TaxTMI 
TaxTMI 
TaxTMI 
2020 (4) TMI 395
X X X X Extracts X X X X
X X X X Extracts X X X X
....t. 4. The ld.CIT(A) as well as the Assessing Officer failed to provide sufficient opportunity to the Appellant company to put forth its case. 5. For these and other grounds that may be urged at the time of the hearing of the appeal, the appellant prays that the appeal may be allowed." 2. Briefly stated the facts of the case are that the assessee has claimed deduction u/s 54G of the I.T.Act at Rs. 1,20,00,000 stating that the assessee has invested the sale proceeds of transfer of capital asset invested in the development of industry as required u/s 54G of the Act by investing a sum of Rs. 1.20 crore. It was also stated by the assessee that it has deposited unused capital gain in his bank account with Canara Bank opened under the capital gains account scheme, from which amount was used for the development of the industry as per the provisions of section 54F of the Act. It was noticed by the Assessing Officer that for claiming deduction u/s 54G, the assessee has to furnish details with regard to purchase of new plant and machinery for setting up the business of the industrial undertaking in the new location. The A.O. was of the opinion that the assessee failed to establish with n....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e property under reference comprises of nonagricultural land and a RCC roofed building of about 900 sft of plinth area. From the description and location of the property it appears that the property under reference is a farmhouse of the owners Smt Namrata Mally and Mr. Suraj Shetty. (ii) From the description of the property there is absolutely no indication that it was meant for any industrial use. (iii) The property is owned by Smt Namrata Mally and Mr. Suraj Shetty and there is absolutely no evidence to indicate that any investment has been made by the appellant company in the said property. (iv) There is absolutely nothing to indicate that the appellant had installed any plant and machinery in the said property for the purpose of his business or has transferred the business establishment of his earlier undertaking to the new location. 7.3 Considering the above, it is clearly evident that there is nothing in the valuation report which would indicate that the appellant company has made any investments in a new asset as per the provisions of section 54G of the Income Tax Act. It is very relevant to note that the property under reference is neither owned by the appellant com....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed in this regard to explain the nature of expenses incurred by the appellant utilizing these funds. In this regard it is very relevant to note that just because money was withdrawn or transferred from the bank account of the appellant; it doesn't necessarily imply that the same amount has been utilized for incurring expenditure in connection with sifting of the industrial undertaking to the new location. The appellant has not furnished any corroborating evidence for having made any specific investments or for incurring any specific expenditure in this regard. Therefore, the claim of the appellant for having made an investment of Rs. 1,20,00,000/- as per the provisions of section54G of the Act remains completely unsubstantiated. 8. Considering the above facts it is very much evident that the conditions stipulated under section 54G of the Income Tax Act are not satisfied." The appellant has not furnished any evidence either before the assessing officer or during the appeal proceedings to establish the fact that it has made investments for setting up the industrial undertaking in the non-urban location. The only evidence furnished by the appellant is the copy of the valuation r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h Canara Bank showing the withdrawals of Rs. 30 lakh and Rs. 70 lakh on 26.09.2011 from the said bank account. According to the Income Tax Authorities the said amount has been transferred to the account of Sri. N.C.Shetty and Sri.Suraj Shetty and no other information has been furnished to the Revenue to show that the end utilization of this amount. The assessee has only furnished one valuation report dated 15.03.2014 valuing the land and building at Rs. 1.30 crore given by M/s.Prasad & Prasad Associates in respect of propriety situated at No.121, Hadonahally village, Doddabalapur Taluk, Bangalore rural district. The said property consists of 21 guntas of nonagricultural land in survey No.121, Hadonahally village along with a RCC roof building and 900 sft. of plinth area. The said property stated to be belonging to Smt.Namrata Mally and Mr.Suraj Shetty, daughter and son of Sri.N.C.Shetty. The property was valued at Rs. 1.30 crore. If no efforts were made by the lower authorities to see whether this property was reflected in the assessee's balance sheet as on 15.03.2014 and the lower authorities not carried out necessary inquiry regarding the transfer of funds from Canara Bank accoun....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s are used for acquiring any other land or building or any rights therein or constructing any building for the purposes of shifting or re-establishing the said undertaking or setting up another industrial undertaking. Section 54D mandates that, for the capital gains to exempt, the new land or building or rights therein acquired, have to be used only for either shifting or reestablishing or establishing an industrial undertaking (and no other purpose). In contrast, section 54G of the Act permits the use of capital gains for acquiring land or building or constructing building for the purposes of (any) business in the non-urban area. 12. "For the purpose of business" was interpreted by the Hon'ble Bombay High Court in the case of Krishna Sahakari Sakhar Karkhana Ltd v. CIT 229 ITR 577:- "The expression "for the purpose of the business" is wider in scope than the expression "for the purpose of earning profits". Its range is wide: It may take in not only the day to day running of a business but also the rationalization of its administration and modernization of its machinery; it may include measures for the preservation of the business and for the protection of its assets and ....