TaxTMI 
TaxTMI 
2026 (6) TMI 291
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....ntire consideration was given to developers prior to the sale of the land as against the time period of one year from the date of sale of land as envisaged in section 54F. 2. Whether on the facts and circumstance of the case and in law, the Ld CIT(A) has erred in law by deleting the unexplained investment made in land bearing survey No. 701 which was in excess of sale consideration received in respect of land bearing survey No.45 and fund received in bank account. 3. Whether on the facts and circumstances of the case and in law, the Ld CIT(A) has erred by not providing opportunity to the AO to verify and examine the fresh evidence produced during the appellate proceedings as per sub rule (3) of Rule 46a of Income tax Rule. 4. The appellant craves leave to add, modify, amend or alter any grounds of appeal at the time of, or before, the hearing of appeal. 3. The brief facts of the case are that the assessee, an individual, is a Civil Contractor and derives income from business and other sources. The assessee has e-filed his return of income for the AY 2017-18 on 25.03.2018 declaring total income at Rs. 36,39,420/-. The case was selected for Limited scrut....
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....uction u/s. 54B of the Act in respect of land acquired prior to transfer of capital asset is clearly opposed to the plain provision of the Act and thus apparently not sustainable having regard to express the provision of the statute. The legislature in its own wisdom has used the expression before the transfer of long term asset as well as after the transfer of capital asset at appropriate places viz. Section 54 of the Act. The intention of the legislature is thus quite clear. In the case of Mathur Lal Vs. ITO, reported in 174 ITD 44 Hon'ble ITAT, Jaipur, has held that the purchase prior to the sale of the existing land would not be allowable for deduction u/s. 54B of the Act. 6.2 Since issue stands covered by the decision of jurisdictional ITAT cited supra, I have no option but to uphold the addition made by the AO. Disallowance of deduction u/s. 54B to the extent of Rs. 88,17,491/- is sustained. Ground of appeal number 1 is dismissed. 7. Appellant had made investment of Rs. 60,00,000/- and claimed deduction of Rs. 56,40,000/- u/s. 54F. It was noticed by the Assessing Officer that the appellant had sold urban land at Valasan on 20.03.2017 for Rs. 1,90,14,000/....
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....for purchase of the flat is Rs. 65,00,000/-. Assessing Officer has considered date of purchase of flat as on 28.03.2019 when the sale deed was registered. He has ignored the said banakhat wherein all transactions details have been mentioned which have been honored by appellant and the developer. Appellant had stated that he tried his best to get the sale deed register immediately after entering into banakhat with the developer. However, the developer kept on postponing the registration on account of some internal dispute amongst the partners. Appellant had submitted photocopy of the said banakhat and original banakhat for my perusal. While examining the facts of the case, presence of this banakhat cannot be ignored. Banakhat was entered into well within the time prescribed in section 54F and the same has been duly honoured by both appellant and developer Assessing Officer has chosen not to discuss this banakhat at all in the assessment order. 7.5 Looking at the facts of this case as mentioned in the preceding paragraphs, I am convinced that appellant has fulfilled all the conditions prescribed in section 54F. I proceed to delete addition made by the Assessing Officer on ac....
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.... of the Act. The Ld. DR contended that the Ld. CIT(A) accepted the claim of the assessee on the basis of an unregistered banakhat and other evidences which were not properly examined by the Assessing Officer, thereby violating the provisions of Rule 46A. With regard to the deletion of addition u/s. 69 of the Act, it was submitted that the Ld. CIT(A) accepted the explanation of the assessee without proper verification of sources. 7. The Ld. AR, on the other hand, reiterated the submissions made before the lower authorities. The Ld. AR submitted that the assessee had received advances against sale of agricultural land much prior to the execution of the sale deeds and such advances were utilized for purchase of new agricultural land. With regard to the deduction u/s. 54F of the Act, it was submitted that the assessee had entered into an agreement within the prescribed time and the delay in registration of the sale deed was beyond the control of the assessee. The Ld. AR further submitted that the source of investment in the property was fully explained through banking channels and the addition u/s. 69 was made merely on conjectures and surmises. 8. We have heard the rival submiss....
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....hall not be charged under section 45: Provided that nothing contained in this sub-section shall apply where- (a) the assessee,- (i) owns more than one residential house, other than the new asset, on the date of transfer of the original asset; or (ii) purchases any residential house, other than the new asset, within a period of one year after the date of transfer of the original asset; or (iii) constructs any residential house, other than the new asset, within a period of three years after the date of transfer of the original asset; and (b) the income from such residential house, other than the one residential house owned on the date of transfer of the original asset, is chargeable under the head "Income from house property". Explanation.-For the purposes of this section,- "net consideration", in relation to the transfer of a capital asset, means the full value of the consideration received or accruing as a result of the transfer of the capital asset as reduced by any expenditure incurred wholly and exclusively in connection with such transfer. (2) Where the assessee purchases, within the period of two ....
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....section is not utilised wholly or partly for the purchase or construction of the new asset within the period specified in sub-section (1), then,- (i) the amount by which- (a) the amount of capital gain arising from the transfer of the original asset not charged under section 45 on the basis of the cost of the new asset as provided in clause (a) or, as the case may be, clause (b) of sub-section (1), exceeds (b) the amount that would not have been so charged had the amount actually utilised by the assessee for the purchase or construction of the new asset within the period specified in sub-section (1) been the cost of the new asset, shall be charged under section 45 as income of the previous year in which the period of three years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw the unutilised amount in accordance with the scheme aforesaid....." In the present case, it is an undisputed fact that the substantial payment towards purchase of the new asset was made on 25.03.2015, which is more than one year prior to the date of transfer of the original asset. The registered sal....