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TaxTMI 
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TaxTMI 
2023 (1) TMI 36
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....CIT(A) grossly erred by confirming an addition in respect of valuation without rebutting argument advanced during appellate proceeding. 4. On the facts and in the circumstances of the case and in law the Ld. CIT(A) grossly erred by not allowing the indexed cost of acquisition of Rs. 2,45,34,955/- (as per valuation report from registered valuer) and thereby disallowing appellant claim by Rs. 1,32,75,147/- (24534955-11259808). 5. On the facts and in the circumstances of the case and in law the learned CIT(A) grossly erred by not considering facts of the case holistically and confirmed the disallowance in respect of deduction U/s 54B of Income Tax Act to the tune of Rs. 8127603/-. 6. On the facts and in the circumstances of the case and in law the learned CIT(A) grossly erred by treating agriculture income of Rs. 312400/-. 7. The appellant craves leave to add, alter or withdraw any of the grounds of appeal." 2. Brief facts of the case are that the assessee is an individual and derived income from long term capital gain and agricultural income, filed his return of income for the A.Y. 2012-13 on 15/02/2014 declaring income of Rs. 70,72,270/-. The case was selected for scrutiny.....
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....bsp; Indexed cost of improvement --- Long term capital gain Rs. 4,01,45,040/- (ii) R.S. No. 177, Block No. 167, Village Valak, Tal: Kamrej Full value of the consideration: Rs. 45,04,560/- Less: Expenditure on transfer --- Indexed cost of acquisition --- Indexed cost of improvement --- Long term capital gain Rs. 45,04,560/- The total long term capital gain worked out to Rs. 4,46,49,600/- (Rs. 4,01,45,040/- + Rs. 45,04,560/-) and the assessee has already offered long term capital gain of Rs. 70,50,196/-. Therefore, Rs. 3,75,99,404/- (Rs. 4,46,49,600 -Rs. 70,50,196/-) is treated as income from long term capital gain." 4. The Assessing Officer further noted that the assessee has shown agricultural income of Rs. 3,12,400/- while computing the total income. The assessee was asked to furnish the evidence of land holding and the activities carried out for earning such agricultural income. The Assessing Officer noted that no reply was furnished nor any evidence was given by Assessing Officer. Therefore, the agricultural income was treated as income from undisclosed s....
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....tated that the provisions of Section 55A(a) has been amended w.e.f. 01/07/2012, which provides that the Assessing Officer can refer the matter to the DVO if value claimed by assessee as per estimate made by registered valuer is at variance with its fair market value in the opinion of Assessing Officer. The amended provisions are applicable from 01/07/2012 and considering the nature and transaction of which the provisions applied it can be said that the same is applicable from financial year 2012-13 onwards. The assessee has sold property prior to amendment. The assessee also relied on decision of Tribunal in ACIT Vs. Shri Dilip Shoorji ITA No. 5987/Mum/2013 dated 12/07/2017. 7. On the disallowance of cost of improvement, the assessee stated that during the assessment, the assessee was asked to furnish relevant evidence. The Assessing Officer in assessment order noted that the assessee failed to submit evidence in absence of any evidence, the Assessing Officer disallowed the cost of improvement. The assessee stated that major payments were made to the government authorities for converting use of land for non-agricultural purpose. The amount of Rs. 20.00 lacs were paid vide Demand D....
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....and the details of land used for agricultural purposes in two years immediately preceeding the date on which the transfer took place to justify the claim under Section 54B of the Act. The assessee failed to furnish relevant document, therefore, in absence of explanation, deduction was disallowed. On the issue of valuation of both the assets sold by assessee, the Assessing Officer reported that the assessment order was passed on 20/03/2015 subject to modification/rectification in the assessment order on the receipt of valuation report. The Assessing Officer after referring the various evidences with regard to deduction under Section 54B, held that during the remand report, Talati-cum-Mantri was asked to attend his office to prove the authenticity of the certificate issued by him on 07/04/2015 alongiwth witness mentioned on the certificate. Who was examined? Statement of Talati was recorded on 24/03/2017. The Assessing Officer without recording the contents of statement, reported that the report of Talati-cum-Mantri is factually incorrect. The summon to Manager of Shree Kamrej Vibhag Fruit & Vegi Growers Ltd. was also issued, who attended the office of Assessing Officer on 24/03/2017....
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....round of appeal raised by the assessee was rejected. 13. On the issue of cost of improvement of Rs. 49.36 lacs, the ld. CIT(A) on the basis of report of DVO about the confirmation of charges paid to SUDA, allowed deduction of Rs. 20.00 lacs out of Rs. 30.00 lacs and on the submission of assessee that there is supporting evidence for remaining balance of Rs. 29.36 lacs, the ld. CIT(A) granted partial relief to the assessee. 14. On the claim of deduction under Section 54B of Rs. 81,27,603/-, the ld. CIT(A) noted that the assessee sold original land on 08/03/2016 and purchased new agricultural land and claimed deduction. The Assessing Officer disallowed deduction on the ground that the asset sold is not agricultural land. No other violation was found out by the Assessing officer. The ld. CIT(A) recorded that the assessee has received sale consideration from 25/03/2011. The land was converted into non-agricultural land by the District Collector vide order dated 11/01/2011 on which the assessee received RS. 1.10 crore. The evidence filed by the assessee shows that the assessee was cultivating fruits and vegetables. However, Form No. 7/12 for years 2010-11 and 2011-12 it is shown as 'P....
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....atter to the DVO. The assessee further stated that reference to DVO cannot be made under Section 55A for A.Y. 2012-13, unless the Assessing Officer was of the view that the fair market value claimed by assessee on valuation report is on lower side and therefore, no addition on the basis of DVO report can be made to the tune of Rs. 1.32 crore. The assessee has sold land prior to 01/07/2012, therefore, the amended provision substituted in clause (a) of Section 55A wherein "is less than is fair market value" was substituted with the words "is no variance" with its fair market value was inserted. The assessee has also stated that the Assessing Officer cannot assume jurisdiction for referring the matter to DVO unless, he is of the opinion that the fair market value of land determined by the registered valuer is less than fair market value, thus the reference made to DVO was without jurisdiction. The assessee has also relied on various case laws as under: (i) CIT Vs Gauragiben S Shodhna (2014) 108 DTR 442 (Guj) (ii) CIT Vs Puja Prints (2014) 360 ITR 697 (Bom) (iii) CIT Vs Daulal Mohta (HUF) (2014) 360 ITR 680 (Bom) (iv) Pradeep G Vora 58 taxmann.com 110 (Mum Trib)/(2015) 154 ITD ....
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....o non-agricultural. Before the lower authorities, the assessee vehemently submitted that for claiming such deduction, the addition is that the land was being used for agricultural purposes prior to two years of its sale. The assessee furnished the land record to substantiate such contention. The Assessing officer in his conclusion accepted that the certificate from cooperative societ4y is in consonance with the claim of assessee. Remand report of Assessing Officer also accept the same fact. The ld. CIT(A) despite accepting such fact, confirmed the disallowance under Section 54 of the Act. The assessee stated in its written submission that the Talati certified that the agricultural activities were carried out on the subject land. Such certificate was not accepted by the Assessing Officer. The Assessing Officer reported that in question No. 3 asked to Talati, he confirmed that the said certificate was issued by his predecessor in presence of three witnesses. No adverse remark was made by Assessing Officer. The ld. CIT(A) also noted in his finding that no agricultural income was declared by assessee in two financial years. The assessee had submitted that he was having only agricultura....
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....al purposes. 24. Ground No. 6 of the appeal relates to treatment of agricultural income as income from unexplained sources. The assessee in its submission submitted that during the remand proceedings, the Manager of Cooperative society admitted that the assessee sold agricultural produce during preceeding two assessment years. The ld. CIT(A) also accepted that the agricultural activities were carried out by the assessee. The assessee has furnished complete details of agricultural activities during the appellate stage to substantiate the agricultural income. 25. On the other hand, the ld. CIT-DR for the revenue supported the orders of lower authorities. The ld. CIT-DR submits that the assessee was not shown any agricultural activities in preceeding years. 26. We have considered the submission of ld. CIT-DR and the written submission of assessee and have also gone through the orders of the lower authorities carefully. We find that the Assessing Officer treated the agricultural income as income from undisclosed sources by taking a view that no details or evidence was furnished by the assessee. We find that before the ld. CIT(A), the assessee specifically stated that he was not havi....