ATULBHAI BALUBHAI PATEL,AHMEDABAD vs. THE ITO, WARD-5(3)(1), AHMEDABAD

The Learned CIT(A), NFAC erred in law and on facts in confirming the addition of Long Term Capital Gain of Rs.17,92,747/- made by the AO, such addition is requested to be deleted.

The learned CIT(A), NFAC erred in law and on facts in confirming the disallowance of Section 54EC of the Income Tax Act, 1961, made by the AO, such deduction is requested to be allowed.

The assessee is an individual and doing the business in Civil Construction work. He filed his return of income for the year under consideration on 17.12.2013 declaring taxable income of Rs.5,56,300/-. The case of the assessee Asst. Year : 2013-14 - 2– was selected for scrutiny assessment and thereafter the assessment was framed by the Assessing Officer u/s 143(3) of the Act, making Rs.17,92,747/- towards long-term capital gains by adopting a higher sale consideration based on a 30% share in land.

1 The brief facts relating to this issue are that the assessee, a co-owner of agricultural land, entered into a Development Agreement with M/s. Sahjanand Land Corporation for a total consideration of Rs.3,25,00,000/-, with his 30% share being Rs.97,50,000/-, and while he declared Long Term Capital Gain (LTCG) of Rs.77,00,000/- in AY 2013–14 and the remaining Rs.28,00,000/- in the subsequent year based on actual receipts, the Assessing Officer, relying on the Development Agreement and purchase deed executed during the relevant financial year indicating transfer of possession, treated the entire Rs.97,50,000/- as consideration received in AY 2013–14, resulting in an addition of Rs.17,92,747/- as LTCG.

2 Aggrieved by the order of the Assessing Officer, the assessee filed appeal before the Ld. CIT(A) who confirmed the addition made by the Assessing Officer.

3 Aggrieved by the order of the Ld. CIT(A), the assessee is now in appeal before the Tribunal.

Before us, Ld. AR submitted that the declaration of LTCG was made on an actual receipt basis, duly supported by ledger copies and builder confirmations. The Ld. AR submitted that although the Development Agreement was entered in FY 2012–13, the full consideration was not received in that year. The consideration of Rs.28,00,000/- was received and offered to tax in AY 2014–15, and exemption under Section 54EC was also claimed for investment made on 13.10.2013, within the permissible time limit. Asst. Year : 2013-14 - 3– 5. We have heard the rival contentions and perused the material available on record. It is an undisputable fact that the capital gains have been duly invested and is eligible for deduction u/s 54EC. Hence, no liability of tax arises in the case of the assessee.

In the result, appeal of the assessee is allowed.

अपीलाथ / The Appellant 2.  थ / The Respondent. 3. संबंिधतआयकरआयु / Concerned CIT 4. आयकरआयु(अपील) / The CIT(A)- 5. िवभागीयितिनिध, आयकरअपीलीयअिधकरण, अहमदाबाद/ DR, ITAT, Ahmedabad 6. गाड फाईल/ Guard file.