Income Tax Appellate Tribunal - Pune
Rajiv Shivajirao Ghule, Pune vs Assessee on 2 April, 2014
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
Before Shri Shailendra Kumar Yadav, Judicial Member
and Shri R.K. Panda, Accountant Member
ITA No. 1153/PN/2010
(Assessment Year : 2007-08)
Shri Rajiv Shivajirao Ghule,
Krishna Deep, At Post : Manjari,
Tal :Haveli, Pune-412307
PAN No. ABFPG7104F .. Appellant
Vs.
ACIT, Circle-3, Pune .. Respondent
ITA No. 1219/PN/2010
(Assessment Year : 2007-08)
Dy. Commissioner of Income Tax,
Circle-3, Pune .. Appellant
Vs.
Shri Rajiv Shivajirao Ghule,
1206-41A, 3rd Floor, Vyas Vertex,
J.M. Road, Shivajinagar, Pune-411005
PAN No. ABFPG7104F .. Respondent
Assessee by : Shri Sunil Pathak
Revenue by : Shri P.L. Pathade
Date of Hearing : 02-04-2014
Date of Pronouncement : 10-04-2014
ORDER
Per R.K. Panda, AM :
These are cross appeals. The first one is filed by the assessee and the second one filed by the Revenue and are directed against the order dated 17-06-2010 of the CIT(A)-II, Pune relating to Assessment Year 2007-08.
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2. Ground of Appeal No. 1 by the assessee and grounds of Appeal No. 1 to 5 by the Revenue relate to the order of the Ld. CIT(A) in directing the Assessing Officer to adopt the fair market value of the land at Rs.6/- per sq. ft. as on 01-04-1981 as against Rs.13.50 per sq. ft. claimed by the assessee and Rs.1/- determined by the Assessing Officer.
2.1 Facts of the case, in brief, are that the assessee is an individual and is engaged in the business of real estate and trading in petroleum products. He filed his return of income on 25-10-2007 declaring total income of Rs.54,88,815/-. From the details filed by the assessee the Assessing Officer noted that the assessee has sold Agricultural land situated at S.No. 127 on 06-04-2006 for a consideration of Rs.3,23,70,000/-. For the purpose of cost of acquisition, the assessee has taken the value of land on 01-04-1981 at Rs.22,62,000/- on the basis of a valuation report. From the details furnished by the assessee, the Assessing Officer observed that the valuer has adopted "Comparing Sale Instance Method" to arrive at the said value. However, the Assessing Officer was not satisfied with such valuation. After obtaining details from the Town Planning & Valuation Department the Assessing Officer concluded that the valuation for 1981 has to be taken at 40% of the value of 1989 since the said authority has been issuing "Ready Reckoner" since 1989 for the purpose of Stamp Duty Valuation. From the records given by the Town Planning Authority the Assessing Officer noted that in Manjari Bhudruk, Taluka Haveli, Pune, the rate of agricultural land in 1989 is Rs.2,00,000/- per hectare. So as on 01-04-1989, the rate of 3 agricultural land is 40% of Rs.80,000/- per hectare. The Assessing Officer, accordingly, determined the value of the property as on 01- 04-1981 at Rs.1,28,800/- being the value of 1.61 hectares. 2.2 In appeal the Ld. CIT(A) based on the arguments advanced by the assessee directed the Assessing Officer to determine the value at Rs.6/- per sq. ft. as against Rs.13.50 per sq.ft. adopted by the assessee and about Rs.1/- per sq.ft. determined by the Assessing Officer. 2.3 Aggrieved with such part relief given by the CIT(A) the assessee as well as the Revenue are in appeal before us.
3. The Ld. Counsel for the assessee filed certain additional evidences. Referring to the same he submitted that in the case of brother of the assessee i.e. Shri Sunil Ashok Ghule, the Department has accepted the value of the land as on 01-04-1981 at Rs.13.50/- per sq. ft. on the basis of the same valuer. However, since the assessee had strained relationship with his brother the assessment order in his case could not be obtained before the completion of appeal before the CIT(A). Since this additional evidence supports the case of the assessee, therefore, the same should be accepted. Referring to the valuation report in the case of Shri Satish Dattatraya Magar he submitted that the value of land as on 01-04-1981 has been determined at Rs.18.46/- per sq. ft. for the land situated near Magarpatta. He submitted that since the land of the assessee is situated just 2 Kms. away from Magarpatta, therefore, the rate of 13.50 per sq. ft. is reasonable and the same should have been accepted. He further submitted that since these are all additional evidences, therefore, the same should be accepted and the matter may 4 be restored to the file of the CIT(A) with the direction to re-adjudicate the issue.
3.1 The Ld. DR while supporting the order of the Assessing Officer submitted that he has no objection if the matter is restored to the file of the CIT(A) for fresh adjudication.
4. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and Paper Book filed on behalf of the assessee. The additional evidences filed by the assessee in the shape of copy of the assessment order in the case of his brother showing the valuation of the land as on 01-04-1981 at Rs.13.50/- per sq. ft. which has been accepted by the Department and the copy of the valuation report in the case of Shri Satish Dattatraya Magar determining the value of land at Rs.18.46/- per sq. ft. as on 01-04-1981 near Magarpatta are accepted. Since these evidences go to the root of the matter and were not available before the CIT(A), therefore, we, in the interest of justice, deem it proper to restore the issue to the file of the Ld. CIT(A) for deciding the issue afresh. Needless to say, the Ld.CIT(A) shall give due opportunity of being heard to the assessee and decide the issue as per law. We hold and direct accordingly. Ground of appeal no. 1 by the assessee and grounds of appeal nos. 1 to 5 by the Revenue are accordingly allowed for the statistical purposes.
5. Ground of appeal Nos. 2 and 2.1 by the assessee reads as under:
"2. The learned CIT(A) erred in rejecting the claim of the assessee of reduction in the total sale consideration on the ground that the said claim was not made by the assessee in the return of income and hence, the said issue could not be entertained in the appellate proceedings.5
2.1. The assessee submits that the capital gains should have been computed by adopting the total consideration at Rs.2,91,12,500/- as against Rs.3,23,70,000/- as taxed by the learned A.O. in the asst. order".
5.1 Facts of the case, in brief, are that the assessee while computing its capital gain has shown the sale of land at Rs.3,23,70,000/-. However, before the CIT(A) the assessee submitted that the consideration on sale of land at S. No. 127/1, Manjari Budruk, Pune has not been shown correctly as the assessee has transferred the development rights only in respect of 1 hectare and 40.30 R and the deal relating to the remaining land being 15.70 R was cancelled. It was accordingly requested that the capital gains should be taxed only on that portion of the land which is Rs.2,91,12,500/- after excluding the cancelled portion.
5.2 However, the CIT(A) did not accept the above contention of the assessee. He observed that the assessee himself has shown to have received consideration for transfer of land at Rs.3,23,70,000/- in the return of income. Now the assessee wants to revise the same to Rs.2,91,12,500/- on the basis of cancellation deed dated 15-12-2009, the original development agreement being dated 07-04-2006. This claim was neither made in the return of income nor made during the assessment proceedings before the Assessing Officer which continued till the date after execution of this so called cancellation deed. Relying on the decision of the Hon'ble Supreme Court in the case of Goetz India Ltd. reported in 284 ITR 323 he rejected the claim of the assessee which has been made for the first time during the appellate proceedings. Accordingly, he also rejected the request for admission 6 of certain additional evidences on this issue on the ground that the same cannot be entertained since the facts relating to this claim were not available before the Assessing Officer during the assessment proceedings and the assessee does not fulfil the conditions prescribed in Rule 46A(1) for admission of the same. He accordingly dismissed the grounds raised before him for which the assessee is in appeal before us.
6. The Ld. Counsel for the assessee referring to the decision of Hon'ble Bombay High Court (Aurangabad Bench) in the case of Anant Chunilal Kate reported in 267 ITR 482 submitted that under similar circumstances where the assessee had returned the sale proceeds of 17 plots to owner of the land on the basis of a compromise decree dated 19-01-1989 the Hon'ble High Court held that the said amount cannot be added in the disclosed income which was initially shown by the assessee in the return of income for the A.Y. 1981-82. Referring to the decision of the Mumbai Bench of the Tribunal in the case of Sushila Shantilal Jhaveri Vs. Union of India and Another reported in 286 ITR 428 he submitted that the Hon'ble High Court in the said decision has held that subsequent events or developments occurred pendent lite can be considered if they have the effect of overshadowing the original case found by the Court below. He submitted that since the assessee in the instant case has to cancel the transaction of a portion of the land due to default on the part of the purchaser and did not sale the said portion of the land and retained the same for himself, therefore, in view of the above two decisions, the assessee is not liable to full capital gain tax.
76.1 Referring to the decision of the Mumbai Bench of the Tribunal in the case of Kalptaru Construction Overseas (P) Ltd. Vs. DCIT reported in 13 SOT 194, he submitted that the Tribunal in the said decision has held that subsequent event contingent upon which the sale consideration of capital asset was variable and which in fact varied the sale consideration has to be considered for computing capital gains. For this purpose he drew the attention of the Bench to the following head note :
"Capital gains-Computation-Consideration of subsequent events- assessee agreeing to sell its subsidiary by selling its entire equity shares therein to one T by agreement dated. 10th July, 1998, on the condition that the liabilities pertaining to the period prior to 30th June, 1998, and the current assets as appearing in the books of accounts were all realisable at the amounts stated therein at assessee's risk subject to the ceiling of Rs.1.25 crores Assessee, therefore, showed the consideration of Rs.1.25 crores in the return-Amount of consideration finally settled at Rs.1 crore due to various unrealised/unrealisable current assets and then provided liabilities-Such a subsequent event would relate back to the assessment year under consideration-Matter remanded for fresh consideration."
6.2 Referring to the decision of Pune Bench of the Tribunal in the case of B.G. Shirke Construction Technology Private Limited Vs. ACIT vide ITA Nos. 727 to 730/PN/2012 order dated 31-10-2013 for the A.Ys. 2003-04, 2006-07 to 2008-09, he drew the attention of the Bench to the following observation of the Tribunal :
"21. In any case, the judgment of the Hon'ble Supreme Court in the case of Goetz (India) Ltd. (supra) does not impinge on the powers of appellate authorities to entertain a fresh claim which was hitherto not preferred by the assessee in the return of income, as explained by the Hon'ble Delhi High Court in the case of Jai Parabolic Springs Ltd. (supra). Accordingly, there was no impediment for the CIT(A) to have entertained the impugned claim especially when the required facts to adjudicate the controversy were already on record."
He accordingly submitted that this matter may be restored to the file of the CIT(A) with the direction to adjudicate the ground afresh. 8
7. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A).
8. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. The only dispute in the instant case is the computation of capital gain on the basis of the sale consideration shown at Rs.3,23,70,000/- in the return of income filed by the assessee himself or to substitute the same at Rs.2,91,12,500/- in view of the cancellation deed dated 15-12-2009. Undisputedly, this claim was not made before the Assessing Officer either by filing of a revised return or through any other submission. We find the Ld. CIT(A) did not entertain the claim made before him and rejected the additional evidence filed before him on the ground that the assessee has made this claim for the first time during appellate proceedings and therefore in view of the decision of Hon'ble Supreme Court in the case of Goetz India Ltd. (supra) the claim of the assessee cannot be entertained.
8.1 We find the Hon'ble Bombay High Court in the case of Sushila Shantilal Jhaveri (supra) has held as under:
"Having heard Mr. Jhaveri, learned counsel for the petitioner; having seen the impact of the subsequent events on the operating part of the impugned order, the submission made by Mr. Jhaveri needs acceptance. The apex court in the case of Gaya Prasad, AIR 2001 SC 803 ruled that subsequent events or developments occurred pendente lite can be considered; if it has the effect of overshadowing the original case found by the court below. In the case of Hasmat Rai Vs. Raghunath Prasad, AIR 1981 SC 1711 the apex court held that the magnitude of subsequent events or the dimension thereof should be such that it should have the effect of completely changing the colour of the original findings. In our considered view, the subsequent events brought on record have completely changed the colour of the original findings extracted in para. 2 supra. In the peculiar facts and 9 circumstances of this case, we feel that it would be necessary to direct the Commissioner of Income-tax to reconsider the application filed and the submissions made by the petitioner on its own merits in the light of the subsequent events since they have dislodged the validity of the adverse findings suffered by the petitioner.
In the above view of the matter, the impugned order dated October 15, 1992, is set aside. The application under section 273A of the Act is restored to the file of the Commissioner of Income-tax, City VII, Mumbai. The proceedings are remitted back to him for consideration afresh following the principles of natural justice keeping all rival contentions open.
The Commissioner of Income-tax having jurisdiction to deal with the matter is directed to decide the application as expeditiously as possible, in any event within 6 months from the date of receipt of the copy of this order.
In the result, the petition is allowed. Rule is made absolute in terms of the above order with no order as to costs.
8.2 We find the Hon'ble Bombay High Court in the case of Anant Chunilal Kate (supra) has held as under :
"We carefully perused the judgment of the Tribunal. The Tribunal did not at all treat the compromise decree as a lawful decree. The Tribunal was under impression that the rights and liabilities of the parties were not determined after applying the mind to the contents of the contract and after appreciation of evidence. The Tribunal has made a distinction between the decree passed after considering various contentions raised and case law referred to by the parties and a decree passed in accordance with the compromise reached by the parties outside the court. The Tribunal's decision in this behalf is contrary to the well-settled legal position. A decree in terms of settlement arrived at by the parties before the court has the same binding force as any other decree. In the case of Kumar Sudhendu Narain Deb v. Mrs. Renuka Biswas [1992] 1 SCC 206, the apex court has held that the decree in terms of settlement arrived at by the parties before the court has the same binding force as any other decree. The settlement was not arrived at outside the court.
In the instant case, the matter was compromised in the High Court and on the basis of the terms of compromise, the compromise decree was passed. Under the circumstance, the compromise decree in first appeal, which was pending before the High Court, is a legal decree for all purposes. Under the circumstances, the conclusions drawn by the Tribunal with regard to the nature of compromise decree are liable to be set aside. Accordingly, we answer question No. 1 in the affirmative.
Section 54 of the Transfer of Property Act speaks about the sale of immovable property. Admittedly, Pardeshi, the owner of the land, did not execute a sale deed in favour of the appellant. In the absence of a sale deed, the appellant does not become the lawful owner of the immovable property, agreed to be sold in his favour. In the absence of a sale deed of the land, the appellant has no legal right to sell the plots. Under the circumstances, it cannot be said that the appellant had a right to receive the payment. By way of compromise decree, the appellant was to return the amount of Rs. 1,25,418 to Pardeshi and 10 was to receive back his earnest money of Rs. 50,000. The position, therefore, boils down to this that the appellant returned the sale proceeds of 17 plots, i.e., Rs. 1,25,418 to Pardeshi and, therefore, the said amount cannot be added in the disclosed income, which was initially shown by the appellant in the return of income for the year 1981-82.
In the case of CIT v. Hindustan Housing and Land Development Trust Ltd. [1986] 161 ITR 524, the Supreme Court has held that there is a clear distinction between the right to receive payment as in dispute and right to receive payment as admitted. In the instant case, the right to receive payment was in dispute and in view of the compromise decree in first appeal, which was pending before the High Court at Bombay, the appellant was required to return the whole of the sale proceeds of Rs. 1,25,418 to the land owner, Pardeshi. We, therefore, answer question No. 2 in favour of the appellant and against the Revenue. Under the circumstance, the judgment passed by the Tribunal is liable to be quashed and set aside.
In the result, the tax appeal filed by the assessee is allowed. The order passed by the Tribunal is quashed and set aside. The addition of Rs. 98,818 made in the income of the appellant for the assessment year 1981-82 by the respondent is set aside from the return. No order as to costs.
8.3 We find the Pune Bench of the Tribunal in the case of B.G. Shirke Construction Technology Private Limited (supra) has held as under :
"21. In any case, the judgment of the Hon'ble Supreme Court in the case of Goetz (India) Ltd. (supra) does not impinge on the powers of appellate authorities to entertain a fresh claim which was hitherto not preferred by the assessee in the return of income, as explained by the Hon'ble Delhi High Court in the case of Jai Parabolic Springs Ltd. (supra). Accordingly, there was no impediment for the CIT(A) to have entertained the impugned claim especially when the required facts to adjudicate the controversy were already on record".
8.4 In view of the above decisions cited (Supra), we deem it fit and proper to restore this issue to the file of the Ld. CIT(A) with a direction to adjudicate the issue afresh regarding the correct value of sale consideration i.e. Rs.3,23,70,000/- or Rs.2,91,12,500/-. The Ld. CIT(A) shall give adequate opportunity of being heard to the assessee and decide the issue as per law. Ground Nos. 2 and 2.1 of the assessee are accordingly allowed for statistical purposes. 11
9. Ground of appeal No. 3 of the assessee reads as under:
"3. The learned CIT(A) erred in not admitting the additional evidence regarding exemption u/s. 54B of Rs.67,00,676/- on the ground that the said claim was not made by the assessee in the return of income."
9.1 Facts of the case, in brief, are that the assessee in its additional ground of appeal before CIT(A), contended that the exemption u/s 54B may be additionally allowed in respect of purchase of two more lands at Rs. 67,00,676/-, which was not claimed before the A.O. The Ld.CIT(A) noticed that the total amount of investment in land for the purposes of carrying out of agricultural operations was Rs.1,86,56,890/-, which was claimed by the assessee in the return of income and has also been allowed. However, now the assessee through this additional ground is contending that two more agricultural lands were purchased for an extra amount. He referred to the written submission dated 15.03.2010 by the assessee which reads as under :
"In this case, the assessee has raised an additional ground of appeal relating to claim of exemption u/s 54B on account of purchase of following two agricultural lands :
S. No. Particulars Date of Purchase Amount (Rs.)
1 S. No. 43/2/2, Village Manjari, 06.08.2007 19,40,400/-
Pune
2 S. No. 43/2/2 & 43/3, Village 06.08.2007 47,60,276/-
Manjari, Pune
The assessee submits that the above agricultural lands were purchased by the assessee within the time limit prescribed u/s 54B. However, in the return of income, the exemption u/s 54B was not claimed since it had claimed the exemption in respect of the land purchased at S.No. 43/1B. However, in the asst. order, the learned A.O. has not accepted the claim of the assessee regarding the exemption u/s 54B in respect of the land at S.No. 43/1B and he has also made addition in respect of the cost of acquisition as on 01.04.1981. As clarified above, the learned A.O. did not ask the assessee for justification of the 01.04.1981 cost and therefore, the assessee was under a bona fide belief that the claim of the FMV at 12 Rs.13.50/- was accepted by the A.O. In view of the above facts, the assessee did not point out to the A.O. that he had also purchased additional two agricultural lands and hence, the assessee has raised the additional ground of appeal for allowing exemption u/s 54B in respect of the above referred lands. The copies of the purchase deeds are enclosed herewith and the said lands are agricultural lands and being used by the assessee only for agricultural purposes. The copy of the 7/12 extracts of the said lands are enclosed herewith. The assessee requests for admission of additional ground of appeal as well as the additional evidence since there is reasonable cause on the part of the assessee in not submitting it at the asst. level. In this context, the assessee places reliance on the decisions referred in para 5.3 of the submissions.
The assessee reiterates that the said lands purchased are agricultural lands and even as on date, agricultural operations are being carried out on the said lands. We also request Your Honour that you may depute any of your inspectors for visiting the site. As the lands are agricultural lands and are being used for agricultural purposes, the exemption u/s 54B may kindly be allowed.
7.1 For this purpose request for admission of additional evidence has also been made vide letter dated 15.03.2010, being the purchase deed of these two lands and 7/12 extracts showing that these particular two pieces of lands were used for agricultural purposes."
9.2 However, the Ld.CIT(A) was not satisfied with the arguments advanced by the assessee and rejected the same by observing as under :
"7.2 The claim of the assessee is considered carefully, but not found to be acceptable. This is again a similar issue as decided by ground no. 4 related to the cancellation deed, by virtue of which the assessee sought to reduce the consideration for sale of land which he had himself shown in the return of income. Again, here also he is making a claim to enhance the claim u/s 54B by an amount of Rs.67,00,676/-, which is over and above the amount of Rs.1,86,56,890/-, which he had claimed in the return of income. Considering the discussion made in respect of ground no. 4 at para 5 to 5.4 above, based on the judgment of Hon'ble apex court in the case of Goetz India Ltd., a claim which has not been made in the return of income or by way of filing revised return cannot be considered at this stage. In fact, it is a claim which was not even made before the A.O. as well. Relying on the same reasoning and basis as discussed in respect of ground no. 4, the contention of the assessee is not found to be acceptable and the additional evidence furnished for this purpose is also not allowed to be admitted, as none of the conditions given in Rule 46A of the I.T. Rules have been found to be fulfilled. The additional ground of appeal is, therefore, liable to be dismissed".
9.3 Aggrieved with such order of the CIT(A) the assessee is in appeal before us.
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10. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. We find the Ld. CIT(A), based on the decision of the Hon'ble Apex Court in the case of Goetz India Ltd. (Supra), held that a claim which has not been made in the return of income or by way of filing revised return cannot be considered by him. We have already decided an identical issue in the assessee's grounds of appeal Nos. 2 and 2.1. In the said grounds, we have restored the issue to the file of the Ld. CIT(A) with a direction to entertain the ground raised by the assessee before him. Following the same reasoning, we restore the issue to the file of the Ld. CIT(A) with the direction to adjudicate the ground raised by the assessee before him. Needless to say the Ld. CIT(A) shall give due opportunity of being heard to the assessee and decide the issue as per law. We hold and direct accordingly. This ground of appeal by the assessee is accordingly allowed for statistical purposes.
11. Ground No. 4 being general in nature is dismissed.
12. The remaining grounds by the Revenue read as under:
"6. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) grossly erred in failing to appreciate that deduction u/s. 54B is to be given only on purchase of land for being used for agricultural purpose whereas in the present case, the assessee's activities consist of real estate agent and petroleum product dealership, which would clearly indicate that the assessee's purpose in purchasing the land was not to carry agricultural activity.
7. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) grossly erred in failing to appreciate that the intention of the legislature in providing deduction u/s. 54B is to allow the said deduction to an agriculturist who sells his land and buys another piece of land; and not to a person who deals in real estate and who buys land - let it be an agricultural land - at one point to time to sell at a later point of time to earn profit.14
8. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) failed to take note of the fact that the seller of the impugned land had shown capital gain on transfer of the said land by considering it as an urban property which would clearly indicate that the land was not meant to be used for agricultural purpose".
12.1 Facts of the case, in brief, are that the assessee claimed exemption u/s. 54B(1) to the tune of Rs.1,86,56,890/- being re- investment in agricultural land which falls within 8 Kms from the municipal limits. The Assessing Officer observed that the purchased land does not fall within the ambit of agricultural land. He rejected the claim of the assessee that he has purchased agricultural land and was performing agricultural activity on the said land and the conditions u/s. 54B are satisfied. Rejecting the various explanations given by the assessee the Assessing Officer disallowed the claim of deduction u/s. 54B.
12.2 In appeal the Ld. CIT(A) allowed the claim of the assessee by observing as under:
"4.3. I have considered the submissions of the appellant and material available on record. The provisions of section 54B make it clear that when the Capital gains is arising from the sale of land which was being used for agricultural purposes upto two years before the date of sale, and if the appellant has within a period of two years from that date purchased any other land for being used for agricultural purposes, then the exemption u/s 54B is to be granted as per this section. Therefore, it is provided that the land to be purchased was for being used for agricultural purposes. It has been clarified by the appellant before the A.O. as well as during the appellate proceedings, that, this land was actually being used for agricultural purposes even afterwards and till date, for which the relevant 7/12 extracts were also filed during the assessment proceedings. Secondly, the A.O. has relied upon section 2(14), which provides for the definition of capital asset, and section 2(14)(iii) specifies as to what does not constitute a capital asset. This definition makes it clear that the agricultural land in India is to be considered as capital asset only if it is located within the distance of 8 kms from the limits of the municipality or cantonment board. Therefore, the A.O. has obviously mixed up this definition of capital asset u/s. 2(14), as against the provisions of section 54B, which only provides that the land should be purchased for carrying out agricultural operations. The documents furnished before the A.O., 15 being purchase deed of the land as well as the 7/12 extracts, showed that the land purchased was actually being utilised for agricultural purposes during the year under consideration and even afterwards. This makes it abundantly clear that the conditions given in section 54B are satisfied. The disallowance of claim u/s. 54B is, therefore, not found to be tenable in law and the same is directed to be allowed. The grounds of appeal nos. 3 to 3C are accordingly, allowed."
12.3 Aggrieved with such order of the CIT(A) the Revenue is in appeal before us.
13. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. The Ld. DR could not controvert the finding given by the Ld. CIT(A) that the assessee had submitted before the Assessing Officer as well as before him that this land was actually used for agricultural purpose even afterwards and till date and that the 7/12 extracts were also filed during the assessment proceedings. The Ld. DR also could not controvert the finding given by the CIT(A) that the assessee fulfils the conditions given in Sec. 54B. In absence of any contrary material brought to our notice by the Ld. DR against the order of the CIT(A) we find no infirmity in the same which in our opinion is a reasoned one. Accordingly, the order of Ld.CIT(A) is upheld on this issue and the grounds raised by the Revenue are dismissed.
14. In the result, the appeal filed by the assessee as well as Revenue are partly allowed for statistical purposes.
Pronounced in the Open court on 10-04-2014.
Sd/- Sd/-
(SHAILENDRA KUMAR YADAV) (R.K. PANDA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Pune, dated: 10th April, 2014
RK/Satish
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Copy of the order is forwarded to:
1. The Assessee
2. The Department
3. The CIT(A)-II, Pune
4. The CIT-II, Pune
5. D.R. "A" Bench, Pune
6. Guard File
By order
// True Copy //
Senior Private Secretary,
Income Tax Appellate Tribunal, Pune