TaxTMI 
TaxTMI 
TaxTMI 
2016 (3) TMI 1266
X X X X Extracts X X X X
X X X X Extracts X X X X
....ision of the Ld. CIT(A) is right in deleting the addition of Rs. 2,40,91,01/- made by the Assessing Officer ( on account Capital Gain), relying upon on decision in the case of Sanjeev Lal Vs. Cit reported as (2014) 269 CTR(SC) which is not applicable to the facts of this case and by ignoring the facts submitted in remand report. (b) Whether the Ld. CIT (A0 is right in allowing expenses u/s 48(1) paid at Rs. 78,48,358/- to the third partly cultivators of land when the assessee is Khud Kasht. (c ) Whether the CIT(A) is right in allowing deduction u/s 54B whether the land was purchased before sale of land on which the capital gain has arisen." 3. At the outset, the learned DR submitted that she was not prepared for the arguments, therefore, she filed adjournment letters but going through the files we found that appeals can be disposed off, therefore, adjournment applications were rejected and learned AR was directed to apprise about the facts of the cases. 4. The brief facts of the cases as noted in the assessment order are that the assessment in these cases was completed u/s 144 of the I.T. Act as the assessees did not co-operate in the assessment proceedings. The cases of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ho had the possession of the land and those persons had to be paid eviction charges as detailed above, the claim of the assessee would not fall under the purview of section 54B as the said land was not being used by the assessee himself for agricultural purposes, I do not agree with the view of the Assessing Officer on the issue as the requirement of usage of agricultural land is with reference to the land and not with reference to the person who owns it. For instance, if a person owns agricultural land and derives rent from the same, it also qualifies as agricultural income not taxable under Income Tax Act, 1961 even though the agricultural operations are not performed personally by said owner of agricultural land. The situation in the current case is also same as the owner of the land had given impugned agricultural land for the purpose of tiling who in the course of time developed vested interest in the form of possession of land but the fact remains that land itself had been used for agricultural purposes all along and does not lose its character of being used as agricultural land whether the operations are performed by the owner or the tenant. Therefore, the view of the Assess....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed provision of section 54B is to ensure that anybody selling agricultural land should not be subjected to taxation if the proceeds thereof are used for buying agricultural land. The fact that the advance/ earnest money had been used for making the consequential purchase should not come in the way of allowing the claim of deduction under section 54B. Even otherwise, the AR has placed reliance on the judgment of Hon'ble Apex Court in the case of Sanjeev Lai etc. Vs. CIT 269 CTR 1 which is directly on the issue of definition of 'transfer' under section 2(47) and claim of deduction under section 54. The Hon'ble Court has observed that even an agreement to sell could amount to a transfer for the purposes of section 2(47)/54. The specific observations of the Hon'ble Court are as under: "In normal circumstances by executing an agreement to sell in respect of an immoveable property, a right in personam is created in favour of the transferee/vendee. When such a right is created in favour of the vendee, the vendor is restrained from selling the said property to someone else because the vendee, in whose favour the right in personam is created, has a legitimate right to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....w. A right in personam had been created in favour of the vendee, in whose favour the agreement to sell had been executed and who had also paid Rs. 15 lakhs by way of earnest money. No doubt, such contractual right can be surrendered or neutralized by the parties through subsequent contract or conduct leading to no transfer of the property to the proposed vendee but that is not the case at hand. In addition to the fact that the term "transfer" has been defined under Section 2(47) of the Act, even if looked at the provisions of Section 54 of the Act which gives relief to a person who has transferred his one residential house and is purchasing another residential house either before one year of the transfer or even two years after the transfer, the intention of the Legislature is to give him relief in the matter of payment of tax on the long term capital gain. If a person, who gets some excess amount upon transfer of his old residential premises and thereafter purchases or constructs a new premises within the time stipulated under Section 54 of the Act, the Legislature does not want him to be burdened with tax on the long term capital gain and therefore, relief has been given to him....
X X X X Extracts X X X X
X X X X Extracts X X X X
....p the appeal in ITA No.26 in the case of Sh. Assa Singh. At the outset, learned AR submitted that the assessees were related to each other and in one of the case of Sh. Jit Singh who was co-owner of land the learned CIT(A) had allowed eviction charges paid to people occupying land and Revenue had not filed appeal before the Tribunal against such allowance of such expenses and therefore, in a way the Revenue should have not been aggrieved in the present cases also against payment of similar charges and in this respect learned AR invited our attention to paper book page 4 where grounds of appeal filed by Revenue in the case of Mr. Jit Singh were placed and he submitted that there is no such ground taken by Revenue against eviction charges allowed by learned CIT(A). The learned AR also invited our attention to paper book page 1 where Assessing Officer had accepted that Rs. 78,48,358/- were paid for the eviction of land to persons in possession of land. In view of the above findings of Assessing Officer in remand report it was argued that out of sale proceeds of Rs. 2,72,42,500/- if the amount of eviction charges are deducted the net sale proceeds comes out at Rs. 1,93,94,142/- and ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... CTR 0001 decided by Hon'ble Apex Court. It is an undisputed fact that assessee had not co-operated during the assessment proceedings and therefore, assessment was completed u/s 144 and it is only during appellate proceedings that assessee filed his submissions. The learned CIT(A) forwarded the submissions to Assessing Officer for remand report. The Assessing Officer in his remand report had observed that assessee for the claim u/s 54B had purchased agricultural land measuring 61 kanal at village Kingra for Rs. 1,20,37,500/- but he observed that date of purchase of this land predate the date of sale of the land sold by the assessee and he raised further objection regarding another land measuring 28 Kanal 17 Marlas for Rs. 53,00,000/-. The Assessing Officer observed that the final registry of this land was not got done in favour of assessee as the matter was under appeal. Therefore it was submitted that the eligibility of exemption u/s 54B may be decided accordingly. As regards the first objection of purchase of some part of agricultural land before the date of sale, the learned CIT(A) has made a clear finding of fact that payment for purchase of such land was made out of advances r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....sferor for some reasons do not execute the sale deed. Therefore, when the assessee purchased land by way of execution of an agreement by the transferor irrespective of the fact that sale deed could not be entered the assessee is eligible to enforce his right and therefore, he has rightly held that assessee is deemed to have purchased the land. In view of the above findings of learned CIT(A), he has rightly allowed the exemption u/s 54B of the Act. In view of the above, Ground No.1(a), (c) of ITA No. 26(Asr)/2015 are dismissed. 14. As regards Ground No.1(b), we find that Assessing Officer in his remand report has clearly held that payments for eviction of land was made as the Assessing Officer had verified the confirmation of payments received by eleven persons who were paid the amounts for eviction. Therefore, learned CIT(A) has rightly allowed the deduction of such eviction charges u/s 48(1) of the Act. We further find that in the case of a joint owner Mr. Jit Singh who had also paid similar eviction charges and learned CIT(A) has deleted the addition made by Assessing Officer on account of eviction charges, and the Department has not filed any appeal for allowance of eviction ch....