2018 (8) TMI 1244 - AT - Income Tax

Tribunal rules in favor of assessee on s. 54B deduction eligibility. Assessing Officer to verify investment details.

Manilal Dasbhai Makwana And Mahesh Dasbhai Makwana Versus The Income Tax Officer, Ward-3 (2) (3), Ahmedabad

Manilal Dasbhai Makwana And Mahesh Dasbhai Makwana Versus The Income Tax Officer, Ward-3 (2) (3), Ahmedabad - TMI Issues:Allowability of deduction under s. 54B of the Income Tax Act, 1961 concerning AY 2012-13.Detailed Analysis:1. ITA No.109/Ahd/2017:- The assessee challenged the disallowance of deduction under s. 54B of the Act.- The Assessing Officer disallowed the claim as the assessee failed to deposit the capital gains in the bank account as required by s. 54B(2) of the Act.- The CIT(A) allowed deduction for land purchased before the sale but denied deduction for land purchased after the due date of filing the return.- The Tribunal found in favor of the assessee, holding that the investment in the new asset was made before filing the belated return, complying with s. 54B(2) requirements.- The issue was remanded to the AO for verification of factual aspects regarding the investment in the new asset.2. ITA No.110/Ahd/2017:- Similar to the first appeal, the issue was the denial of deduction under s. 54B.- The Tribunal upheld the claim for deduction under s. 54B on first principles and remanded the issue to the AO for verification of investment in the new asset.- The appeal was allowed for statistical purposes.Conclusion:Both appeals were allowed for statistical purposes, with the Tribunal ruling in favor of the assessee regarding the eligibility of deduction under s. 54B of the Act. The factual aspects of the investment in the new asset were to be verified by the Assessing Officer in both cases.