TaxTMI 
TaxTMI 
TaxTMI 
2023 (4) TMI 803
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....es of the case as well as law on the subject, the ld. Pr.CIT has erred in observing that order passed by assessing officer u/s 143(3) of the Act is erroneous as deductions claimed by assessee u/s 54B & 54F of the Act is not allowable. 3. It is, therefore, prayed that order passed by Pr.CIT u/s 263 of the I.T. Act setting aside the order of assessing officer and directing assessing officer to make fresh investigations on deductions claimed by assessee may please be quashed. 4. Appellant craves leave to add, alter or delete any ground(s) either before or in the course of hearing of the appeal." 2. Brief facts of the case are that the assessee is an individual, filed her return of income for the A.Y. 2016-17 on 31/03/2018 declaring income of Rs. 27,72,370/-. The case of assessee was selected for scrutiny under Computer Audited Scrutiny Selection (CASS) for examination of deduction/exemption of capital gain, capital gain/loss on sale of property and investment in immovable property. The assessment was completed by the Assessing Officer in accepting the returned income vide assessment order dated 15/12/2018 passed under Section 143(3) of the Act. The Assessing Officer while pass....
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.... agriculture land, and that such deduction is available only, if the assessee purchased agricultural land within two years after transfer of agricultural land from which capital gain arise. The assessee purchased three pieces of land before transferring of land on which the capital gain earned, therefore, deduction claimed on three pieces of land aggregating to Rs. 15,52,740/- was required to be disallowed. The ld. Pr. CIT was of the view that assessment order was passed without making proper enquiry, non-application of mind coupled with non-verification of details of property, which makes the assessment order erroneous and prejudicial to the interest of revenue, which required revision. 4. The assessee filed his reply dated 25/03/2021. On the deduction claimed under Section 54B, the assessee submitted that she sold agricultural land at Block No. 49, Saroli, Choryasi, Surat for a consideration of Rs. 2.25 crores (as her part). The part of the consideration was received by assessee on 14/10/2014 by way of cheque No. 118 of Rs. 25.00 lacs. Such part of consideration was used for purchase of agricultural lands on 18/10/2014 and 19/11/2014. Cheque No. 271188 of Rs. 1,05,735/- was paid....
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.... or the amount is invested within a period of three years to construct new residential house in India. All three major conditions are satisfied in her case. 6. The reply of assessee was not accepted by the ld. Pr.CIT. On the issue of deduction under Section 54B, the ld. Pr.CIT concluded that the deduction under Section 54B is available only, if the assessee purchased agricultural land within two years after transfer of agricultural land from which capital gain arise. The contention of assessee that she purchased new agricultural land before sale of original asset in order to retain her name in Government record as agriculturist, otherwise she would not have been able to buy agricultural land in State of Gujarat. Such contention of assessee is devoid of merit in view of specific provision of Section 54B. On the issue of deduction under Section 54F, the ld. Pr.CIT noted that the assessee furnished copy of construction agreement with one Shri Rameshbhai Ramsinghbhai Prajapati. Ongoing through such construction agreement, first party is Shri Aakash Fakirbhai Patel and amount of construction work was Rs. 88.00 lacs. In the balance sheet of assessee as on 31/03/2015, the value of house ....
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..... Further, investment of Rs. 1.05 crores made in construction of house plus Rs. 2.50 lacs as site supervision and consultation fees, details of Rs. 85,000/- of kitchen equipment and Rs. 71,000/- in solar equipment and furniture fitting of Rs. 7,66,971/- aggregating of Rs. 1.17 crores were furnished. The assessee also furnished construction agreement and purchase deed of said house. Copy of notice of Assessing Officer and reply of assessee is filed on record. The ld AR for the assessee submits that assessing officer on verification of facts and examination of all the documents accepted the claim of assessee on deduction under Section 54B as well as under Section 54F of the Act. The ld. AR of the assessee submits that the Assessing Officer examined both the issues thoroughly and took reasonable plausible and legally sustainable view. The Assessing Officer in the assessment order in para 3 of assessment order has recorded certain facts about the examination of such issue. The Assessing Officer only disallowed Rs. 20.00 lacs from taxable capital gain which clearly shows that the Assessing Officer applied his mind on the issue and passed the assessment order. If the ld. Pr.CIT is not ag....
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....f the Act, the ld. AR of the assessee relied upon the decision of Hon'ble Madras High Court in CIT Vs. P.V. Narasimhan (1989) 47 Taxman 89 (Mad), Gujarat High Court in CIT Vs Kodandas Chanchlomal (1985) 23 Taxman 579 (Guj), Hyderabad Tribunal in Ms. Juveria Begum & Ors Vs ITO in ITA No. 2224/Hyd/2018, 297, 298 & 340/Hyd/2019 order dated 04/09/2020 and Chennai Tribunal in B. Sivasubramanian Vs ITO (2014) 45 taxmann.com 74 (Chennai-Trib). 10. On the other hand, the ld. CIT-DR for the revenue supported the order of ld. Pr.CIT. On the issue of deduction under Section 54B of the Act, the ld. CIT-DR for the revenue submits that language of Section 54B is clear and unambiguous. The deduction under Section 54B of the Act is only available after transfer of agriculture land by assessee. On the issue of deduction under Section 54F of the Act, the ld. CIT-DR for the revenue submits that on page No. 3 of impugned order, the ld. Pr.CIT clearly held that the assessee claimed deduction merely on the basis of agreement. The assessee again claimed such deduction on renovation of house owned by assessee. If it a renovation or construction, it is not clear from the reply of the assessee before the l....
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....ughout the proceedings was that she invested the part of capital gain in reconstruction of her old house. The ld Pr CIT at the time of revision observed that there is no sanction plan from the Municipal Committee and that there is mismatch in the balance sheet of assessee as on 31/03/2015, the value of house "Indraprakash Row House" was shown at Rs. 3.51 lacs as on 31/06/2016. The value of construction of house should be Rs. 1.05 crores. The ld AR for the assessee during his submissions explained that investment of Rs. 1.05 crores made in construction of house plus Rs. 2.50 lacs as site supervision and consultation fees, details of Rs. 85,000/- of kitchen equipment and Rs. 71,000/- in solar equipment and furniture fitting of Rs. 7,66,971/- aggregating of Rs. 1.17 crores. We find that coordinate bench of Chennai Tribunal in B Siva Subramanian Vs ITO (supra) held that there is no condition in section 54F that building plan of residential house should be approved by Municipal Corporation or any other competent authority. Hon'ble Madras High Court in CIT Vs P V Narasimhan (supra) held that utilisation of sale proceed of one house to construct first floor after demolishing old structure....