TaxTMI 
TaxTMI 
2022 (1) TMI 406
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....dated 30.08.2016 arising in the assessment order dated 30.03.2015 passed by the Assessing Officer (AO) under s. 143(3) r.w.s. 147 of the Income Tax Act, 1961 (the Act) concerning AY 2010-11. 2. The appeal of Revenue and cross objection of assessee emanates from common issue and thus disposed off together. 3. To begin with, we shall take up Revenue appeal for adjudication purposes. ITA No. 2833/Ahd/2016 (Assessee's appeal) 4. As per its grounds of appeal, the Revenue has challenged the action of the CIT(A) in reversing the action of the AO on withdrawal of exemption under s.54B of the Act on sale of agricultural land and chargeability of capital gains on sale of freshly acquired land. 5. Briefly stated, the assessee company filed its re....
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....o not arise in any manner. Consequently, in the absence of any chargeable capital gains, Section 54B of the Act would not apply. The CIT(A) found substantial merit in the plea raised on behalf of the assessee for non-chargeability of capital gains. The CIT(A) also found merit in the alternate contention of the assessee for eligibility of exemption under s.54B of the Act. The relevant operative para of the order of the CIT(A) is reproduced hereunder: " 3.1. I have gone through the facts mentioned in the assessment order and the submission filed by the appellant carefully. The case of the appellant was re- opened under 147 rws 148 of the Act with the reason recorded that why the capital gain tax of Rs. 1,73,19,910/- in respect of Agro Land ....
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.... the previous year; and for the purpose of computing in reaped of the new asset any capital gain arising from its transfer within a period of three years of UK purchase, the cost shall be nil; or The appellant has clearly stated that the provision of section 54B(1)(i) is only applicable in case of a capital asset and as the Rural agricultural land situated at village Sachana is not a capita! asset and hence the provision of section 54B(1)(i) would not apply. Further, section 45 is the charging section and section 48 is the section for computation of capital gain and both provisions are integrated with each other. As the rural agricultural land situated at Village Sachana is not a capital asset as per the definition of section 2 (14)(iii) ....
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....ation received on sale of rural agricultural land at Sachana is exempt as it is not a capital asset, even if the provisions of section 54 B(1)(i) is applied and the cost of the asset is treated as Nil, it is having no tax impact in the case of the appellant. 3.4. I agree with the appellant that the Rural Agricultural Land situated at Village Sachana is not a capital asset as per provisions of section 2(14)(iii) r. w. s 45 and the sales consideration is exempt. Further, as per the decision of Hon' ble Apex Court in the case of CIT vs. B. C. Srinivasa Setty reported in 128 ITR 294 which is squarely covered to the facts of the case of appellant that section 45 charging section would fail as the Rural Agricultural Land situated at Village....
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....achana, Viramgam (new asset) and claimed deduction of Rs. 1,37,74,997/- being cost of purchase of agricultural land in A.Y. 2009-10 out of capital gains of Rs. 2,70,88,834/-. It was noticed by the AO that the aforesaid agricultural land at Sachana (new asset) have been sold at a consideration of Rs. 1,82,30,683/- within 14 months on 22.02.2010 in F.Y. 2009-10 relevant to A.Y. 2010-11 in question. The share of consideration (95%) attributable to assessee stands at Rs. 1,73,19,120/-. In these facts, the AO had disputed the eligibility of claim of deduction under s.54B of the Act in the earlier year on the ground that the assessee had sold the land parcels at Sachana (new asset) without holding it for three years from the date of purchase in v....