2023 (2) TMI 915 - AT - Income Tax

Successful Appeal: Correct Assessment Year for Capital Gain, Interpretation of Tax Provisions, Factual Support

Hukumchand Choudhary Versus ITO-1 (3), Indore

The Appellate Tribunal ITAT Indore allowed the appeal, emphasizing the correct assessment year for long term capital gain, the comprehensive ... Benefit of exemption u/s 54F & 54B - Long term capital gain from sale of urban agricultural land - AO held that capital gain was taxable in A.Y. 2012-13 and not 2011-12 - HELD THAT:- It is pertinent to note that the Ld. A.R. has distinguished the decision in factual aspect that of Balbir Singh Maini [2017 (10) TMI 323 - SUPREME COURT] and Suraj Lamp & Industries [2011 (10) TMI 8 - SUPREME COURT] In this particular case the assessee is an individual and he has sold 1/4th share of the said land and purchased the land (agricultural land) in A.Y. 2011-12 itself. The execution of the agreement related to purchase of land and possession of the land was in A.Y. 2011-12 only. The registration is in April 2011cannot debar the assessee when the assessee has claimed benefit of exemption under Section 54F & 54B is in A.Y. 2011-12 itself. The same has not been granted in that particular year. As the assessee has offered his income from Long Term Capital Gain in A.Y. 2011-12 only. These aspects were not taken into account by the Assessing Officer as well as CIT(A). Hence, the appeal of the assessee is allowed. Issues:1. Determination of long term capital gain from the sale of urban agricultural land for A.Y. 2012-13.2. Interpretation of Section 2(47)(v) for denying exemption claimed under Section 54F & 54B.3. Assessment of income for A.Y. 2011-12 and A.Y. 2012-13.Analysis:1. The appellant challenged the order of the Assessing Officer (AO) regarding the determination of long term capital gain for A.Y. 2012-13. The AO observed the sale of immovable property by the assessee, triggering Long Term Capital Gains. The AO issued a notice under Section 148, and after compliance, added Rs. 1,07,93,900 as Long Term Capital Gain. The CIT(A) upheld the AO's decision. The appellant argued that the gain accrued in A.Y. 2011-12, correctly disclosed in the return, and exemption under Section 54F & 54B was claimed. The AO's reliance on the Balbir Singh Maini judgment was contested, emphasizing the date of possession and agreement as crucial for taxation.2. The AO's interpretation of Section 2(47)(v) to deny exemption under Section 54F & 54B was challenged. The appellant contended that the transaction fell under provisions (i), (ii), and (vi) of Section 2(47), not just (v). The appellant cited various legal precedents to support the argument, highlighting the necessity of considering all relevant provisions for tax treatment.3. The appellant's income for A.Y. 2011-12 was assessed and accepted, with no rejection of Long Term Capital Gain or denial of exemptions. The appellant sold a share of urban agricultural land in A.Y. 2011-12, purchased new agricultural land, and constructed a house. The sale deed was executed just after the end of A.Y. 2011-12. The appellant's compliance with tax laws and production of necessary documents were emphasized. The Tribunal noted the factual distinctions from previous cases cited and allowed the appeal, considering the correct accrual year for the gain and exemption claims.In conclusion, the Appellate Tribunal ITAT Indore allowed the appeal, emphasizing the correct assessment year for long term capital gain, the comprehensive interpretation of relevant tax provisions, and the factual distinctions supporting the appellant's position.