TaxTMI 
TaxTMI 
2023 (10) TMI 1418
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....2014 and 30.03.2015 at village Dhanelli whereas the assessee has sold the land at Sejbahaar on 31.03.2015 thereby proving that the land was purchased either before or on the date of transfer of land at Sejbahaar in contravention to section 54 B? 2. Whether on the facts of the cases and in law, the CIT(A) is justified in deleting the addition of Rs. 91,80,111/- made on account of deduction claimed u/s 54B of the Act thereby ignoring the fact that the Bikri Ikrarnama between the assessee along with Shrichand Golechha and Smt. Chandu Bai Jain and M/s Satyam Developers was duly notarized which was also accepted by the assessee in reply filed on 26.12.2017, whereas the Sahmati Patra and Kabja Patra dated 10.09.2014 was not notarized and also in view of fact that there is no any mention of Sahmati Patra, Kabja Patra and the Bikri Ikrarnama in the sale deed executed on 30.03.2015 for Rs. 1,94,40,000/-? 3. Whether on the facts of the cases and in law, the CIT(A) is justified in deleting the addition of 91,80,111/- on account of deduction claimed u/s 54B of the Act thereby ignoring the fact that in the 'Sahmati Patra' and Kabj Patra' dated 10.09.2014 it is mentioned that t....
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.... income of Rs. 4,92,390/-. In due course, the case of the assessee was selected for limited scrutiny through CASS on the following reasons :- i) Large deduction u/s.54B, 54-C, 54-D, 564-G, 54-GA. ii) Mismatch in sales turnover reported in audit report and ITR. 5. During the F.Y. 2014-15 relevant to A.Y. the assessee has jointly sold land with Shri Shrichand Golechha s/o Shri Pukhraj Golechha a land at Sejbahar Kh. No. 481/1 area 1.215 hectare to M/s Satyam Developer for Rs. 1,94,40,000/- on 30.03.2015. As mentioned in the deed the entire sales consideration was received by cheques as under:- Date Cheque no. State Bank of India Amount 02.09.2014 771035 State Bank of India Rs. 1000000/- 15.09.2014 771036 State Bank of India Rs. 100000/- 15.09.2014 771037 State Bank of India Rs. 370000/- 13.05.2015 771041 State Bank of India Rs. 1000000/- 08.07.2014 389873 State Bank of India Rs. 1000000/- 06.09.2014 413227 State Bank of India Rs. 500000/- 06.09.2014 413228 State Bank of India Rs. 1000000/- 13.09.2014 413229 State Bank of India Rs. 500000/- 20.03.2015 ....
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....) as per terms of agreement. The sales consideration was paid as per agreed terms which was utilized for purchase of agricultural land whose details is as under which is already given in pint No. 2 of our submission dated 23.08.2017." 7. With the aforementioned reply of the assessee dated 21.09.2017, the the assessee has filed the copy of Sahmati Patra and Kabja Patra dated 10.09.2014 between the assessee, co-sellers Shri Shrichand Golechha and M/s Satyam Developers. The said agreement was found to be neither registered nor notarized. In the agreement the Kh. No. 481/1 and area 1.618 hectare is mentioned to be sold @ Rs. 65,00,000/- per Acre and the details of advance payment of Rs. 60,00,000/- is mentioned as under :- Amount Cheque no. Bank Name Rs. 2000000/- 320960 Bank name not & date not given Rs. 1000000/- 413227 Bank name not & date not given Rs. 1000000/- 771035 Bank name not & date not given Rs. 1000000/- 389873 Bank name not & date not given Rs. 1000000/- 389872 Bank name not & date not given Total Rs.6000000/- Bank name not & date not given 8. On going through the payment details in the sale deed ....
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....ement [Vikray Ikramamawith Satyam Developers for sale of 3.331 hectare of agricultural land which was also notarized. The list of total land is enclosed herewith as Annexure 'k'. But later on the purchaser asked for possession of 1.618 hec. Of agricultural land belonging to the assessee and Shri Shrichand Golechha for which Sahmati Patra and Kabja Patra dated 10.09.2014 was executed for area of 1.618 hec. So that this part of land can be used by purchaser. The assessee has handed over the land to the purchaser on 10.09.2014 when as agreement was exacted and following payments where received through bank before the date of agreement which payments are also mentioned in the relevant registry copy of bank statement enclosed to evident the credit entries. Date Cheque No. Amount 02.09.2014 771035/- Rs. 1000000/- 09.09.2014 389873 Rs. 1000000/- Deduction u/s 54 is already discussed in our submission dated 21.09.2014. The reply and plea of the assessee were not found acceptable by the Ld AO for the following reasons- a) The Bikri Ikramama between the assessee along with Shrichand Golechha and Smt. Chandu bai jain and M/s Satyam Develop....
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....Patra and Kabja Patra dated 10.09.2014 by taking the shelter of an illegal document. It was also noted by the AO that by such means the assessee has also tried to prove that the agricultural lands purchased at village Dhaneli have purchased after the date of transfer. The AO, refused to accept the reply and plea of the assessee, thus, have not accepted the date of transfer of the land at Sejbahar as 10.09.2014. He inferred that the date of transfer is actually the 30.03.2015 the date of execution of the sale deed. Thus, the AO held that all the agricultural lands have been purchased on or before 30.03.2015, the deduction u/s 54B would have been allowable only when the assessee would have purchased the agricultural land after 30.03.2015, consequently, the claimed u/s 54-B was disallowed. The cost of the acquisition of land sold at Sejbahar is taken at Rs. 2,73,635/- as furnished by the assessee in his reply and indexed cost is worked out to Rs. 5,39,889/- (F.Y. 2006-07 Rs. 273635/519 x 1024 = 5,39,889). finally, the AO calculated the taxable long term capital gain at Rs. 91,80,111/-. 10. Aggrieved with the above order of the AO, the assessee preferred appeal before the ld. CIT(A)....
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....efore the Tribunal against the deletion of the addition by the ld. CIT(A). 11. Ld. Sr. DR before us submitted that the Ld. CIT(A) is not justified in deleting the addition of deduction claimed u/s 54B of the Act, ignoring the fact that the A.O. has disallowed the deduction claim on the ground that the assessee has purchased all the four lands on 25/11/2014, 09/12/2014 and 30 / 03/2015 at village Dhanelli whereas the assessee has sold the land at Sejbahaar on 31/03/2015 thereby has proved that the land was purchased either before or on the date of transfer of land at Sejbahaar. As per Section 54B for the claim of deduction of capital gain from transfer a capital assets under the said section, the assessee, being an individual or his parents or a HUF, should have purchased any other land being used for agricultural purpose, immediately preceding the date on which the transfer of such capital asset took place. 12. It was the submission of Ld. Sr. DR that Ld. CIT(A) has grossly erred in deleting the addition ignoring fact that the Bikri Ikrarnama between the assessee along with Shrichand Golecha and others & M/s Satyam developers was duly notarized and the assessee is also a part....
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....laim made u/s 54B of the Income Tax Act, 1961 by stating that since the agricultural land has purchased prior to the date of sale of agricultural land, therefore the assessee is not eligible for deduction u/s 54B of the Income Tax Act, 1961. • That the above contention of the A.O. is not correct. That prior to the registry of the land, the assessee has executed one sahamati /kabja patra on 10.09.2014 [refer page no 16-18 of paper book (PB)], where in possession was handed over to the buyer. The assessee has received advance amount for sale of said land and is evident from the registered deed and sahamati/kabja patra. (refer page no 41-49 of PB for registered deed )The said advance amount along with some other amount is utilized for purchase of agricultural land for claiming deduction u/s 54B (refer page no 38 of PB ). • ➢That in view of spirit of CBDT Circular issued dated 10.05.1983 for claiming deduction u/s 54E (refer page no 40 of PB ) and in view of various case laws, it is to submit that if the advance amount is utilized for purchase of another land even through the registry has taken place subsequently, the assessee is eligible for deduction ....
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....,70,000/- 43 NA YES 15.09.2014 320961 9,72,500/- 30 NA YES Total 33,42,500/- 20.03.2015 021077 60,00,000/- 36 NA NA New Agricultural Land Purchased detail (Refer page no 38 of PB) Detail of Land Date of Purchase Total Investment 50% share (Assess's Share) Land at Dhaneli Kh. No- 3/1, 3/9 25.11.2014 27,43,870 13,71,935 Land at Dhaneli. Kh. No-3/2 25.11.2014 62,64,736 31,32,368 Land at Dhanei, Kh. No.2/5/2,355/2/2,5/, 5/26 09.12.2014 84,90,318 42,45,159 Land at Dhaneli. Kh. No- 3/7,3/8 30.03.2015 74,50,850 37,25,425 Total 2,49,49,774 1,24,74,887 15. With the aforesaid submissions, it was the submission of the Ld. A.R. that the agriculture land was purchased prior to the date of sale of agricultural land and prior to the registry of the land, as per Sahmati/ Kabja Patra dated 10/09/2014 the possession was duly handed over to the buyer, this fact was substantiated by the Ld. A.R. by showing us copy of the Sahmati/ Kabja patra wherein at page 2 it is mention that the possession of land it is handed over ....
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....ed will qualify for exemption under section 54E. Circular : No. 359 [F. No. 207/8/82-IT(A-II)], dated 10-5-1983. JUDICIAL ANALYSIS EXPLAINED IN - In Ramesh Narhari Jakhadi v. ITO [1992] 41 ITD 368 (Pune-Trib.) it was observed that inasmuch as the above circular has been issued by the Board keeping in view the purpose and spirit of section 54E, same consideration would apply for relief under section 54B also, because if an agriculturist is dispossessed of his agricultural land and obtains possession of another agricultural land for the purpose of being used for agricultural purposes, the same benefit available under the Board's circular should be extended to the assessee governed by section 54B also. In this connection, it is also necessary to consider the question whether the investment should be made in new agricultural land necessarily within a period of two years after the date of transfer or not. Applying the spirit of the circular of the Board, it could be said that the investment made prior to the date of transfer would also be eligible and should be considered as investment made out of sale proceeds. The limit of two years' period after transfer is an outer....
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....e of section 54B, period of investment has to be counted from the date of sale agreement itself and not from date of registration." • Inderjeet Singh Mann vs. ACIT [ITA No. 1136/CHD/2014] (ITAT Chandigarh Bench), in this judgment ITAT's Chandigarh Bench, wherein CBDT's Circular No. 359 dated 10/05/1983 was discussed and also various judgments by coordinate bench of the ITAT Amritsar, Pune, Chennai were discussed also judgment by the Hon'ble Bombay High Court in the case of Subhas Vinayak Supnekar (supra) was referred to and has observed that: "14. We have considered the rival submissions. The assessee has filed copy of the sale deed dated 19.2.2009 in the paper book in which it is specifically mentioned that assessee received various advances from the purchasers on different dates in the year 2007 before execution of sale deed. According to the chart prepared by the Ld. Counsel for the assessee, upto November 2007, the assessee has received advance money of Rs. 4,63,35,060/-. It would, therefore, prove that purchaser has paid substantial amount to the assessee as advance money as against total sale consideration of Rs. 5.64 crores. No purchaser would make such....
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....d that the amount invested will qualify for exemption u/s 54B of the I.T. Act. 17. Relying on the aforesaid decisions Ld. AR of the assessee submitted that since the advances towards the sale of property were already received by the assessee which is an irrefutable fact and the possession of the property was also handed over to the buyer, may be with the specific mention for the purpose of agriculture which cannot said to be holding back the right of the buyer to have a legal possession of the property, also the advances referred to in Sahmati/ Kabja Patra dated 10/09/2014 which are mentioned in the registered sale deed, establishes that such advances were utilized only for the purchase of impugned agricultural land by the buyer. With due consideration of the CBDT's Circular and case laws relied upon by the assessee it was the submissions that contentions of the revenue are not in accordance to the facts and merits of the case, that the claim of the assessee u/s 54B is not permissible for the reason that the agricultural land has purchased prior to the date of sale of agricultural land which is a mandatory condition for deduction according to the provisions of Section 54B, on th....
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....he Ld. CIT(A) wherein, it is observed that the money on sale of Sejbahaar land was received by the assessee on various dates from 02/09/2014 to 15/09/2016, assessee has also taken loan which is invested in new land and since loan was repaid afterwards out of the sale consideration received therefore deduction u/s 54B cannot be denied. Reliance was placed on order of ITAT Mumbai in the case of Inshar Singh Chawada Vs. DCIT 130, and decision of Hon'ble Bombay High Court in the case of CIT Vs. Dr. P. S. Pasricha in ITA No. 1825/2009 dated 07/10/2009. Ld. AO's contention that the Sahmati / Kabja Patra was not notarized can be treated as an irregularity but cannot term the document as false or vain, so as to deny the deduction u/s 54B, dehors any supporting material to prove that the said document was a bogus document, while the assessee's contentions are supported with the fact that advances were received through banking channel duly recorded in the Sahmati / Kabja Patra as well as in the registered sale deed, therefore, we are convinced with the submission of the assessee. Accordingly, as per settled position of law, we are of the considered opinion that assessee has appropriately cla....
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.... been taken against addition of unsecured loans. Relevant facts as per the assessment order are as under: The assessee has filed copy of cash book for A.Y. 2014-15 and 2015- 16. On going through the balance sheet of A.Y. 2015-16 it is found that the assessee has shown unsecured loans of Rs. 12521000/- in the name of following persons. Ankit Jain Rs. 1366000/- Anubhuti Jain Rs. 2200000/ Archana Goswami Rs. 500000/- Chandubai Jain Rs. 805000/- Hemlata Ojha Rs. 500000/- Kamlesh Ojha Rs. 500000/ Mokshita Chandrakar Rs. 250000 Priti Bajaj Rs. 800000/- Sanjay Kumar Dhale Rs. 900000/- Shailesh Ojha Suresh Rs. 500000/- Suresh Kumar Ojha HUF Rs. 850000/- Vasudeo Bajaj Rs. 600000/- Vasudevo Bajaj HUF Rs. 850000/- Yogendra Dewangan Rs. 900000/- . Yogendra Goswami Rs. 500000/- Total Rs. 1252100 All above unsecured loans are new and shown in A.Y. 2015-16. The assessee has filed the confirmation of a/c of the loan creditors and copy of acknowledgement of their income of return. Vide this office letter dated 14.09.2017 the assessee was asked to file the copy of pe....
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....nished copy of letter dated 12/12/2017 wherein the AO has asked confirmation of all loans of Rs. 54,70,896/-. This query is at SI. No. 9 of the said letter. The assessee has not only furnished the same but as noted by the AO has also furnished acknowledgment of filing of return and balance sheet. When the creditors have confirmed having provided loan, whether or not cheque number are written against the transactions it will not affect the acceptability of the document. Instead of simply treating the outstanding amount as assessee's income if the assessee had any doubt the AO should enquire from assessee and was also empowered to make enquiries from the creditors. By making addition without allowing any opportunity to the assessee to explain the addition cannot be sustained, In a case ( Russian Technology Centre Pvt. Ltd 300 CTR 501) Delhi High Court has held that" the preceding enumeration of the circumstances of the case show that the assessee had furnished all the relevant data before the AO and the CIT(A) which however were not inquired into by the AO. Instead of obdurately adhered to his first impression and/or initial understanding that the entire transaction was neither credi....
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....on of the is at para - 5 at page- 10 and 11 of the Assessment Order Observation of CIT(A): • Observation of CIT(A) is at para 3.3 at page 13 & 14 of CIT(A) order. Submission: • Please refer written submission made before CIT(Appeal) para 3.1 to 3.7 page no 915 of PB. • During the year the assessee has received unsecured loan of Rs. 1,25,21,000/-. To prove the identity and creditworthiness and genuineness of the transaction, the assessee had furnished ITR, Confirmation of account of lender and bank statement of the assessee. However, the A.O. made the addition by stating that the assessee has not submitted the computation of income, capital account, balance sheet and bank statement of the lender, therefore the failed to prove the creditworthiness of the creditor, mode of transaction and genuineness of the transaction. • The assessee has duly discharged his primary onus by submitting ITR, Confirmation of account of the lender. (refer page no 59-90 of PB for ITR and Confirmation of account). Further, the assessee has submitted copy of his own bank statement evidencing the loan is received through banking channel (refer page ....
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.... 10,50,000 1,50,000 7,00,000 704276 707401 70716 707408 29.07.15 29.08.15 13.10.15 19.10.15 9 Anubhuti Jain 22,00,000 61-62 55 4,00,000 704273 07.07.15 7 Archana goswami 5,00,000 63-64 53 5,00,000 366022 10.08.15 9 Chandubai jain 8,05,000 65-66 56 10,00,000 707175 24.11.15 20 Hemlata ojha 5,00,000 67-68 52 5,00,000 707167 19.10.15 17 Kamlesh ojha 5,00,000 69-70 52 5,00,000 707420 17.09.15 14 Mokshita chandrakar 2,50,000 71-72 57 Priti bajaj 8,00,000 72-73 52 and 54 5,00,000 3,00,000 366027 707407 25.08.15 03.09.15 10 12 Sanjay Kumar Dhale 9,00,000 74-75 55 and 56 9,00,000 366025 20.08.15 10 Sailesh Ojha 5,00,000 76-77 52 5,00,000 707168 19.10.15 18 Suresh kumar ojha 5,00,000 78-79 52 5,00,000 707410 16.09.15 13 Suresh ojha HUF 8,50,000 80-81 54 8,50,000 707419 17.09.15 14 ....