TaxTMI 
TaxTMI 
2020 (1) TMI 724
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....e second round of quantum proceedings by the AO pursuant to revisional directions of the Pr.CIT challenged in ITA No. 1226/Ahd/2013(supra). Thus, there exists discernable common thread on factual aspects in both the appeals. Consequently, both the matters were heard together and disposed of by this common order. 3. To begin with, we shall first take up ITA No. 1226/Ahd/2013 to evaluate the objection of the assessee towards lack of jurisdiction of the Pr.CIT assumed under s.263 of the Act. 3.1 The assessee in the present appeal has challenged revisional jurisdiction of the Pr.CIT invoked under s.263 of the Act whereby the order of the AO under s.143(3) of the Act dated 30.09.2010 has been impugned by the Pr.CIT on the grounds of lack of inquiry into certain vital aspects concerning eligibility of deduction claimed under s.54B of the Act. 3.2 Briefly stated, the assessee, an individual, has derived income inter alia under the head 'capital gains' on sale of certain land parcels held as 'capital asset'. The return filed by the assessee for AY 2008 09 in question was subjected to scrutiny assessment and consequently assessment order was framed under s.143(3) of the Act. The AO....
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....ted Rs. 31,00,000/- (upto 07/12/2007) in a Capital Gain savings account of Oriental Bank of Commerce and claimed exemption u/s. 54B for the amount so deposited. It was noticed from the account statement that you had withdrawn a sum of Rs. 30,95,000/- on 12/12/2007. As per provisions of Section 54B, the amount so deposited in the Capital Gain savings account, has to be utilized for the purchase of new asset and within the specified period. In your case, though you had withdrawn the amount from the account, there was no proof in the assessment records to ascertain that the amount withdrawn was invested in the specified asset i.e. purchase of any agricultural land. Thus, out of Rs. 31,00,000/- claimed exempt u/s.54B, Rs. 30,95,000/- was required to be disallowed and added back to your income. This being not done, resulted in underassessment of Capital Gain of 30,95,000/- with consequent short levy of lax of Rs. 9,11,725/-. From the discussion above, it may be seen that the assessment order passed u/s.143(3) of the Income Tax Act, 1961 on 30/09/2010 for the A.Y.2008-09 is clearly erroneous and hence prejudicial to the interests of the Revenue. You are therefore reques....
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....oresaid extent. 3.5 Aggrieved by the revisional action of the Pr.CIT for modification in the assessment order so framed after scrutiny, the assessee preferred appeal before the Tribunal and challenged the usurpation of revisional jurisdiction by the Pr.CIT. 3.6 In its defense, the learned counsel for the assessee submitted at the outset that the necessary background for exercise of revisional power of Pr.CIT does not exist in the instant case. The learned counsel referred to the provisions of Section 54B of the Act and contended that the provisions of Section 54B applied to sale of land which is used for agricultural purpose for a certain period. The provision does not require the sale of an agricultural land per se. It only requires sale of land which is used for agricultural purpose. In this background, the learned counsel adverted to the facts and contented that the land sold was cultivated which is reflected in copy of 7/12 showing that there was a 'jawar crop' produced in the said land. Talati certificate was also referred to support its claim towards cultivation. It was thus contented that land was used for agriculture purpose prior to sale and substantial amount was re....
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....ence placed on record to show the activity of cultivation on the land. It was further pointed out that although the land stood converted officially as non agricultural land on 14.05.2007, it is common knowledge that the process for conversion takes its own time and the application for conversion must have been made well in advance. It was further pointed out that total consideration agreed for sale was Rs. 7,81,00,000/- whereas the assessee has only received Rs. 1,21,00,000/- at the time of execution of Banakhat and remaining amount has been naturally received about the time of execution of sale deed on which date the land was neither an agricultural land nor it was used or capable of being used for agricultural purposes. 4.2 Adverting to the second aspect, the learned DR submitted that in the absence of any documentary evidence placed before the AO for mere transfer of fund from one account to other designated account as claimed, the Pr.CIT was correct in sending matter back to the file of the AO to examine this aspect. The learned DR accordingly submitted that the revisional order of the Pr.CIT does not call for any interference in the facts and circumstances of the case. 5....
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....expenses voucher produced for expenditure incurred on Tractor does not inspire any confidence. Such material was not produced before the lower authorities as well. The assessee has failed to adduce any satisfactory evidence that the land was subjected to any systematic agricultural operation in last two years immediately preceding the date of transfer as required in law indeed. The reply of the assessee and evidence relied thereupon appears to be cosmetic. The AO has failed to make any inquiry on this vital aspect while admitting the claim of the assessee and allowed the claim summarily. The Pr.CIT in our view correctly appreciated the facts and applied the law in perspective to draw an adverse conclusion on eligibility of deduction. We see no error in the conclusion drawn by the Pr.CIT to hold that the claim under s.54B of the Act has been allowed without fulfillment of prescribed conditions. We thus decline to interfere with the revisional order of the Pr.CIT on this score. 5.2 Notwithstanding that claim of deduction under s.54B of the Act is found to be in contravention with law and therefore the second aspect of the assessee need not to be gone into, we would however deal wi....