2025 (8) TMI 1440

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..... 2017-18. 2. The assessee has raised the following grounds of appeal: "1. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in upholding the disallowance of deduction of Rs. 2,74,00,000/- u/s 54B of the Income Tax Act on account of purchase of land stating that the land sold is not proved to hae been actually used for agricultural activities in the preceding two years and the new land was purchased prior to the sale of the agricultural land. 2. The Appellant prays that the deduction of Rs. 2,74,00,000/- u/s 54B of the Income Tax Act should be allowed on fats as well as on law. 3. The appellant craves leave to add, alter and/or to amend any of the grounds stated." 3. The brief facts of the case are that dur....

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....sessee failed to submit records of agricultural produce, expenses, or any certification from the relevant Talati for the preceding years. The AO also highlighted that the assessee himself admitted that the land was not used for agriculture in FY 2016-17 and BISAG satellite data confirmed non-agricultural use. Further, the AO found that the assessee purchased new land on 12/01/2017, i.e., before the sale of the original land on 22/02/2017, which violates the conditions of section 54B that require purchase within two years after the sale. Accordingly, the Assessing Officer disallowed the claim of exemption of Rs. 2,25,00,000/- under section 54B of the Act. Regarding the cost of acquisition, the Assessing Officer noted that the assessee had in....

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....appellate proceedings. However, the CIT(A) observed that the arguments made by the assessee were largely repetitive and failed to substantiate that the land sold was actually used for agricultural purposes in the two years immediately preceding the sale, which is a mandatory condition under section 54B of the Act. Further, CIT(Appeals) noted that the assessee also did not satisfy the condition that the new agricultural land must be purchased after the sale of the original land, as one of the properties was purchased prior to the sale. Therefore, since the assessee failed to discharge the burden of proof on both counts, the CIT(A) held that there was no merit in the submissions of the assessee and upheld the disallowance made by the Assessin....

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....in support. The ld. counsel for the assessee submitted that that the source of funds for purchase of land was from the same bank account in which sale proceeds were credited. Further, the assessee submitted multiple documents to show that the land sold was indeed used for agricultural purposes, including 7/12 extracts, land ledger (8A), land revenue payment receipts, loan confirmation from the cooperative society (Sakari Mandali) where the assessee was treated as a farmer, past income tax returns showing agricultural income, and bills for agricultural expenses. The ld. counsel for the assessee also submitted photographs of the land showing trees and boundaries showing agricultural land. The ld. counsel for the assessee submitted that that t....