9911796707
TMI Blog2023 (12) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... the following grounds of appeal:- "1. For that the Ld. CIT(A) erred in confirming the order of the AO passed u/s 154 when in fact the entire sold lands were Rural Agriculture lands and thus the said lands do not come under the purview of the definition of Capital Asset as provided under section 2(14)(iii) and thus the entire calculation of capital gain on sale of rural agriculture land was illegal, wrong and without any sanction of law. 2. For that the Ld. CIT(A) erred in confirming the action of AO by invoking the provision of section 154 of the Income Tax Act since the mistake, which was sought to be rectified by the AO, was not a mistake apparent from the record as prescribed under section 154. 3. For that the CIT(A) erred in confi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome assessee had claimed exemption under section 54 of the Act at Rs. 69,80,000/-on account of purchase of agricultural land. However, the ld. Assessing Officer completed the assessment recalculating the longterm capital gain at Rs. 42,48,171/- as against Nil income declared by the assessee after claiming exemption under section 54 of the Act. Income assessed at Rs. 47,90,471/-. Thereafter, the ld. Assessing Officer on perusal of the assessment records observed that certain apparent mistakes have occurred and thus passed an order under section 154/143(3) of the Act and during the course of proceedings carried out u/s 154 of the Act, the assessee claimed that the lands sold during the year where agricultural land and they do not fall under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same to the notice of the Assessing Officer to which the Assessing Officer is satisfied, he may grant the assessee necessary relief and refund the tax paid in excess. Citing this decision, it is submitted that since the lands sold during the year are agricultural lands which were being used for the purpose of agricultural operation and they are not capital assets as defined u/s 2(14) of the Act, the capital gain arising from the sale of such land is exempt. Further it is claimed that even if agricultural land sold during the year are considered as capital asset then also assessee is eligible to claim exemption under section 54B of the Act, for the agricultural land purchased within the time limit prescribed under section 54B of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the assessee where agricultural land has been sold. The ld. Assessing Officer also observed that even Section 54F of the Act cannot be applied because the same pertains to capital gain on transfer of certain capital assets not to be charged in case of investment in residential house. During the course of proceedings u/s 154 of the Act, assessee gave detailed reply firstly contending that agricultural land in question is not a capital asset and, therefore, capital gain arising from sale thereof is exempt from tax. Second contention by the assessee was that even if the land sold during the year is not considered as a capital asset, then also assessee deserves to get the exemption u/s 54B of the Act towards purchase of agricultural land am ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the year do not fall within the definition of capital asset provided u/s 2(14)(iii) of the Act and, therefore, the capital gain arising from sale thereto is exempt from tax. So far as the finding of the lower authorities that the assessee did not provide this fact during the course of assessment proceedings, we note that during the course of rectification proceedings, though the same were initiated by the Assessing Officer but once certain facts were placed before the Assessing Officer during the course of such rectification proceedings, then he ought to have taken note of the same and should have dealt with the said contentions. It has been consistently held by the Hon'ble Courts that no tax can be levied or collected except by the authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... c in nature, still we would like to take note of the fact that the assessee also deserves to succeed on the alternative ground that even if the agricultural land is considered as capital asset, even then the assessee who has sold agricultural land and has purchased the agricultural land within a period of two years, after the date of sale for a total purchase consideration of Rs. 97,55,000/-, the assessee is entitled for exemption u/s 54B of the Act for the total sum of Rs. 97,55,000/- or the long term capita gain arising from sale of agricultural land whichever is lower. Thus, the grounds raised by the assessee are allowed. 9. In the result, appeal of the assessee is allowed. Order pronounced in the Court on 14th December, 2023 at Kolkat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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