TaxTMI 
TaxTMI 
TaxTMI 
2016 (8) TMI 410
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....as not considered the circle rate prevailing at the time of agreement to sell entered by the appellant on 4-8-2007. 3 As per on the facts and circumstances of the case of the Assessing Officer has erred to pass the order on 29.12.2011 without affording any opportunity to the appellant about the addition of the amount of Rs. 2716388/-under the head capital gains. The case in fact has been adjourned to 1.12.2011 for want of confirmation of the cash creditors, the appellant attended the office of the assessing officer on that date and thereafter, but was told that the assessment file is with the additional commissioner of income tax and thus no opportunity has been given to the appellant for rebuttal is against the principal of natural justice. 4. As per on the facts and circumstances of the case the CIT-(Appeals) has erred in not allowing the full amount of exemption of Rs(8105300/+2552800/)= Rs. 10658100/- on account of investment in agriculture land u/s 54B of the Income Tax Act 1961. 5 As per on the facts and circumstance of the case the CIT-(Appeals) has erred in withdrawing the deduction u/s 54B of the Income Tax Act 1961, amounting to Rs. 7500300/- out of the deduction....
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....ct on the basis of circle rate at the time of execution of sale deed. He further stated that AO was of the view that the circle rate prevailing at the time of sale deed shall be taken into consideration while computing capital and not at the time of agreement to sell. He further stated that the ownership rights in the property were vested in purchaser vide agreement to sell and execution of sale deed was merely a formality and as such the circle rate at the time of agreement to sell is relevant and applicable to the facts of the case. To support this contention, he cited the following cases laws:- - ITO vs. Modipon Ltd. (2015) 57 Taxmann.com 360 (Delhi). - DCIT vs. S. Venkat Reddy (2013) 32 Taxmann.com 324 (Hyd.) In view of the above, he stated that the assessee's case is squarely covered by the aforesaid cases of the Tribunal including the decision of the Delhi Bench, as per which the circle rate prevailing at the time of agreement to sell has to be considered for applying provisions of section 50C. Therefore, he requested that the addition of Rs. 27,16,368/- may be deleted. 5.1 With regard to next ground i.e. relating to enhancement of addition by the Ld. CIT(A) by restri....
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....ested that the order of the Ld. CIT(A) may be upheld. 7. I have heard both the parties and perused the records especially the orders of the Revenue authorities. With regard to addition of Rs. 27,16,668/- is concerned, I find that the assessee has purchased agriculture land out of the sale consideration and claimed the benefit of statutory deduction u/s. 54B as per which the resultant capital gain was claimed as exempt. The AO accepted the claim of deduction u/s. 54B but made the addition of Rs. 27,16,668/- on account of capital gain by applying provisions of section 50C of the Act on the basis of circle rate at the time of execution of sale deed. However, the ownership rights in the property were vested in purchaser vide agreement to sell and execution of sale deed was merely a formality and as such the circle rate at the time of agreement to sell is relevant and applicable to the facts of the case. I also find considerable cogency in the contention of the ld. Counsel of the assessee that similar and identical situation has been dealt by the Tribunal in the following cases:- - ITO vs. Modipon Ltd. (2015) 57 Taxmann.com 360 (Delhi). Section 50C of the Income-tax Act, 1961 - Ca....
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....05,300/- is concerned, I find that the only ground on the basis of which claim was restricted is that payment for purchase of agriculture lands was not made out of proceeds from sale of agriculture land therefore the deduction u/s. 54B should be restricted to the amount actually invested out of sale proceeds. In this regard, from the records, it reveals that the entire payment for purchase of agriculture lands was made out of sale proceeds which is corroborated from the Bank Statement enclosed with the Paper Book Page No. 2 and such there is no valid basis for any disallowance. However, Ld. CIT(A) has considered the date of issuance of cheques for purchase of property instead of date of actual debit in the bank statement in reaching to the conclusion that payment for purchase of property has not been made out of sale proceeds. Even otherwise, section 54B nowhere mandates that the purchase of agriculture land has to be made out of sale proceeds arising from sale of agriculture land. For the sake of clarity, Section 54B is reproduced hereunder:- Capital gain on transfer of land used for agricultural purposes not to be charged in certain cases. 54B. (1) Subject to the provisions ....