TaxTMI 
TaxTMI 
TaxTMI 
2021 (5) TMI 320
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....ence, the grounds as well as the facts narrated in ITA No.566/SRT/2019 for Assessment Year 2012-13, have been taken into consideration for deciding the above appeals en masse. 3. Grounds of appeal raised by the assessee as per lead case in ITA No.566/SRT/2019 for AY.2012-13 are as follows: "1. Ld. CIT(A) has erred in law and on facts in confirming AO's decision to treat assessee's agriculture land bearing RS No. 12/1, B/ 17A located at village Navagam. Tal. Kamrej, Dist. Surat as non-agriculture land (Capital Asset) ignoring the fact that it is located outside SMC limit and was exclusively used for agriculture purpose prior to its sale. 2. Ld. CIT(A) has erred in law and on facts to upheld AO's disallowance u/s 54B for Rs. 1,73,48,462/- overlooking the fact that the assessee has made actual investment for purchase of another agricultural land which are supported by evidences and there is nothing contrary with the AO/CIT(A) to disbelieve assessee's investment in agriculture land." 4. Facts of the case which can be stated quite shortly are as follows: The assessee, before us, is an individual and he filed his return of income for Assessment Year 2012-13 on 03.03.2014 de....
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....on in respect of the land sold by the assessee from Sub-Registrar, Kamrej, Surat and found that the value adopted by the stamp duty valuation authority is Rs. 6,31,87,500/- whereas the value shown in the sale deed is Rs. 4,41,00,000/- only and thereby section 50C of the Income Tax Act 1961 is attracted in the case of the assessee. In view of the above findings, the assessing officer has issued a detailed show cause notice to the assessee, vide letter dated 13.03.2015, which is reproduced below: "Please refer to this office show cause letter dated 19.2.2015 on the above subject. In this connection, you hereby requested to clarify your claim in the light of the following: Sale consideration of land Rs. 4,41,00,000 as per sale deed and being ½ share Rs. 2,20,50,000 You have shown Rs. 2,18,50,000 being your share. Please explain. Sale consideration as per Stamp Duty Valuation Rs. 6,31,87,500 You have shown less value by Rs. 1,90,87,500. Therefore 50-C is attracted in your case at Rs. 95,43,750/-. (being one half share) You have claim deduction u/s.54F & 54B as under: Purchase of land Amount claimed by you Actual amount as per deed furnished by you/obtained from....
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.... assessee has sold agriculture land which is subject to permission u/s 63 of the state civil laws. Under these circumstances, sale proceeds of the land is Rs. 4,41,00,000/- and not Rs. 6,31,87,500/-. Therefore, addition u/s 50C is not warranted under the law. In para 3 of your show cause notice you have tabulated figures of assessee's claim u/s 54B for investment in agriculture land. So far as investment for block 688/701, 690/709, 706/705-708 and 704/709, there is no dispute and such claim is duly accepted. So far as investment in purchase of agriculture land bearing Block No.687/101 at village Karjan, Dist. Surat, the cost of investment is Rs. 88,00,786/- as declared in notary registered Satakhat. Further source of investment is also explained before you during assessment proceedings. It is also explained that entire investment was made out of sale proceeds of agricultural land for which LTCG is offered. In addition to all these a sworn affidavit of seller of the land, confirming receipts of Rs. 88,00,786 being sale consideration by them is also brought on record. Therefore, deduction u/s.54B is requested to be allowed at Rs. 88,00,786/- for Block No.687/101 at village Karj....
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....annot be exclusively fixed for any land. Therefore, the claim of the assessee that the determination of value of property by stamp duty valuation officer is for non-agricultural land and not for agriculture land does not make any sense. The Jantri rates are already fixed. The same is not fixed at the time of sale or purchase. Regarding sale of agriculture land to a non-agriculturist, the condition is stipulated that permission u/s 63 of State Civil law is a requirement in such situation. This is common for each and every such sale or purchase transactions. The assessing officer also noted that when the assessee himself is getting the non-agriculture land, then of course he will sell the land as Non- Agricultural land only and not agriculture land as claimed by the assessee. The assessee himself has submitted that he has first got approval of the Collector u/s 63 and then the sale deed was registered. If that was the case then the assessee is not at all entitled to get the benefit of 54B of the Act as he has sold Non Agricultural land. The transaction of sale is final only when the sale deed is registered. In view of the above, the claim of the assessee was not accepted by the ass....
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....ld CIT(A) is not acceptable, because the assessee, right from the beginning, is an agriculturalist, his source of income is only agriculture. He is residing at village Navagam of Dist. Surat, the population of the village Navagam is less than 10000, therefore such land can not be a capital asset. He has sold agricultural land located outside SMC limits, during the year under the appeal. Following evidences are available on record with respect to status of the land being agriculture: No. Evidence Page No. of Paper book 1 Purchase Deed dated 27-06-2000 -48- to -64- 2 Revenue Record in form 7 & 12 -65- & -66- 3 Agreement to sale -67- to -81- 4 Order of DY. Collector. Kamrej Division Surat dated 26-03-2012 -82- to -90- 5 Copy of sale deed dated 3 1-03-2012 91- to -148- The assessee was cultivating the land up to the date of sale. He has not obtained any permission to make use of land for non-agriculture purpose. There is no nonagriculture activities carried out upon the same land till the date of sale. Even as on today also there is no non-agricultural activities have been carried out by the buyers of the land. Surrounding lands are agriculture land. The AO has acc....
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....along with the documents furnished and the case laws relied upon, and perused the facts of the case including the findings of the ld. CIT(A) and other material brought on record. We note that assessee and his mother are the co-owners of agricultural Land R. No 12/1, Block no17/A, village Navagam, Tal: Kamrej. Dist Surat. They entered into notarized agreement to sell the impugned land on 23.01.2012 for sale consideration of Rs. 4,41,00,000/-.This agreement gives schedule of payment in page 4 and 5. As per this schedule, and para 3 of the agreement, an amount Rs. 51,00,000/- has been received on date of agreement, out of which Rs. 48,00,000/- is by way of cheques drawn on Bank, Ring Road Branch Surat. On verification of bank account of Suresh D Patel in Bank of Baroda reveals that the cheques are encashed on 27.01.2012 up to Rs. 18 lacs and in bank account of Smt. Kankuben D Patel in Axis Bank on 27.01.2012 up to 30 lacs. The same payments are endorsed in the Registered Sale deed executed on 31.03.2012. (page no. 38-41) The agreement in para 4 (page 6) stipulates that the necessary permission under section 63 of Land Revenue Act to be obtained before executing sale deed as the purcha....
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....s escaped assessment within the meaning of section 147 of the I.T. Act. Hence, after recording the reason for reopening of the case, a notice u/s 148 of the I.T. Act was issued on 07.03.2015 and served upon the assessee for filing the return for A.Y. 2012-13 in response of the notice u/s. 148 of the Act. In response to the notice u/s. 148 of the IT Act the assessee has submitted copy of return of income on 24.02.2016 which was filed on 03.03.2014. 2. In response to the above notices, Shri Rajesh Upadhyay CA, AR of the assessee, attended and furnished the details as called for from time to time. The details furnished were verified and kept on record. The case was discussed with him. 3. During the course of assessment proceedings it is noticed that the assessee has sold an agricultural land during the year under consideration for sale consideration of Rs. 4,41,00,00/- and claimed deduction u/s.54F & 54B of the Act to the tune of Rs. 1,97,00,898/-. The assessee was therefore issued a show cause to furnish the details of such claim as copy of purchase and sale deed, payment details etc. 4. The assessee has furnished the following reply in response to the above show cause notice: ....
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....54B of the Act treating the said land as an agricultural land. Therefore, the Department in the case of one of co-owners of the said land, who is having one half share of the total land, has treated the subject land as an agriculture land and allowed the deduction under section 54B of the Act. To maintain the consistency, the department should also treat the said land as an agricultural land in the hands of the assessee under consideration. However, we note that the Assessing Officer has treated the said land as an agricultural land but at the same time he made addition under section 50C of the Act in the case of Late Smt. Kankuben Dulahbhai Patel ( one of the co-owners, -assessee`s mother). 16. Now we shall address the main grievance of ld DR for the Revenue. The ld DR pointed out that when the provisions of section 2(14) clearly says that if any agricultural land is situated in any area within eight kilometers from the local limits of any municipality, and population of such area is more than 10,000, in that situation, the said agricultural land would be capital asset and therefore assessee has to pay capital gain tax. We note that during the course of assessment proceedings, t....
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....e of land was fixed at lump sum price and not on the basis of per sq. yard/metre. The aforesaid facts could not be controverted by the Revenue by bringing any contrary material on record. 6.1. In the case of Madhabhai H.Patel vs. CIT (supra), the Hon'ble Gujarat High Court has held as under:- "What is required to be considered is: Was it agricultural land, when it was sold ? If the land is recorded as agricultural land in the revenue records and if till the date of its sale it is used and exploited as agricultural land, and if the owner of the land had not taken any step, which would indicate his intention to exploit the land thereafter as non-agricultural land, then such a piece of land will have to be regarded as agricultural even though it is included within the municipal limits or that it is sold on per square yard basis and not acreage basis. The purpose for which such a land is sold, though relevant, will not have that much importance and weight as it would have in a case where the land has remained Padatar or idle or is used for the agricultural purpose only by way of stop-gap arrangement. So far as the facts of this case are concerned, there is no dispute that the lan....
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.....2002-03, held as follows: "8. We have heard the rival contentions and perused the facts of the case. We are convinced with the arguments made by the learned counsel for the assessee, Mr. Joginder Singh, CA that at PB-2, a letter issued by Senior Town Planner, Jammu dt. 23rd Dec., 2008 is evident in itself that the land in question does not fall within the territorial jurisdiction of Municipal Corporation or Corporation area as at 15th Feb., 2002 which is the relevant date and point 'c' in the said letter, cannot be made applicable to the present facts and circumstances of the case and therefore, not applicable, as argued by the learned Departmental Representative. Accordingly, the land being outside the jurisdiction of Municipal Corporation, Jammu and therefore, cannot be treated as capital asset under s. 2(14)(iii)(a) or (iii)(b) of the Act. In the facts and circumstances, the order of the learned CIT(A), as reproduced hereinabove, is well reasoned one and we find no infirmity in his order, who has rightly deleted the addition so made by the AO. Thus, all the grounds of the Revenue are dismissed." 19. From the above facts of the assessee under consideration, we note ....
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....case of Suresh D Patel Pertains to disallowance of deduction u/s 54B Rs. 1,73,48,462. It can be seen that Ld AO has made disallowance of deduction claimed u/s.54B for only one reason being the new agricultural land purchases are not registered. The assessee claims to have paid Rs. 1,82,01,572/- for purchase of agricultural lands on the basis two agreements to sale (satakhat). However, the Ld. AO found that only Rs. 8 lacs have been paid by way of cheque. The assessee claimed to have paid the balance in cash, he filed confirmation of payee in form of affidavits in support of his claim. The Ld. AO has allowed deduction u/s.54B to extent of payment made by way of cheque and disallowed the rest. On examination of details on record, I do not find merit in claim of assessee as the payments in cash are not verifiable. Hence the action of Ld. AO is sustained. This ground of appeal is hereby dismissed." 22. Therefore, we note that both the lower authorities did not deny the claim of the assessee under section 54B of the Act, they have allowed the deduction partly. The ld Counsel for the assessee submitted that Ld. CIT(A) erred in law and on facts to upheld AO's disallowance u/s 54....