TaxTMI 
TaxTMI 
2026 (1) TMI 1478
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....e registered joint venture agreement dated 20.01.2011. As per the agreement M/s. Nandan Buildcon Pvt Ltd has agreed for the construction of residential houses on the land of the assessee and the assessee in lieu of this JV agreement will get 34% of construction area. The terms and conditions of the agreement clearly show that the assessee has transferred the land to the developers for development purpose and the joint venture agreement is also a registered agreement. He noted that the assessee has converted his agricultural land as stock in trade and is paying tax on the capital gain and tax on business income as per the provisions of section 45(2) of the Act. This fact, according to the Assessing Officer, clearly shows that the assessee has transferred his capital asset into stock in trade in view of the Joint Venture agreement dated 20.01.2011. He, therefore, was of the view that the land is transferred in the financial year 2010-11 itself. However, the assessee has claimed deduction of Rs. 289,64,823/- u/s 54B of the Act. 4. The Assessing Officer noted that the assessee has claimed the date of transfer of original asset as 01.04.2016. However, no explanation was submitted reg....
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....tal asset into stock in trade in view of the JV agreement. The assessee has filed the returns and paid taxes as per the provisions of Section 45(2) of the IT Act. The assessee has claimed date of transfer as 01.04.2016, however, has not furnished any documentary evidence or explanation of taking this date as date of transfer. The date of transfer as per the JV agreement and as per the transfer of capital asset in stock in trade is 20.01.2011. The assessee has purchased the agricultural land on 23.03.2017. The fact shows that the assessee has not purchased the land within two years from the date of transfer of original asset which is stipulated time limit for availing exemption u/s 54B. 11. It is also evident from the record that assessee has already availed deduction u/s 54B of Rs. 01,05,92,146/- in the AY 2014-15 Rs. 3,60,35,153 in A.Y. 2015-16 and Rs. 1,22,22,000// in A.Y. 2016-17. As per the provision of Section 54B of IT Act the assessee has to purchase any other land for being use for agricultural purpose within two years after the date of transfer. The provisions clearly stipulate that the investment is to be made in agricultural land within two years. Assessee can m....
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....turn of income under section 139(1), he has wrongly presented the capital gain after claiming the deduction under section 54B which was an inadvertent error. The appellant also submitted that he would like to file revised computation for the year under consideration for withdrawing capital gain income and the claim of deduction u/s. 54F. Thus, it is clear that it is an afterthought of the appellant to avoid capital gains. Further, withdrawal of capital gains and claim u/s. 54B of the Act is not permitted, since the appellant has not offered capital gains in the year of transfer of land i.e. FY 2010-11 relevant to AY 2011-12. In view of the above, the contention of the appellant is rejected and the action of the AO is upheld. Hence, grounds raised in this regard are dismissed. 6. In the result, the appeal is dismissed." 7. Aggrieved with such order of the Ld. CIT(A) / NFAC, the assessee is in appeal before the Tribunal by raising the following grounds: On facts and circumstances and in law, 1. The learned Commissioner of Income Tax (Appeals), NFAC and the Assessing Officer have erred in confirming/making the aggregate addition and disallowances of Rs. 2....
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....llowing is noticed from the order u/s 148 of the I.T. Act dated 20-07-2022; "During the assessment proceedings for the assessment year 2016-17 and 2017-18, it is revealed that the assessee has wrongly claimed deduction u/s 54B/54F and accordingly assessment was completed. The facts of the case are that the assessee has entered into a joint venture with Nandan Buildcon Pvt. Ltd. vide registered joint venture agreement dated 20.01.2011. The terms and conditions of the agreement clearly show that the assessee has transferred the land to the developers for development purpose and the Joint Venture agreement is also a registered agreement. The assessee has shown full value of consideration of Rs.1,14,06,128/ -. He deducted an amount of Rs.8,13,982/- as cost of acquisition and the remaining amount of Rs. 1,05,92, 146/- has claimed as exemption u/s 54B of the Act. Accordingly, shown LTCG at Rs.Nil on the capital gains derived from the transfer of same land. It is also seen that assessee has claimed the exemption u/s 54B on account of purchase of agricultural land in relevant year, However the capital gain on the transfer of asset is arisen on date of transfer of assets a....
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.... the period of two years from the date of transfer of original asset has mandated by the provisions of Section 54B of the IT Act. In view of the above facts, the assessee is not entitled for the claim of deduction/ exemption u/s 54B as the investment is made beyond the period of two years from the date of transfer of original asset." 11. Referring the assessment order for assessment year 2016-17, copy of which is placed at pages 101 to 108 of the paper book, the Ld. Counsel for the assessee drew the attention of the Bench to para 6 of the order where the Assessing Officer has mentioned as under: On verification of the submission made by you, it is seen that the assessee has entered into joint ventures with Nandan Buildcon Pvt. Ltd. vide registered joint venture agreement dated 20.01.2011. As per the Joint Venture, the assessee is to receive 34% of total construction area. The assessee has converted the land into stock in trade in the financial year 2010-11, hence the assessee has shown long term capital gain and business income as per the provisions of section 45(2) of the Income Tax Act. The facts show that the assessee has already transferred the land into stock in tr....
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.... of Hon'ble Bombay High Court in the case of Ciba of India Ltd vs. CIT reported in 70 Taxman 505 (Bom), he submitted that the assessee can raise an alternate plea / ground before the Tribunal even if not raised earlier. 17. The Ld. Counsel for the assessee submitted that both the lower authorities have given a concurrent finding that the transfer of agricultural land occurred on 20.01.2011 by virtue of provisions of section 2(47)(iv) and 2(47)(v) of the Act. He submitted that whichever stand one adopts whether conversion into stock or whether transfer of agricultural land, the issue of capital gain on sale has to be considered in assessment year 2011-12. He submitted that on that date the land was agricultural land under cultivation situated beyond municipal limits. Since the agricultural land is not a capital asset u/s 2(14)(iii) of the Act, therefore, no capital gain could arise in assessment year 2011-12. He submitted that conversion of capital asset into stock u/s 45(2) of the Act is inconsequential and the transfer of land and conversion of land into stock on same day has no effect. Further, if flats are treated as converted, then its cost and market value on date of conver....
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....he claim of deduction u/s 54B of the Act on the ground that the assessee has already availed deduction u/s 54B of the Act in assessment years 2014-15, 2015-16 and 2016-17. Further, the assessee during the year has again claimed the deduction u/s 54B of the Act on account of purchase of agricultural land which is after a period of 2 years since the date of transfer as per JV agreement and as per the transfer of capital asset in stock in trade is dated 20.01.2011 and the assessee has purchased the agricultural land on 23.03.2017. The reasons given by the Assessing Officer for rejecting the claim of deduction u/s 54B of the Act have already been reproduced in the preceding paragraphs. We find before the Ld. CIT(A) / NFAC the assessee made an alternate claim stating that the claim of deduction u/s 54B is incorrect and the assessee is entitled to claim deduction u/s 54F of the Act. However, the Ld. CIT(A) / NFAC also rejected the same, the reasons of which have already been reproduced in the preceding paragraphs. 22. It is an admitted fact that the assessee is neither entitled to any deduction either u/s 54B or u/s 54F. The assessee is liable for capital gain tax on the income that a....
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....y relate to the power of the assessing officer to entertain a claim for deduction otherwise than by filing a revised return. In the circumstances of the case, we dismiss the civil appeal. However, we make it clear that the issue in this case is limited to the power of the assessing authority and does not impinge on the power of the Income Tax Appellate Tribunal under section 254 of the Income Tax Act, 1961. There shall be no order as to costs." 25. In view of the above decisions, we hold that the assessee is entitled to raise an additional claim before the appellate authorities and the appellate authorities have the jurisdiction to entertain such a new claim. 26. We further find the Hon'ble Bombay High Court in the case of Balmukund Acharya vs. CIT (supra) has held that if any assessee, under a mistake, misconceptions or on not being properly instructed is over assessed, the authorities under the Act are required to assist him and ensure that only legitimate taxes due are collected. If particular levy is not permitted under the Act, tax cannot be levied applying the doctrine of estoppel. Similar view has been taken by Hon'ble Karnataka High Court in the case of Shri Devendra ....