AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2023 (5) TMI 1364
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....se of Dakshaben Shailesh Dhameliya, for assessment year 2017-18, have been taken into consideration for deciding the above appeals en masse. 3. The grounds of appeals raised by the assessee in "lead" case in ITA No. 111/SRT/2022 for assessment year 2017-18 are as follows: "1. On the facts and in the circumstances of the case as well as law on the subject, the learned Pr. Commissioner of Income-tax has erred in passing revisionary order u/s 263 of I.T. Act, 1961 setting aside the order of ld. Assessing Officer passed u/s 143(3) of the I.T. Act, 1961 dated 05.12.2019 for the year under consideration although said order is neither erroneous nor prejudicial to the interest of revenue. 2. On the facts and in the circumstances of the case as well as law on the subject, the learned Pr. Commissioner of Income-tax has erred in holding agricultural land as non-agricultural land as per available records and sale deed. 3. On the facts and in the circumstances of the case as well as law on the subject, the learned Pr. Commissioner of Income-tax has erred in observing that order passed by Assessing Officer u/s 143(3) of the I.T. Act, 1961 is erroneous on the ground ....
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....deduction u/s 54B of the Act for transfer of agriculture land is not fulfilled and Assessing Officer has not made inquiries and verification with respect to fulfillment of various conditions required by the provisions of section 54B before allowing the deduction u/s 54B of the Act. For instance, Assessing Officer has not made any inquiry to verify if the assessee was using the said land for agricultural purposes for two years immediately preceding the date on which transfer took place and considering that the assessee has not disclosed any agricultural income for A.Y. 2016-17 in her return of income. Therefore, deduction u/s 54B of the Act at Rs.1,99,09,516/- allowed by the Assessing Officer during the assessment was not regular and liable for disallowance. In view of facts discussed above, the ld PCIT observed that during the assessment proceedings, the Assessing Officer has erred in not disallowing the deduction of Rs.1,99,09,516/- u/s 54B of the Act while computing the total income. Therefore, ld PCIT issued a show cause notice bearing DINITBA/REV1/2020-21/1040135016(1) dated 25.02.2022 and duly served on the assessee. 6. In response to the above show cause notice dated 25.02....
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....t on the land sold during the preceding two year from the date of transfer of the said land. Further, the assessee also not furnished copy of 7/12 received from the Revenue Authority, therefore type of crop grown, means of irrigation etc., was not verified by the assessing officer. Therefore, ld PCIT noted that during the course of assessment proceedings, the Assessing Officer has not made inquiries with respect to the claim of deduction made by the assessee amounting to Rs.1,99,09,516/-. The Assessing Officer has failed to consider that the entire claim was liable to be disallowed in absence of proper evidence regarding the use of land sold at Moje Mota Varachha for agricultural purposes during the period of two years, immediately preceding the date on which transfer took place. This shows non application of mind by the Assessing Officer while completing the assessment proceedings. Therefore, the assessment order passed u/s 143(3) of the Act dated 05.12.2019 for A.Y. 2017-18 was treated as erroneous as well as prejudicial to the interest of Revenue. 8. Aggrieved by the order of Ld. PCIT, the assessee is in appeal before us. 9. Shri Sapnesh R Sheth, Learned Counsel for the as....
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....sessee. The Ld. CIT-DR further pointed out that just to submit Form 7/12 extract, is not a conclusive proof that assessee was doing agricultural activity. Therefore, assessee has not fulfilled the condition for claiming deduction u/s 54B of the Act, hence, the order passed by the Ld. PCIT should be upheld. 12. We have heard the rival contentions, perused the material on record and duly considered facts of the case in the light of the applicable legal position. We note that during the assessment proceedings, the Assessing Officer issued notice u/s 142(1) of the Act, (which is placed at page No.-51 of the paper book), wherein, the Assessing Officer has asked the assessee several questions and in response to notice under section 142(1) of the Act, the assessee submitted its reply with documentary evidences such as expenditure incurred by the assessee on agricultural activities, bills and vouchers, the crop grown by the assessee on land etc. Besides, Assessing Officer also asked the assessee to provide the details of agricultural products and the complete address of agricultural land and crop grown on land. In response to such notice, the assessee submitted reply to the Assessing Of....
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....ord vide Entry No.5575, Date;12/09/2006. The said entry was subsequently certified on 04/12/2006. Thereafter, said Natwarbhai Dolatbhai Desai, had sold the said non registered lands of his own registered with BlockNo.627 (Survey No.655/3)of said Moje Mota Varachha admeasuring area 2294.00square meters, land registered with Block No.628 (Survey No.655/2) of said Moje Mota Varachha admeasuring area 1675.00 square meter land registered with Block No.629 (SurveyNo.655/1)of said Moje Mota Varachha admeasuring area 1540.00 square meter to Prince Palace Construction Pvt. Ltd. by writing separate sale documents. The said sale deeds were registered in the office of the Hon'ble Sub-Registrar, Surat City- 4(Katargam) vide Serial No.11741, 11742 and 11744 dated 03/10/2006 respectively. The collective entry of the said sales has been recorded in the Revenue record vide Entry No5603, dated 11/10/2006. The said entry was subsequently certified on 16/12/2006. With the inclusion of said Mota Varachha village in Surat City, the entire village office was transferred to Surat City Taluka. The entry of the same has been recorded in the Revenue record vide Entry No.5691 and Entry N....
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....g order u/s 263on 06.03.2022. the reason for set aside was that the deduction claimed by the assessee u/s 54B of the long term gain against purchase of agricultural land maybe verified to justify his claim. The assessee has claimed deduction u/s 54B to the tune of Rs.1,99,09,516/-. The assessee was issued notice u/s 142[1] as per the above dates for giving details by giving copy of sale deed of agricultural land, copy of purchase deed of agricultural land, ledger account, copy of bank account for transaction done for amount of sale and purchase of land. The entire working of capital gain with deduction u/s 54B by justifying his claim the total agricultural land as on 06.05.2006 was 22764 square meter, and out of this the previous owner Shri Natvarbhai Dolatbhai Desai has converted 5509 square meter as non-agriculture land vide order no. 355/2066 dated 06.05.2006 and this land was sold to M/s Princess Palace Construction Pvt. Ltd. The balance land was 17255 square meter was left as agricultural land and this land was sold by all the three co-owners as agricultural land. The assessee has also submitted copy of the agricultural land purchased to justify his claim for deduction u/s 54B....
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....ction u/s 54B of the Act. 18. We note that before us assessee has submitted following documents and evidences: (i) Sale Deed of Moje Mota Varachha, Block No.627/A, 628/A, 629/A T.P. 84 FP 223 along with copy of 7/12 ( Pages Nos. 8-38 of the paper book) (ii) Certificate issued by Talaati Kam Mantri, Gram Panchayat Mota Varachha (page no. 39 of paper book) (iii) Donation receipts of agriculture produce (corn green grass) given to trust (pages no. 40-42 of paper book) (iv) Letter/reply filed before AO (page 43-50 of Paper Book) (v) Notice u/s 142(1) of the Act issued by AO (pages 51-53 of PB) (vi) Letter/reply filed before AO (Pages 55-58 of PB) (vii) Notice u/s 142(1) issued by AO (pages 59-61 of PB) (viii) Letter/reply filed before the AO (pages 62-63 of PB) (ix) Notice issued u/s 142(1) by AO (pages 64-65 of PB) 19. From the above documents and evidences, it is clear that Assessing Officer made detailed enquiry before passing the assessment order. Therefore, it cannot be said that Assessing Officer has not applied his mind. Besides, the assessee was doing agricultural activities, prior to sale of....
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....ituation and use of the lands in the adjoining area were such as would indicate that the land was agricultural? (9) Whether the land itself was developed by plotting and providing roads and other facilities? (10) Whether there were any previous sales of portions of the land for non-agricultural use? (11) Whether permission under s. 63 of the Bombay Tenancy and Agricultural Lands Act, 1948, was obtained because the sale or intended sale was in favour of a non- agriculturist? If so, whether the sale or intended sale to such non-agriculturist or for non-agricultural or agricultural user? (12) Whether the land was sold on yardage or on acreage basis? (13) Whether an agriculturist would purchase the land for agricultural purposes at the price at which the land was sold and whether the owner would have ever sold the land valuing it as a property yielding agricultural produce on the basis of its yield? At the risk of repetition, we may mention that not all of these factors would be present or absent in any case and that in each case one or more of those factors may make appearance and that the ultimate decision will have to be reached ....
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....of exploitation of the land for the major part of the period during which the ae held it would indicate that not only its physical characteristics but the user also was agricultural. It is not shown that such user was of a temporary character or as and by way of a stop-gap arrangement. Even though the land was not actually put to agricultural use since about one year prior to the sale, there is no evidence to establish that it was converted to any other use. It is true that permission under s. 63 of the Bombay Tenancy and Agricultural Lands Act, 1948, was obtained by the assessee to sell the land to a co-operative housing society and that the permission was granted subject to the condition that the land should be used for residential purposes. This circumstance does not, however, militate against the land continuing to be agricultural on the date of its sale. The permission, in the instant case, weas obtained only about two and a half months prior to the sale. The permission was necessary only because the land was agricultural and because it was governed by the provisions of the Bombay Tenancy and Agricultural Lands Act, 1948. The mee fact that such a permission was obtained does n....
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....red for our opinion are answered as follows Question No.1: Answer: In the affirmative, i.e., against the Revenue and in favour of the assessee. Question No.2: Answer: In the negative, i.e., against the Revenue and in favour of the ae. The CIT will pay the cots of this reference to the assessee." 20. Let us take the guidance of judicial precedents laid down by the Hon'ble Apex Court in Malabar Industries Ltd. vs. CIT [2000] 243 ITR 83(SC) wherein their Lordship have held that twin conditions needs to be satisfied before exercising revisional jurisdiction u/s 263 of the Act by the CIT. The twin conditions are that the order of the Assessing Officer must be erroneous and so far as prejudicial to the interest of the Revenue. In the following circumstances, the order of the Assessing Officer can be held to be erroneous order, that is (i) if the Assessing Officer's order was passed on incorrect assumption of fact; or (ii) incorrect application of law; or (iii) Assessing Officer's order is in violation of the principle of natural justice; or (iv) if the order is passed by the Assessing Officer without application of mind; (v) if the Assessing Officer....