TaxTMI 
TaxTMI 
2021 (12) TMI 689
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....tion although said order is neither erroneous nor prejudicial to the interest of revenue. 2. It is therefore prayed that order passed by Pr. Commissioner of Income-tax u/s 263 of the I.T. Act setting aside the order of assessing officer and directing assessing officer to make fresh investigations with regard to claim of deduction u/s 54B of the Act may please be quashed." 2. The relevant material facts, as culled out from the material on record, are as follows. The assessee before us is an individual and has filed his return of income for the assessment year 2013-14 on 31/07/2013, declaring total income at Rs. 7,70,930/-. The assessee is a salaried person and has earned salary income and interest income from fixed deposits during the year under consideration. The total income of the assessee has been assessed, by assessing officer, vide order u/s 143(3) of the Act, dated 11/03/2016 at Rs. 41,46,100/-. 3. Later, Learned Principal Commissioner of Income Tax, [ in short "ld PCIT"], has exercised his jurisdiction under section 263 of the Income Tax Act, 1961. The ld PCIT, on examination of assessment records, noticed that assessee had sold an agriculture land at Rs. 2,46....
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....assessee & the claim is allowed after verification & application of mind. Consequently, there is no error in allowing the deduction claimed by the assessee u/s 54B of the I.T Act. 3. Moreover, on perusal of both sale deeds it is quite evident that assessee has received full sale consideration from 08.08.2011 to 20.03.2012 and the same fund is used for making investment in new agricultural land as payment for purchase of new land is made from 15.03.2012 to 10.04,2012 out of sale consideration received towards sale of impugned land. It is relevant to mention here that the intention of legislature is to give deduction when sale proceeds of agricultural land are invested in purchase of another agricultural land and hence, all the conditions are satisfied even otherwise also. Therefore, the deduction claimed by the assessee is correct & the same is not prejudicial to the interest of revenue. 4. In support of the contention that deduction is available under the above facts, reliance is placed on ITAT Pune bench decision in the case of Ramesh N Jakhadi v. ITO-41 ITD 368 (Pune). In this case law, reliance has been placed on CBDT circular no. 359 dated 10/05/1983 issued in....
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....tely preceding the date on which the transfer took place, was being used by the assessee being an individual or his parent, or a Hindu undivided family for agricultural purposes (hereinafter referred to as the original asset), and the assessee has, within a period of two years after that date, purchased any other land for being used for agricultural purposes, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say:- (i) If the amount of the capital gain is greater than the cost of the land so purchased (hereinafter referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be nil; or (ii) If the amount of the capitals gain is equal to or less than the cost of the new asset, the capital gain shall not be charge....
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.... contended that the transaction made by the assessee is genuine, as the assessee has received part payment in the financial year 2011-12. The Ld. Counsel further took us through paper book page 122, wherein the bank statement of the assessee shows part payment received by the assessee in advance against sale of agricultural land and amount invested in purchasing another agricultural land are also getting reflected. The said bank statement shows some part payment received in financial year 2011-12 and some part payment in financial year 2012-13. Therefore ld. Counsel claims that during the assessment stage, the assessee has submitted the details as required by the Assessing Officer and Assessing Officer has examined the issue and applied his mind, therefore the order passed by the Assessing Officer is neither erroneous nor prejudicial to the interest of Revenue, hence the order passed by the ld PCIT under section 263 of the Act may be quashed. 9. On the other hand, Shri Ritesh Mishra, Ld. CIT-DR for the Revenue has relied on para no. 4 and 5 of the order passed by the Ld. PCIT under section 263 of the Act, which we have already noted in para no.5 of this order, hence the same is ....
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.... for the property sold during the year under consideration are enclosed herewith in "Annexure: 4." 12. Therefore, we note that during the assessment stage, the Assessing Officer raised the specific query, and the assessee has submitted its reply along with documentary evidences, which is placed at paper book page no.127. The assessing officer has examined these documents relating to land and exemption under section 54B of the Act, and thereafter framed the assessment order under section 143(3) of the Act, hence order passed by the Assessing Officer should not be erroneous. 13. The contention of the ld. PCIT that sale deed in writing was executed on 20.03.2012, therefore capital gain should be assessable in the A.Y.2012-13 instead of A.Y.2013-14. We note that in assessee's case, no doubt, the sale deed in writing was executed on 20.03.2012 and part payment of the land so sold by assessee, was received by the assessee, in the Financial Year 2011-12, which is placed at paper book page no.57. The part payment so received by assessee, was utilized by him to purchase the another agricultural land on 20.04.2012. Therefore, the assessee purchased another agricultural land out of the ....
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....ed 28.11.2008 was passed. 9 Further, at the hearing Mr. Vimal Gupta contended that Respondent No.1 while passing the order of the assessment dated 28.11.2008 did not apply his mind and/or consider the fact that Rs. 90.84 lacs had been invested in terms of Section 54EC prior to the completion of sale. The basis of his aforesaid submission is that the same is not discussed in the order dated 28.11.2008. This ground urged by Mr. Gupta during the hearing is a new ground which does not find mention in the reasons recorded for reopening of assessment. As held by this Court in the matter of Hindustan Lever Ltd. v. R.B. Wadkar reported in 268 ITR page 332, it is not open to improve upon the reasons recorded at the time of reopening the assessment by filing an affidavit and/or making oral submissions at the hearing of the Petition. The Court very categorically held that the reasons recorded must clearly establish some facts or material which lead to escapement of income. In any view of the matter the SNC 15 WP 10437-11(final).doc aforesaid submission is not sustainable for the reason that if a query is raised during assessment proceedings and the assessee meets the query and/or sup....
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.... effect that only because in the assessment order, detailed reasons have not been recorded an analysis of the materials on the record by itself may justify the Assessing Officer to initiate a proceeding under Section 147 of the Act. The said submission is fallacious. An order of assessment can be passed either in terms of sub section (1)of section 143 or sub-section (3) of section 143. When a regular order of assessment is passed in terms of the said sub-section (3) of section 143 a presumption can be raised that such an order has been passed on application of mind. It is well known that a SNC 17 WP 10437-11(final).doc presumption can also be raised to the effect that in terms of clause (e) of section 114 of the Indian Evidence Act judicial and official acts have been regularly performed. If it be held that an order which has been passed purportedly without application of mind would itself confer jurisdiction upon the Assessing Officer to reopen the proceeding without anything further, the same would amount to giving a premium to an authority exercising quasi judicial function to take benefit of its own wrong". 11.One more point very strenuously urged by Mr. Gupta for the ....
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.... execution of the sale deed as the investment cannot be regarded as having been made within a period of six months after the date of transfer. 2. On consideration of the matter in consultation with the Ministry of Law, it is felt that the foregoing interpretation would go against the purpose and spirit of the section. As the section contemplates ITA No.2767/Ahd/2016 - 15 - investment of the net consideration in specified assets for a minimum period and as earnest money or advance is a part of the sale consideration, the Board have decided that if the assessee invests the earnest money or the advance received in specified assets before the date of transfer of asset, the amount so invested will qualify for exemption under section 54E. 21. Considering the above circular, we allow this ground of appeal and direct the AO to grant exemption under section 54EC of the Act. Ground no.3 is allowed." 17. Therefore, taking into account the ratio laid down in the above cited precedents, we note that in assessee`s case under consideration, the assessee has received part payment in advance in the financial year 2011-12, and the said part payment so received ....