2002 (5) TMI 6

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....n individual, sold 15 kanals 18 marlas of land out of her share in 23 kanals 17 marlas land during the financial year 1990-91, relevant to the assessment year 1991-92. The sale was effected vide three registered sale deeds dated June 16,1990, June 23,1992 and June 26,1990, for Rs. 1,80,000 Rs. 2,35,000 and Rs. 2,64,000, respectively. While filing her return of income, she claimed exemption from levy of capital gains under section 54B of the Act on the ground that the land sold by her was agricultural land and the sale proceeds were invested in the purchase of agricultural land within two years as under : On January 8,1991 7 K.17 M. vide registration deed No.1001 for Rs. 80,000 + registration expenses; On February 19,199 1 K.2 M.....

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....d have paid such a high price for agricultural purposes; and (v) the agricultural income declared by the assessee for the current year as well as for the preceding assessment year was merely Rs. 2,500 each. The Assessing Officer, therefore, concluded that the land in question not being agricultural land, exemption under section 54B of the Act was not available to the assessee. 3. On appeal, the findings of the Assessing Officer were upheld by the Commissioner of Income-tax (Appeals) vide order dated October 24, 1994. 4. On further appeal, the Tribunal accepted the claim of the assessee by holding that the transaction in question duly fulfilled the conditions specified for relief under section 54B of the Act. 5. Mr. R.P.....

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....g provisions of this section, that is to say,- (i) if the amount of the capital gain is greater than the cost of the land so purchased (hereinafter referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital g....

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....land till 1988-89. It has also been stated that rodder grass and vegetables were grown in the kharif season. The khasra girdawari produced by the assessee also shows that agricultural operations on this land were being carried on by the assessee and other co-owners till its sale. Even the records of the Income-tax Department also show that the asses-H see had declared agricultural income from this land in her returns of the preceding two years. 7. In the light of this factual position, there is no merit in the contention of Shri Sawhney that no agricultural operations had been carried on in this land in the preceding two years and that the agricultural income shown in the returns by the assessee was not genuine. We do not think that afte....