towards the sale of Agriculture Land and thus appellant is not liable for Capital Gain tax on sale of Agricultural Land. 7. At the outset, Ld. Counsel for the assessee submits that the land along with shed sold on 11.09.2012 by the assessee at Errangal Village, Taluka Borivali, Mumbai for a consideration of ₹.3,08,80,000/- is an agricultural land situated beyond 8 Kms from the municipal limits of Brihan Mumbai Mahanagar Palika limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8,80,000/- and claimed exemption u/s. 54 of the Act at ₹.2,50,09,860/-. Assessee was asked to furnish the details and evidences in support of computation of capital gains. Assessing Officer noticed that assessee acquired three residential properties, one in Mumbai, two in Pune and claimed exemption u/s. 54 in respect of investment made in all these three residential properties. Since the assessee claimed exemption for investment in more than one residential house assessee was asked to explain as to why exemption should not be disallowed. The assessee on 06.11.2015 filed a revised computation by claiming exemption only on one residential property i.e. Flat No. 607, Versova, Gayatri CHS Ltd., Andheri(W), Mumbai making his claim u/s. 54F of the Act. Assessing Officer required the assessee to explain as to how assessee is entitled to exemption u/s. 54F of the Act. Assessee vide letter dated 23.11.2015 filed his submissions stating that the claim for exemption was based on various case laws wherein the investment in more than one residential flats have been allowed. However, the Assessing Officer denied the claim of the assessee referring to the decision of the Special Bench of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. 12. Ld. DR vehemently supported the orders of the authorities below. 13. We have heard the rival submissions, perused the orders of the authorities below and the case laws relied on. In so far as the contention of the Ld. Counsel for the assessee that exemption u/s. 54/54F should be allowed on the investment made on multiple residential houses at different places, we find that this issue has been decided against the assessee by the Special Bench of the Tribunal, Mumbai in the case of ITO v. Ms. Sushila Jhaveri (supra). We also find that in the case of K.C. Kaushik v. P.B. Rane, Income Tax Officer [185 ITR 499] the Hon'ble Bombay High Court has taken a similar view. 14. We observe that the Ld.CIT(A) restricted the exemption u/s. 54 of the Act to investment made only in one residential house observing as under: - 5.6 The condition under section 54 laid down in the case of purchase of the residential house is that the house must have been purchased one year prior to the sale of the capital asset or two years subsequent thereto. In the case of a residential house, the condition laid down is that the residential house must have been constructed within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tional High Court (supra). Thus, we do not see any infirmity in allowing exemption u/s. 54 of the Act on the investment made only in one residential house. Thus, we sustain the order of the Ld.CIT(A) and reject the ground raised by the assessee. 16. Coming to the additional ground filed by the assessee i.e. the land along with residential shed sold by the assessee is an agricultural land and not a capital asset within the meaning of provisions of clause (a) of Section 2(14) of the Act and therefore outside the purview of the provisions of computation of capital gains u/s. 45 of the Act as the asset is situated beyond 8 Kms from the municipal limit, we find that adjudication of this aspect shall go to the root of the matter of computation of long term capital gains and very levy of taxes. Since adjudication of this ground leads to the very computation of capital gains and levy of taxes and since this is not before lower authorities, we feel it appropriate to restore this issue to the file of the Assessing Officer for denovo adjudication in accordance with law. If the land and shed sold by the assessee is proved to be an agricultural land and situated beyond 8 KM from the muni ..... X X X X Extracts X X X X X X X X Extracts X X X X
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