TaxTMI 
TaxTMI 
2018 (10) TMI 1342
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....eturn filed the assessee had claimed exemption of Rs. 1,21,15,480 /- u/s 54B,54D,54G and 54F etc. Subsequently, the case was selected under scrutiny by issuing of notice u/s. 143(2) of the act on 2nd Sep, 2014. The assessee is an individual engaged in the business of vehicle finance in the name and style for Arbuda Lease Finance Company through hire/purchase. He has shown income from vehicle leasing, capital gain and interest income for the year under consideration. On scrutiny, the assessing officer noticed that assessee has claimed exemption u/s. 54B of the act. The assessee along with two other co-owners has sold a piece of land for sale consideration of Rs. 4,27,17000/- and the share of the assessee in the sale consideration was Rs. 1,42,39000/-. The land was purchased on 8th Nov, 2016 and was sold on 26th March, 2013. The loan term capital gain was worked out at Rs. 1,29,74,461/- against which aassessee has claimed exemption of Rs. 1,21,15,480/- u/s. 54B of the act. The assessing officer has explained the assessee about the conditions and requirement of provisions of section 54B,54D,54G and 54F and asked him to explain the same vide letter dated 28/12/2015. The assessee has st....
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....sessment order. The assessee has not furnished any material which indicate that co-owner Sanjay K Pate has misused the power of attorney. Further discrepancies noticed in the revenue records and assessee has also not disclosed any agricultural income in the return of income .Vide letter dated 22nd March, 2016 f Mamatdar stated that the land sold was a non-agricultural land and Talati had inadvertently made entry of agricultural crop as jwar. Consequently, the assessing officer has rejected the claim of exemption under section 54B of the act. 4. Aggrieved assessee filed appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assesse. The relevant part of the findings of the Ld. CIT(A) is reproduced as under:- "4.3 I have carefully considered the assessment order and submission filed by appellant. The brief facts of present case are that appellant along with two co-owners sold land bearing survey No 1092/1 admeasuring 122484 Sq. meter at the sale consideration of Rs. 4,27,17,000/- and appellant's share in the land is.1,32,39,000/-. The appellant claimed indexed cost of acquisition of Rs. 12,64,539/- which is not disputed by AO. The appellant ....
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....of residential house, hence, he restricted such claim at Rs. 30,73,900/- as against Rs.35,00,000/-. On the other hand, appellant has reiterated the submission as made before AO. So far as observation of AO that Sanjay Patel who purchased 25% of land has no relevance in land after 08/02/2010, appellant argued that said Sanjay Patel had remained co-owner of the agriculture land and acted as-POA for submitting application for obtaining NA order. So far as reliance placed by AO on letter given by Mamiatdar, appellant argued that agriculture land cannot be used for any other purpose but non agriculture land can be used for agriculture purpose and same cannot be ground for rejection of deduction u/s 54B of the Act. The appellant has also submitted Affidavit of Shri Bhopaji Chaturji Thakore working as agricultural labour for carrying out agriculture land of appellant since 2009 till 2013 to substantiate the claim that actual agricultural operation was carried out. So far as denial for deduction u/s 54F of the Act, appellant has referred to details submitted in assessment proceedings and argued that both plot purchase and building construction expenses are eligib....
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....lant. Even Sanjay Patel who was POA of appellant & others and also third party in present land deal has again converted agriculture land into NA land in subsequent year for putting scheme on it. The AO has also drawn attention to the fact that appellant along with Sanjay Patel and Mitesh Kumar Natwarlal Thakkar, member of group who purchased the land are engaged in the business of colonization and they have placed scheme "Dolphin" in land sold by appellaritThence, intention of appellant & other coowners right from beginning was to use land for commercial purpose and not for agriculture "purpose. To substantiate the claim that land was used for agriculture purpose, appellant has submitted agriculture produce bills on above land for last three years but such argument cannot be accepted as 'appellant submitted bills for selling agriculture produce namely Arenda, Raida, Gwar whereas land revenue records show that production of "Jawar" was made by appellant in such period. However, letter issued by Mamlatdar of Patan dated 22/02/2016 clearly suggest that land was NA land during FY 2011-12 to 2013-14 and Talati has erred in mentioning the fact that "Jawar" was produced. Thes....
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....not submitted in assessment proceedings even no other direct evidences suggesting such working of farmers has submitted by appellant nor any details of payment to such worker from books of account of appellant was submitted. The Form 12 submitted by appellant itself suggest that no production was made in FY 2009-201 & 2010-11 hence authencity of above Affidavit cannot be accepted as above labourer has Slated that he is carrying out agricultural activity since 2009-2010 whereas no such production exist in revenue records. The appellant has also submitted Affidavit of Kamlesh C Patel for giving land for carrying out agricultural activity on behalf of appellant from 01/04/2010. However, such Affidavit is not notarized nor appellant has shown to have make any payment to above person as per conditions mentioned in such Affidavit which creates serious doubt regarding genuineness of Affidavit. Even same was not submitted before AO and it suggest that agricultural operation was carried out since 01/4/2010 whereas land revenue record suggest that no agricultural operation was carried out in FY 2010-11. The appellant has created such Affidavit to prove its contention that land was agricultur....
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....ultural land into nonagricultural which was subsequently cancelled. The assessee has also submitted sale bills of agriculture produce, copy of 7/12 as well as certificate of Talati to prove that land sold in year under consideration was used for agriculture activity by him. After perusal of material on record we observe that it is undisputed fact that Sanjay K Patel was one of the confirming parties of sale of the land on 26th March 13 which demonstrate that Sanjay K Patel was one of the stakeholders along with the assessee and fully associated with the use and sale of the land. The assessee along with Sanjay Patel and other member of group were engaged in the business of colonization and they have placed scheme "Dolphin" in the land sold by assessee. The assessee has neither substantiated with any relevant material that that co-owner Sanjay K Pate has misused the power of attorney nor filed any evidence of any legal action taken against him for any unauthorized using of the power of attorney . Discrepancies were also noticed in the revenue records as evident from the letter dated 22nd March, 2016 of Mamlatdar affirming that the impugned land was a nonagricultural land and the Tala....