2022 (9) TMI 1095 - AT - Income Tax

Tribunal denies tax deduction for capital gain on sale of agricultural land.

Shri Preet Singh Versus Assistant Commissioner of Income Tax, Circle-32 (1), New Delhi.

Shri Preet Singh Versus Assistant Commissioner of Income Tax, Circle-32 (1), New Delhi. - TMI Issues:1. Denial of deduction under Section 54B/54F of the Income Tax Act.2. Admission of additional ground and additional evidence by the Tribunal.Analysis:Issue 1: Denial of deduction under Section 54B/54F of the Income Tax ActThe appeal was filed by the Assessee against the order of the Commission of Income Tax (Appeals) concerning the Assessment Year 2013-14. The Assessee, an individual, had claimed exemption on Long Term Capital Gain arising from the sale of agricultural land. However, the Assessing Officer found discrepancies in the claim. The land purchased in 2005-06 was sold, and the capital gain was computed. The Assessee claimed deduction under Section 54B for acquiring agricultural land, but it was revealed that the new asset purchased was commercial property in Gurgaon, not agricultural land. Consequently, the exemption under Section 54B was denied. Additionally, the alternative claim under Section 54F was also rejected as the property purchased was not residential. The total income was assessed, bringing the capital gain to tax.Issue 2: Admission of additional ground and additional evidence by the TribunalThe Assessee challenged the denial of deduction under Section 54B through additional grounds, claiming that the agricultural land sold did not fall within the definition of a capital asset under Section 2(14) of the Act. The Assessee sought admission of additional evidence to support this claim. The Revenue opposed the admission, arguing that the Assessee was attempting to introduce a new case without relevant facts on record. The Tribunal deliberated on the admission of additional grounds and evidence. It was established that the evidences supporting the additional ground were not available before the Revenue authorities. Consequently, the Tribunal declined to admit the additional ground for adjudication. The appeal of the Assessee was dismissed, and the additional evidence was not entertained.In conclusion, the Tribunal upheld the denial of deduction under Section 54B/54F and refused to admit the additional ground and evidence due to the lack of relevant facts available before the Revenue authorities. The appeal was dismissed, and the order was pronounced on 22.09.2022.