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TMI Blog2023 (12) TMI 878X X X X Extracts X X X X X X X X Extracts X X X X ..... o dismissed by the Co-ordinate Bench of this Tribunal vide exparte order dated 19.04.2023 in ITA No. 157/Rjt/2016 and exparte order dated 29.04.2022 in ITA No. 145/Rjt/2016. Thus Ld. CIT-DR placed on record the above orders passed by the Co-ordinate Benches of this Tribunal on identical issues and prayed the present appeal also be decided accordingly. 3. The brief facts of the case is that the assessee is an individual and derived income from business, and remuneration from the firms M/s. J.K. Hall and J.K. Developer. For the Assessment Year 2011-12, assessee filed his Return of Income declaring total income of Rs. 2,70,24,780/- on 28.09.2011 and then filed Revised Return declaring total income of Rs. 2,66,58,590/- on 08.02.2012. The return was taken up for scrutiny assessment and completed the assessment accepting the returned income filed by the assessee vide assessment order dated 31.10.2023 passed u/s. 143(3) of the Act. 4. On examination of the above assessment order and connected records, it was noticed by the Pr.CIT that during the year the assessee had transferred capital asset which is an agriculture land situated Survey No.71/2, Kangashiyali which resulted in capital ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n trade. 7. In para 4 of the submission the assessee has contended that "Finally the land was converted into non agricultural land vide N.A. Order dated 16.12.2010 passed by Collector, Rajkot District (Copy of order is attached at page 8 to 13). Thus the land was still agricultural land till 16.12.2010. Thus effectively the agricultural activity was carried out even for more than 2 years....." 8. Even if it is to be considered that agricultural activity was carried out till 16.12.2010, the period between transfer of capital asset Le 15.04.2010 and the date of the land being converted in to non agricultural land on 16.12.2010, cannot be included in the period of 2 years required u/s. 54B because as per the provisions of section 548 of the Act, the capital asset being land which, in the two years immediately preceding the date on which the transfer took place, was being used by (the assessee being an individual, or a HUF) for agricultural purposes which means that the stipulated 2 years of agricultural activity should be before the transfer of the capital asset. Therefore, the period during which agricultural activity was carried out after the assessee has transferred the land (1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... de by the assessee. 11. The assessee cannot adopt any date as date of transfer of the capital asset into stock-in-trade just because it suits to his claim for deduction u/s. 54B of the Act. In para 3 of the submission the assessee has considered 15.08.2010 as date of transfer. There is no basis for having adopted this date and as on this date the land was agricultural land and could not have been converted into stock-in-trade. Whereas, there is basis for treating the date of transfer as 16.12.2010 because on this date vide the Collector's order the land was converted into non- agricultural land and was since then eligible to be converted into stock- in-trade. 12. As per the facts discussed above, it is noticed that the assessee's claim of deduction u/s. 54B of the Act of Rs..39,37,435/- has been incorrectly allowed by the AO. The AO should therefore, verify the period for which the Capital asset in question was held by the assessee and also verify the investments made in land for claiming the deduction as discussed above. 13. In para nos. 6, 7, 8,9,10 and 11 of the submission the assessee has challenged the issuing of the notice u/s. 263 of the Act and has relied on v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h all the requisite details were furnished at the time of assessment proceedings and verified by the AO. 4. The Id. CIT erred on facts as also in law in holding that an agricultural land cannot be converted into stock in trade and the land converted into stock in trade could not have been agricultural." 6. Heard the Ld. D.R. and gone through the materials available on record including the orders passed by the Co-ordinate Bench of this Tribunal in ITA No. 145/Rjt/2016 and ITA No. 157/Rjt/2016. The operative portion of the decisions of the Co-ordinate Benches reads as follows: ITA No. 145/Rjt/2016 7. Heard the ld.DR and gone through the material available on record. We find that this is the twelveth hearing of the matter before the Tribunal. None appeared on behalf of the assessee. Though adjournment application has again been filed, but no paper book has been filed by the assessee giving material for considering the stand of the assessee. We find that there was no infirmity in the order of the ld.Pr.CIT for invocation of power under section 263 of the Act, vide which, the ld.Pr.CIT set aside assessment order passed under section 143(3) as being erroneous and prejudicial to th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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