TaxTMI 
TaxTMI 
2020 (2) TMI 89
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.... for the same. 2. The Ld.CIT(A) has erred in law and on facts in deleting the addition of Rs. 77,86,500/- made by A.O. without appreciating the fact that the assessee has not objected before the Sub Registrar Authority and paid the stamp duty 3. We take first ground regarding deletion of addition of Rs. 1,60,09,128/- made by the AO under section 54B of the Act. 4. Brief facts of the case in this regard are that during the year under consideration the assessee has sold ancestral agriculture land admeasuring 10117 sq.meters situated at village Ambli together with other co-owners for a consideration of Rs. 5,35,00,000/- by registered sale deed dated 17.1.2014. The assessee was having 50% share in that property, which came to Rs. 2,67,50,000/- on which capital gain is liable for taxation. The assessee has sought deduction in respect of cost of improvement of Rs. 1,60,09,128/-. The Ld.AO sought explanation for this improvement cost from the assessee. The claim of the assessee was on two counts. Firstly, it was explained by the assessee that the expenditure incurred by the assessee was between 1982 to 1993 and the assessee being an agriculturist was not required to maintai....
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.... After considering all the facts and circumstances, the additional evidence submitted by the appellant is admitted as there was a reasonable cause for not producing the evidences before the A. O. and the same is considered necessary to go to the root of the controversy involved. Therefore, same are admitted for adjudication to provide natural justice to appellant and such admission is supported by following case laws: - Kamlaben S Bhatti 44 Taxman.com 459 (Guj.) Dharmamdev Finance Pvt Limited 43 taxman.com 395 (Guj.). - ACIT VS Jogindersingh (ITA No. 2942/DELHI/2011) ITAT, Delhi - Anmol Colour India Pvt. Ltd. Vs. ITO 31 SOT 18 (JP) 121 ITJ 269: ITAT, Jaipur. - CIT Vs. Khanpur Cool Syndicate (1964) 53 ITR 225 (SC): As far as facts of the case are concerned, the appellant had sold agricultural land and incurred expenditure on account of cost of improvement on agriculture land which was not accepted by the AO. The appellant could not furnish evidences of improvement for land which happen three decades ago. Therefore, valuation made by the registered valuer of the appellant showing the value of said agriculture land on 01/04/1981 at....
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....iod of one month commencing on 15th December and ending on 14th January, 2014. The buyers of Ambli land were to get funds post 'Kamurta' and therefore, sale deed was executed immediately after end of 'Kamurta' i.e. on 17th January, 2014 even though cheques cleared after execution of sale deed. The funds from the sale of original agricultural land have been utilized as can be seen from the date-wise investment into new agricultural land which is as under: Date of Cheque as per sale deed of Ambli land Cheque No Name of the buyer who paid the amount to the appellant Actual date of credit of cheques in the bank a/c Amount reed Date of Cheque as per purchase deed of Telav land Cheque No Name of the seller to whom "A' paid purchase consideration Actual date of debit of cheque in the bank a/c Amount Paid TDS u/s 194IA Chaturbhai Ambalal Patel 89167 30/09/13 131101 Januben 31/10/13 100000 TDS u/s 194IA Jay Chaturbhai Patel 89167 30/09/13 131102 Rafiyuddin 31/10/13 100000 TDS u/s 194IA Hinal Chaturbhai Patel 89170 ....
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.... vital factor of fund flow wherein the sale proceeds received have been used .for purchase of purchase consideration can be seen beyond doubt. Thus, it is the respectful submission of the assessee that, the intent of the legislation needs to be taken into consideration objectively and harmoniously. In this regard Hon'ble Supreme Court in the case of Directorate of Enforcement vs Dipak Mahajan AIR 1994 (SC) 1775 has held that, it is permissible for the Courts to take into account the ostensible purpose or object and real legislative intent. A bare mechanical of the words devoid of concept of purpose will render the legislative intent inane. Further, the Hon'ble Apex Court has held that the Courts can by ascertaining legislative intent, place such construction on a statute as would advance its purpose and object. Where the words of statute are plain and unambiguous, effect must be given to them. The legislature may be safely presumed to have intended what the words plainly say. The plain words cam be departed from when reading then as they are leads to patent injustice, anomaly or absurdity or invalidation or a law [Bhaiji vs Sub-Divisional Officer (2003) 1 SCC 692, 700]. Als....
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....h Court in the case of Raj Bahadur Estates Pvt Ltd vs CCIT 337 ITR 425 has held that, it is well established that a statutory provision should be interpreted reasonably and not in manner that makes the provision absurd and unworkable." In view of above facts and explanation, it was not correct on the part of AO to reject the claim u/s.546, was submitted by the appellant. The fund flow analysis in chart above compounded with explanation by the appellant, clearly show the case for the appellant as the conditions for deduction u/s.54B, in my opinion, have been fulfilled. In other words, following points emerge from the discussion above: a) As per fund-flow analysis indicated in chart above, the funds arising from the sale of original agricultural land have been utilized to purchase the new agricultural land. Once has to see the substance of the matter and real character of the transaction as have been held in various case laws. b) The customs and traditions contained in the explanation by the appellant, is reality prevailing in rural economy which cannot be ignored in the decision making. c) Appellant's contention that the AO has not adversely c....
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....pellate authorities to entertain claim of the assessee in the course of appellate proceedings^ which the Assessing Officer denied on account of non filing of revised return. The ' appellant placed reliance on following case laws: (a) SNC Lalvin Acres Inc vs. ACIT 15 SOT 1 (Delhi) (b) Chicago Pneumatic India Ltd vs. DCIT 15 SOT 252 (Mumbai) and (c) Labh Construction & Industries Ltd. vs. ACIT in ITA No. 2486-2488/Ahd/2003 (Ahmedabad Bench A) I have carefully gone through the case laws (supra) and feel that the appellate * authorities have full power to entertain the claim which is valid in law and which was not even made before the AO as per ratio laid down by Hon'ble Bombay High Court's decision in the case of Pruthvi Brokers and Shareholders 349 ITR 336. The head note of the above judgement is reproduced hereunder for the sake of clarity: - "Section 251, read with section 254, of the Income-tax Act, 1961 - Commissioner (Appeals) - Powers of - Assessment year 2004-05 - Whether an assessee is entitled to raise before appellate authorities additional grounds in terms of additional claims not made in return filed by it ....
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....d during remand proceedings. Therefore, the deduction u/s.54B cannot be "solely denied as the same has not been claimed through revised return of income for impugned assessment year. The ground No.1 & 2 of appeal are allowed." 7. The claim of the assessee was that if the improvement cost was not allowable, alternatively, it should be allowed under section 54B of the Act, because the assessee has invested entire sale consideration on purchase of new agriculture land. This claim of the assessee was dismissed by the AO because registration of new agriculture land dated 2.11.2013 happened to be before the sale of original agriculture land for which sale deed has been registered on 13.1.2014, and even no such claim was made by the assessee by filing revised return. A perusal of the order extracted (supra), we find that the claim of the assessee was allowed by the Ld.CIT(A) on the ground that conditions for allowing such deduction under section 54B of the Act have been fulfilled by the assessee. Besides, that assessee made such claim even during the remand proceedings as well as a revised claim was made by the assessee before the AO. The Ld.CIT(A) observed that simply because the asse....
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....der the head 'income from other sources' under section 56(2)(vii)(b) of the Act. The Ld.AO issued a show cause notice dated 6.12.2016 to the assessee. In response to that, it was explained by the assessee that subsequently it was brought to the notice of the assessee that there was some encumbrance in the said property, and therefore in order to remove such encumbrance and get clear title, the assessee agreed to make an additional payment of Rs. 70.00 lakhs to one Smt.Subhnaben before 2022, for that an understanding to this effect was arrived between the parties. In support of this, the assessee filed an notarized documents dated 12.9.2013 and December, 2013 by which an amount of Rs. 70,00,000/- agreed to be paid to Subhanben Hajibhai by the assessee as compensation in the light of MOU entered on 5.1.2006. However, the Ld.AO did not accept this explanation of the assessee, and observed that since assessee has not furnished any details about the claim of the said Subhnaben on the said property, the claim of the assessee cannot be entertained, and therefore he made an addition of Rs. 77,86,500/- being the difference between the value adopted by the stamp valuation authority, and p....