9911796707
TMI Blog2025 (1) TMI 497X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal:- "1.1 The order passed u/s. 263 on 30.03.2022 by Pr. CIT-3, A'bad, holding the assessment order passed u/s 143(3) on 09.07.2019 by AO as erroneous and prejudicial to the interest of Revenue in respect of deduction allowed u/s 54B and the character of the land as agricultural land is wholly illegal, unlawful and against the principles of natural justice. 2.1 The ld. Pr. CIT-3 A'bad has grievously erred in law and or on facts in invoking the provisions of revision u/s 263 of the Act and holding that the order of original assessment passed u/s 143(3) on 09.07.2019 by AO was erroneous and prejudicial to the interest of Revenue in so far as the same related to deduction u/s 54B. The ld. Pr. CIT-3 A'bad has grievously erred in law an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 54B of the Act by way of deposit of Rs. 85 lakhs in the capital gains account and the assessee also claimed to have purchased new agricultural land jointly with two other persons on 09.11.2016 for a consideration of 1.98 crores, wherein the assessee's share in investment was Rs. 69,93,533/-. However, on going through the records, the PCIT observed certain anomalies in the assessee's claim of deduction under Section 54B of the Act, which according to PCIT were not examined by the Assessing Officer. Firstly, in order to claim deduction under Section 54B of the Act, the first condition is that the land which was sold was being used for agricultural purposes for two years immediately preceding the date on which the transfer took place. During ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for agricultural purposes. Therefore, PCIT observed that neither the land sold nor the newly purchased land had been used for agricultural purposes by the assessee for the period between 2014 to 2018. Therefore, the claim of deduction under Section 54B of the Act was not tenable. Thirdly, the PCIT observed that for claiming deduction under Section 54B of the Act, the assessee is required to "purchase another land for being used for agricultural purposes". However, PCIT observed that while making purchase of new land on which deduction under Section 54B was claimed, the assessee made payment of Rs. 8,33,333/- to the original agricultural land owner and made another payment of Rs. 57,66,666/- to the "confirming parties" for relinquishment of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scrutiny and therefore, the Assessing Officer had duly enquired into this aspect. The Counsel for the assessee drew our attention to relevant pages of the Paper Book giving details of various documents submitted by the assessee including 7/12 abstract. Further, the Counsel for the assessee submitted that Gujarat High Court has also held that mere conversion of agriculture land into non-agriculture land does not mean that the land was not used for agricultural purposes prior to it's conversion into non-agricultural land. The Counsel for the assessee submitted that the assessee has also grown Castor Seeds and Brinjal on this land prior to it's sale. 6. In response, the Ld. D.R. submitted that the land was not put to agricultural use prior t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this crucial aspect. Another aspect on which there was failure on part of the Assessing Officer to make due inquiries was that a sum of Rs. 57,66,666/- had been paid by the assessee towards obtaining relinquishment rights from third parties, and the Assessing Officer had not made due inquiries whether this amount was eligible for claim of deduction under Section 54B of the Act. We observe that PCIT had also obtained report from the concerned Government Authority / agency to substantiate that no agricultural activities were being carried out between the years 2014 to 2018 in respect of both the properties which was sold by the assessee and also the property which was subsequently purchased by the assessee with respect to which deduction und ..... X X X X Extracts X X X X X X X X Extracts X X X X
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