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TMI Blog2022 (12) TMI 1012X X X X Extracts X X X X X X X X Extracts X X X X ..... 2.2. On scrutiny of the assessment records by the Ld. PCIT, it is noticed that the assessee has shown Long Term Capital Gain of Rs. 80,21,324/- and Rs. 15,92,194/- on sale of land at Thaltej bearing Block No. 747/A and Block No. 748/A. On further verification of the sale deed, assessee's share being 15% in the above property is Rs. 1.05 crores. Subsequently appellant purchased another agricultural land situated at Survey No. 310 Taluka Mouje Thaltej vide purchase deed dated 04.04.2015 for an amount of Rs. 17,82,00,300/- and appellant's share being 15 per cent comes to Rs. 2,67,30,045/-. The assessee claimed of exemption u/s. 54B of Rs. 96,13,518/- from the above Long Term Capital Gain and reinvested in another agricultural land. However it is noticed that the said land sold was not used for agricultural purpose during the financial years 2013-14 & 2014-15 and the assessee has not shown any agricultural income from the above land. Thus the conditions envisaged for claiming exemption u/s. 54B of the Act are not fulfilled by the assessee, thereby the assessee is not eligible for exemption u/s. 54B of the Act. Thus the assessing officer failed to verify the details or any supportin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of improper irrigation facility and lack of water supply, the land does not produce much crop and whatever crop is cultivated from the said land is distributed amongst themselves. Therefore the assessee has not shown any income in its Income Tax Return. 2.5. The assessee further submitted Form 8A which clearly reflects that the land is an agricultural land. The assessee further submitted whatever the agricultural activity carried out prior to the same of the said land has to be considered as carrying on the agricultural operations in the said land and the assessee cannot be denied deduction u/s. 54B on mere technicalities. Thus the assessee relied upon various case laws and claimed that the exemptions u/s. 54B of the Act is correct and the assessment order is not an erroneous order or prejudicial to the interest of Revenue, therefore requested to drop the Revision proceedings. 3. On considering the above reply filed by the assessee, the Ld. PCIT held that it is seen from the assessment record that the A.O. had not asked any question with regard to the justification for claim of deduction u/s. 54B of the Act and also conditions required to be fulfilled to claim deduction under 54 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incur expenses on agricultural activities in a land which has been declared fallow land by the revenue authorities and which admittedly had improper irrigation facilities. The crop produced on this land also was claimed to have been distributed amongst the coowners and therefore, there was hardly any benefit arising to Shri Vaghela from the so called agreement. The assessee failed to furnish any supporting evidences and that the land was used for agricultural purposes in the two years preceding the date of transfer. Even the copy of agreement with Shri Vaghela was not provided. The assessing officer had failed to take note of any of these facts and without verifying this issue allowed the claim of the assessee. 7. Keeping in view of the aforesaid facts it is evident that the Assessing Officer had failed to verify claim deduction u/s.54B and carry out any investigation to examine whether the assessee was eligible for deduction u/s.54B. The order passed by the AO is therefore, erroneous and prejudicial to the interest of revenue. 8. In the instant case, the Assessing Officer has neither collected any facts nor conducted any enquiry pertaining to the eligibility of the claim of e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exercised revisional jurisdiction. CIT, Mumbai Vs. Amitabh Bachchan [2016]69 taxmann.com 170[SC] v) Where no inquiry was conducted by the Assessing Officer in passing assessment order after accepting revised return filed by the assessee. Commissioner was well within his powers under Section 263 to direct fresh assessment Virbhadra Singh (HUF) vs PCIT [2017] 86 Taxmann.com 113 (Himachal Pradesh) 10. After having considered the position of law and facts and circumstances of the instant case, I am of the considered opinion that the assessment order u/s. 143(3) of the Act dated 16.10.2017 passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of revenue in accordance with the Explanation 2(a) below section 263(1) of the Act as the order is passed without making inquiries or verification which should have been made and hence it has made the assessment order passed not only erroneous but also prejudicial to the interest of revenue. Accordingly, the impugned assessment order is set aside with a direction to the Assessing Officer to make requisite inquiries and proper verification with regard to the issues mentioned above and redo the assessment de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings for A.Y. 2015-16, the Ld. AO issued the Notice u/s. 143(2) dated 16.01.2017 and Notice u/s. 142(1) dated 16.01.2017 and 10.07.2017 and in response to the same, the appellant attended from time to time and furnished all details in respect of land at Shilaj bearing Block No. 747/A and Block No. 748/A vide submission dated 16.08.2017 and 10.10.2017. The appellant submitted all the relevant details in respect of sale of land at Shilaj bearing Block No. 747/A and Block No. 748/A with all the supporting documents and the explanations were given in respect of exemption claimed u/s. 54B by the AR of the appellant and the Ld. AO on being satisfied passed the assessment order u/s. 143(3) dated 16.10.2017 without making any addition or making any adverse comments on the same. 4. The appellant sold the co-ownership agricultural land at Shilaj bearing Block No. 747 Paiki and land bearing Block No. 748 Paiki during A.Y.2015- 16 vide Sale Deed dated 07.01.2015 for an amount of Rs. 7,00,00,000/-. In the sale deed of the said land it is referred that the said land is agriculture land and appellant's share on the said land being 15 per cent which comes to Rs.1,05,00,000/-. Subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nse to the notices issued Shri Ashok Patel, CA & AR of the assessee attended from time to time and furnished the relevant details. The assessee is one of the Directors of M/s Popular Estate Management Ltd, The case is discussed with the A.R. of the assessee and he was heard carefully. 3. Subject to the above verification, the total income of the assessee is assessed at returned income. Total Income as per return of income Rs. 21,21,340/- 4. Assessed under section 143(3} of the Income tax Act. Charge interest u/s 234A, 234B and 234C of the Act as applicable. Issue demand notice and challan refund, as the case may. 5.1. Thus the Assessing officer has not discussed any details either in the assessment order or in the notices issued to the assessee whether the assessee fulfills the conditions as prescribed u/s. 54B of the Act. The Assessing Officer had not applied his mind with regard to the said lands were been put to use for Agricultural purposes two years before such transfer, which is a condition precedent for claim of deduction u/s. 54B of the Act. Thus literally the Assessing Officer has not made neces ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The said decision, which we have already discussed supra, however, indicates that while construing an exemption notification, the Court has to distinguish the conditions which require strict compliance, the non−compliance of which would render the assessee ineligible to claim exemption and those which require substantial compliance to be entitled for exemption. We are pointing out this aspect to dispel any doubt about the legal position as explored in this decision. As already concluded in para 50 above, we may reiterate that we are only concerned in this case with a situation where there is ambiguity in an exemption notification or exemption clause, in which event the benefit of such ambiguity cannot be extended to the subject/assessee by applying the principle that an obscure and/or ambiguity or doubtful fiscal statute must receive a construction favouring the assessee. Both the situations are different and while considering an exemption notification, the distinction cannot be ignored. 52. To sum up, we answer the reference holding as under - (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show ..... X X X X Extracts X X X X X X X X Extracts X X X X
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