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TMI Blog2023 (7) TMI 789X X X X Extracts X X X X X X X X Extracts X X X X ..... be cancelled. 3. The Appellant claimed deduction amounting to Rs. 12,85,37,078/- as Capital expenditure before the Ld. Assessing Officer but the Ld. Income Tax Officer wrongly allowed deduction U/s 54B of the Income Tax Act,1961 which was not claimed by the Appellant. The Capital expenditure which was claimed by the Appellant according to the order of Additional Sessions Judge SAS Nagar Mohali vide dated 14.07.2015 was not allowed by the Ld. Assessing Officer, which may kindly now be allowed. 4. Any other ground which may be taken before the hearing of appeal with permission of Honourable Income Tax Appellate Tribunal. 3. A show cause notice dated 9.2.2022 was issued to be Assessee by the ld. CIT(E) u/s 263 of the Income Tax Act, 1961 (hereinafter called 'the Act'), wherein it was stated that the Assessee had received sale consideration of Rs. 12,89,16,667/- for sale of agricultural land and had claimed the amount of Rs. 12,46,53,524/- spent on purchase of agricultural land as exemption u/s 11(1A) of the Act and since the Assessee was not registered u/s 12A/12AA or section 10(23C), the provisions of sections 11 and 12 of the Act were not applicable. It was further stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y procedure which was followed by the Dera. The net sale consideration result in acquisition of new purchasing of land. Details of sale and purchase of land are given below:- Sale of agriculture land for 12,89,16,667 on dated 7.06.2016 to Janta land Promoters and purchased the agriculture land for 12,46,53,524 within six months of the sale of land. The copied of sale and purchase land have been deposited as per the court order. 4. CBDT Circular No. 52 date 30.12.1970 clarified-That the intent of the legislature was not in favour of imposing tax liabilities in cases where the capital gains as well as considerations is applied for acquisition of new capital asset. The Charitable organizations were afforded an advantage in getting an opting of claiming benefit of re-investment with regard to capital gain. 5. I further submitted that the Dera lands are exempted from provisions of Punjab land Reforms Act 1972, now Punjab Land reforms (Amendments) Act 2017. 6. CBDT Circular 14 dated 11.04.1955-Officers of the Department must not take advantage of ignorance of an assessee as to his rights. The Dera has never claimed the benefit u/s 54B of the Income Tax Act, 1961." 5. By virtue o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reated as income from property held under trust. However a deeming fiction has been introduced in Section 12(1) by which voluntary contributions are deemed to be income derived from the property held under trust. The answer would therefore be in the affirmative that voluntary contributions are indeed to be treated as income from property held under trust.......... ....... 3.2 Further, on the matters involving the claim of exemption u/s 54B of the Act, the Assessing Officer while passing the assessment order dated 09.12.2019 is seen to have given the benefit of the said deduction [u/s 54B of the Act] in the calculation of total taxable income without any claim from the assessee for such benefit [of deduction u/s 54B of the Act]. It is seen that this does not represent the correct application of the provisions of the Act. Even if the assessee had claimed the deduction u/s 54B of the Act, the assessing officer should not have allowed such claim since the provisions of Section 54B of the Act are applicable to the persons with the status "Individual" and "HUF' only. The assessee being a "Trust" during the year under consideration is not eligible to enjoy the benefit of deduction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is open to the assessee to bring and place forth before the Assessing Officer any material provisions of law or facts in its favour during the assessment proceedings. Hence, the assessment order passed by the Assessing Officer according the benefit of deduction u/s 54B of the Act to the assessee is erroneous well as the issue has remained unexplained on the part of the assessee during the course of above stated assessment proceedings for AY 2017-18. 3.4 It is therefore clear vide the above discussions that the e have been violations of the applicabilities-and in the applications-of Sections 10(21), 35(1), 11, 12(1) and 54B of the Act. The Assessing Officer's impugned assessment order is seen to be erroneous and prejudicial/detrimental to the cause of revenue on account of these violations which now need to be re-examined by the Assessing Officer. 4.1. The Hon'ble Apex Court in the case of Malabar Industrial Co. Ltd. V/s CIT in 243 ITR 83(SC) has held that a bare reading of section 263 of the Act makes it clear that the pre-requisite to exercise of jurisdiction by the CIT suo motu under it is that the order of the ITO is erroneous in so far as it is prejudicial to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er of the relevant provisions of law. It is also re-iterated that the exemptions claimed by the assessee, if and as any, by the assessee u/s 11 r.w.s 10(21) r w.s 35(1) of the Act do not appear tenable. 4.3 It is noted that the assessing officer failed to apply provisions of the Act with respect to the observations made above. Therefore, it is clear that these issues remained unexplained on the part of the assessee as well as on the part of the assessing officer. There is incorrect assumption of facts, as well as an incorrect application of law that too without application of mind which clearly satisfies the requirement of the order being erroneous. The order is prejudicial to Revenue, this is because in the light of these facts, the revenue has lost taxes lawfully payable by the person, hence the AO's order certainly falls in the mischief of being prejudicial to the interest of the revenue. 5. In the view of the facts stated above, it is concluded that the assessee has nothing to say in its defense and it is observed that the assessment framed u/s 143(3) of the Act on 09.12.2019 is erroneous in so far as prejudicial to the interest of the revenue in terms of provisions of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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