2014 (4) TMI 470

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....r, the ld.DR submitted that the only issue arises for consideration is grant of deduction u/s 54B of the Act. According to the ld.DR, though the document was executed and registered on 28-06-2008 the CIT(A) found that on the date of agreement on 17-03-2007, the possession of the property was handed over to the purchaser towards part performance of the agreement. Therefore, there was transfer of property under the Income-tax Act. According to the ld.DR, if there is a transfer on 17-03-2007, then the transfer took place in the assessment year 2007-08, therefore, deduction u/s 54B could be claimed only in assessment year 2007-08 and not during the year under consideration. Therefore, the CIT(A) is not justified in granting deduction u/s 54B by....

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....sideration has to be paid on or before 17-03-2007 and the assessee has to hand over the physical possession of the property to the purchaser. The purchaser appears to have paid Rs.50 lakhs in three instalments before 17-03-2007 and the assessee handed over the possession of 50 cents of land. The assessee invested Rs.56 lakhs on 17-04-2007 in another agricultural land and claimed deduction u/s 54B of the Act. The assessing officer rejected this claim of the assessee on the ground that the investment was made before execution of the registered sale deed. The assessing officer found that the registered sale deed was executed on 28-06-2008, therefore, the investment made by the assessee before the execution of the sale deed may not be eligible ....

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....y, it is not known whether the assessee has actually purchased the property or not? From the order of the lower authorities it is not known when the assessee actually purchased the property. Under the Income-tax Act, the assessee has to purchase the property by taking over the physical possession. The transaction of sale shall be completed within the period of two years after date of sale i.e. 17-03-2007. In the absence of any material to show that the transaction of purchase of property by the assessee by investing the sale consideration within a period of two years from the date of sale, i.e. 17-03-2007, this Tribunal is of the considered opinion that the assessing officer has to reconsider the matter and find out when actually the sale w....