TMI Blog2023 (1) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... was lesser than FMV of property, is applicable prospectively. Thus, the reference made by the assessing officer under section 55A(a) is not competent and report received in such reference cannot be relied. Thus we direct the Assessing Officer to adopt the value of land as per registered valuer s report and computed the capital gain accordingly. In the result, grounds No. 1 to 4 of this appeal are allowed. Disallowance of deduction u/s 54B - no relevant information and documents were furnished to substantiate such claim - HELD THAT:- CIT(A) recorded contradictory finding on one hand, the ld. CIT(A) recorded that the claim of assessee is in order and on the other hand, confirmed the action of Assessing Officer by holding that the land sold by assessee was not agricultural land. We find that the order of ld. CIT(A) is self contradictory and not liable to be sustained. We find that on the similar issue, in CIT Vs Siddarth J Desai [ 1981 (9) TMI 48 - GUJARAT HIGH COURT] has determined 14 principals to ascertain the nature of land on the date of transfer and two determine whether the land was agricultural land or not, therefore, keeping in view the binding decision above we remi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) grossly erred by confirming an addition in respect of valuation without rebutting argument advanced during appellate proceeding. 4. On the facts and in the circumstances of the case and in law the Ld. CIT(A) grossly erred by not allowing the indexed cost of acquisition of Rs. 2,45,34,955/- (as per valuation report from registered valuer) and thereby disallowing appellant claim by Rs. 1,32,75,147/- (24534955-11259808). 5. On the facts and in the circumstances of the case and in law the learned CIT(A) grossly erred by not considering facts of the case holistically and confirmed the disallowance in respect of deduction U/s 54B of Income Tax Act to the tune of Rs. 8127603/-. 6. On the facts and in the circumstances of the case and in law the learned CIT(A) grossly erred by treating agriculture income of Rs. 312400/-. 7. The appellant craves leave to add, alter or withdraw any of the grounds of appeal. 2. Brief facts of the case are that the assessee is an individual and derived income from long term capital gain and agricultural income, filed his return of income for the A.Y. 2012-13 on 15/02/2014 declaring income of Rs. 70,72,270/-. The case was selecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4,01,45,040/- Less: Expenditure on transfer --- Indexed cost of acquisition --- Indexed cost of improvement --- Long term capital gain Rs. 4,01,45,040/- (ii) R.S. No. 177, Block No. 167, Village Valak, Tal: Kamrej Full value of the consideration: Rs. 45,04,560/- Less: Expenditure on transfer --- Indexed cost of acquisition --- Indexed cost of improvement --- Long term capital gain Rs. 45,04,560/- The total long term capital gain worked out to Rs. 4, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ereas the DVO estimated the rate of land at Rs. 128.50 per square meter vide his report dated 30/09/2015. The DVO asked the assessee to file his objection if any against the proposed estimation of rate, in response thereto, the assessee filed his objection on 20/10/2015. The assessee objected against value determined by the DVO on the ground that the DVO vailed to point out any defect in his valuation report. The value adopted by the DVO is totally baseless and does not pertain to the land situated nearby locality of land in question. The area and other factors like sale instances are not similar, thus there is no comparison between the impugned land and the instances. 6. The assessee also stated that the provisions of Section 55A(a) has been amended w.e.f. 01/07/2012, which provides that the Assessing Officer can refer the matter to the DVO if value claimed by assessee as per estimate made by registered valuer is at variance with its fair market value in the opinion of Assessing Officer. The amended provisions are applicable from 01/07/2012 and considering the nature and transaction of which the provisions applied it can be said that the same is applicable from financial year 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nchayat wherein the assessee was given certificate about growing Bananas. 10. On the submission of assessee, the ld. CIT(A) directed the Assessing Officer to furnish his remand report. The Assessing Officer furnished his remand report dated 26/03/2017. The contents of remand report is recorded by the ld. CIT(A) in para 7 of his order. The Assessing Officer in his remand report reported that the assessee sold two immovable properties on 02/03/2012 and claimed indexed cost and cost of improvement. The assessee has sold non-agricultural land. The assessee was issued show cause notice vide order sheet entry dated 16/01/2015 to furnish copy of sale deed of land and the purchase deed of the acquired land and the details of land used for agricultural purposes in two years immediately preceeding the date on which the transfer took place to justify the claim under Section 54B of the Act. The assessee failed to furnish relevant document, therefore, in absence of explanation, deduction was disallowed. On the issue of valuation of both the assets sold by assessee, the Assessing Officer reported that the assessment order was passed on 20/03/2015 subject to modification/rectification in the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided to the assessee. The assessee filed his rejoinder to the remand report of the DVO. The contents of rejoinder of assessee is recorded in para 7.2 of order of ld. CIT(A). 12. The ld. CIT(A) after considering the assessment order, submission of assessee and the remand report furnished by Assessing Officer on the issue of fair market value of assets as on 01/04/1981 held that the assessee adopted value of land as on 01/04/1981 @ Rs. 280 per square meter on the basis of Government approved valuer. However, the DVO suggested/valued cost of land as on 01/04/1981 @ Rs. 128.50 per square meter. The Assessing Officer on the basis of report of DVO has rectified the assessment order, thus the corresponding ground of appeal raised by the assessee was rejected. 13. On the issue of cost of improvement of Rs. 49.36 lacs, the ld. CIT(A) on the basis of report of DVO about the confirmation of charges paid to SUDA, allowed deduction of Rs. 20.00 lacs out of Rs. 30.00 lacs and on the submission of assessee that there is supporting evidence for remaining balance of Rs. 29.36 lacs, the ld. CIT(A) granted partial relief to the assessee. 14. On the claim of deduction under Section 54B of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons of the assessee for the purpose of adjudication of various grounds of appeal. Grounds No. 1 to 4 of the appeal relate to reference to DVO and not allowing indexed cost as per valuation of registered valuer. The assessee in his written submission submitted that two subject lands were converted into non-agricultural land vide order dated 11/11/2011 and were sold on 02/03/2012 and 15/03/2012 respectively. The land were converted into non-agricultural land immediately before sale took place i.e. 3 to 4 months prior to sale. The lands per se were agricultural land on record. During the assessment, very limited opportunity was given to the assessee. During the course of assessment, the Assessing Officer referred the matter to the DVO. The assessee further stated that reference to DVO cannot be made under Section 55A for A.Y. 2012-13, unless the Assessing Officer was of the view that the fair market value claimed by assessee on valuation report is on lower side and therefore, no addition on the basis of DVO report can be made to the tune of Rs. 1.32 crore. The assessee has sold land prior to 01/07/2012, therefore, the amended provision substituted in clause (a) of Section 55A wherein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty, is applicable prospectively. Thus, the reference made by the assessing officer under section 55A(a) is not competent and report received in such reference cannot be relied. 20. Considering the consistent decision of Tribunal which was passed by following the decision of Hon ble Jurisdictional High Court, we direct the Assessing Officer to adopt the value of land as per registered valuer s report and computed the capital gain accordingly. In the result, grounds No. 1 to 4 of this appeal are allowed. 21. Ground No. 5 of the appeal relates to disallowance of deduction under Section 54B of the Act. The assessee in his written submission, submitted that the assessee has sold two piece of agricultural lands after converting into non-agricultural. Before the lower authorities, the assessee vehemently submitted that for claiming such deduction, the addition is that the land was being used for agricultural purposes prior to two years of its sale. The assessee furnished the land record to substantiate such contention. The Assessing officer in his conclusion accepted that the certificate from cooperative societ4y is in consonance with the claim of assessee. Remand report of Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rat) has determined 14 principals to ascertain the nature of land on the date of transfer and two determine whether the land was agricultural land or not, therefore, keeping in view the binding decision of Hon ble Jurisdictional High Court, we remit the issue back to the file of Assessing Officer to consider the decision of Siddarth Desai (supra) and pass the order in accordance with law. The Assessing Officer is directed to provide fair and reasonable opportunity to the assessee before passing the order. The assessee is also directed to provide complete details of agricultural activities and evidence thereof, date of sale of land and the acquisition of new agricultural land. In the result, this ground of appeal is allowed for statistical purposes. 24. Ground No. 6 of the appeal relates to treatment of agricultural income as income from unexplained sources. The assessee in its submission submitted that during the remand proceedings, the Manager of Cooperative society admitted that the assessee sold agricultural produce during preceeding two assessment years. The ld. CIT(A) also accepted that the agricultural activities were carried out by the assessee. The assessee has furnished ..... X X X X Extracts X X X X X X X X Extracts X X X X
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