2013 (11) TMI 1550 - AT - Income Tax

Appellate Tribunal allows concurrent exemptions under Income Tax Act sections 54B and 54F

The Appellate Tribunal ruled in favor of the Assessee, holding that exemptions under sections 54B and 54F of the Income Tax Act are not mutually exclusive ... Claim of investments u/s 54B and 54F - Assessee sold long term capital asset i.e. agricultural land - CIT(A) allowed claim - Held that:- No reason to interfere with the order of learned CIT(A) as it was rightly held that Assessee is entitled to exemption under both section 54B & 54F of IT Act and they are not mutually exclusive and independent of each other. Similar view was taken by various judicial forums including that of coordinate bench, Hyderabad in the case Sri Venkata Raman Uma Reddy Vs. DCIT [2013 (1) TMI 744 - ITAT HYDERABAD] - Decided in favour of assessee. Issues:Claim of investments under sections 54B and 54F - Whether mutually exclusive or can both be claimed together.Analysis:The appeal was filed by Revenue against the order of CIT(A)-II, Hyderabad concerning the claim of investments under sections 54B and 54F of the Income Tax Act. The Assessee sold agricultural land as a long-term capital asset, with the net sale consideration amounting to Rs. 3.90 crores. The Assessee purchased another agricultural land for Rs. 66 lakhs and kept the balance of Rs. 3.34 crores in the Capital Gains Account Scheme, seeking exemptions under both sections 54B and 54F. The Assessing Officer allowed exemption only under section 54F, leading to an addition of Rs. 26,27,480/-. The CIT(A) held that the provisions of sections 54B and 54F are not mutually exclusive, and the Assessee is entitled to exemption under both sections.The CIT(A) considered the contentions and case laws presented by the Assessee, highlighting that the provisions of section 54B and 54F are not expressly stated to be mutually exclusive. Various judicial decisions were cited to support the Assessee's claim that exemptions under both sections can be availed together. The Hon'ble Jurisdictional Tribunal's decision in a specific case further emphasized that sections 54 and 54F operate independently of each other, allowing for exemptions in distinct situations involving separate long-term capital assets.Upon review, the Appellate Tribunal concurred with the CIT(A)'s decision, emphasizing that the Assessee is indeed entitled to exemptions under both sections 54B and 54F. The Tribunal noted that these provisions are not mutually exclusive and operate independently of each other. The Tribunal referenced a previous decision by a coordinate bench in Hyderabad supporting the simultaneous application of exemptions under sections 54B and 54F. Consequently, the Tribunal dismissed the Revenue's appeal, upholding the Assessee's right to claim exemptions under both sections.In conclusion, the Tribunal affirmed that the Assessee can avail exemptions under sections 54B and 54F concurrently, as they are not mutually exclusive but operate independently. The decision was supported by various judicial forums, including a coordinate bench in Hyderabad, reinforcing the Assessee's entitlement to exemptions under both sections. The Tribunal dismissed the Revenue's appeal, ultimately upholding the Assessee's position and allowing the claimed exemptions under sections 54B and 54F.