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Income Tax Appellate Tribunal, “B”
Before: SHRI S.S.VISWANETHRA RAVI, JUDICIAL
PER DR. DIPAK P. RIPOTE, AM: This appeal filed by the Assessee is directed against the order of ld.Commissioner of Income Tax(Appeals)-9, Pune dated 15.10.2019for the A.Y. 2013-14under section 250 of the Income Tax Act, 1961(in short “the Act”). The Assessee has raised the following grounds of appeal:
“1. On the facts and in circumstances of the case and in law the learned A.O. erred in not treating the land as agriculture land by disregarding appellant’s contention and thereby further erred in denying exemption claimed u/s 54B for sum of Rs.55,46,892/-. Your appellant prays for appropriate relief.”
Brief facts of the case are that the assessee sold a land along his family members admeasuring 80 H.75R situated at Yewlewadi, Tal.
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Havel, Dist Pune. Out of the total consideration of Rs.9,60,00,000/-, the assessee’s share was of Rs.56,00,000/-. The assessee purchased another agricultural land by investing Rs.58,30,000/-. The assessee claimed in the return of income that the assessee is eligible for deduction under section 54B, as assessee sold agricultural land purchased agricultural land. The Assessing Officer(AO) arrived at the conclusion that the land sold was not agricultural land as it falls under Urban Land classified as ‘R Zone Land’. In the assessment order, in para 4.7 the AO mentioned that from entry in 7/12 extract prima-facie no agricultural activity is found to be carried out. Therefore, the AO denied the assessee’s claim for 54B deduction. Aggrieved by the order of the AO, the assessee filed appeal before the ld.CIT(A)-9, Pune. The ld.CIT(A) upheld the assessment order.
Aggrieved by the same, the assessee filed appeal before this Tribunal.
The ld.Authorised Representative(ld.AR) of the assessee filed paper books. The ld.AR explained that assessee along with his family members sold their ancestral land vide registered sale deed dated 03.09.2012. The copy of the said sale deed was enclosed at page no.3 to 23 of the paper book. The ld.AR invited our attention to para 2 of the said registered sale deed in which the impugned land was described as agricultural land and it was mentioned that the ITA No.56/PUN/2020 for A.Y. 2013-14 Shri Tushar Jagmohan Kamthe [A]
owners of the land were cultivating the land. The ld.AR took us through the copies of the 7/12 extract which were filed at page no.45, 46, 47 & 48 of the paper book. He specifically invited our attention to 7/12 extract pertaining to land admeasuring 40 R(page 46 of the paper book) to explain that in the said 7/12 extract under the head “Crop” cereals have been mentioned. The other 7/12 extracts under the head “Crop” were showing “पड”. The ld.AR submitted that this entire land has been sold which was cultivated by the assessee and his family members. Since the land was used for agricultural purpose and assessee has purchased another agricultural land as per section 54B assessee is eligible for deduction. The ld.AR relied upon the following case laws:
“01. Bombay High Court : 196 Taxman 230 CIT vs. Smt Debie Alemao
Bombay High Court : 12 Taxman 201 CIT Vs. H.V.Mungale
Pune Tribunal: 141 taxmann.com 252 ACIT vs. Renaissance Cultivation LLP
Pune Tribunal: 103 taxmann.com 166 Murtuza Shabbir
Supreme Court: 70 Taxman 301 Smt. Sarifabibi Mohmed Ibrahim Vs. CIT.”
The ld.Departmental Representative(ld.DR) for the Revenue heavily relied on the orders of the Lower Authorities. The ld.DR submitted that there are four 7/12 extracts which means there are four pieces of lands which have been sold by the assessee and his family
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members by common sale deed. Out of this four pieces of land, only one land as per 7/12 has shown as “Crop” “Cereals”. All other three 7/12 shows the land as “पड”. Therefore, the ld.DR submitted that assessee is not eligible for 54B deduction.
We have heard both sides and perused the records. On perusal of the registered sale deed dated 03.09.2012 (paper book, page no.3 to 33) it is observed that assessee along with 40 family members mentioned in the sale deed have sold the land at Survey No.33, Hissa 7A, Area 20R, Survey No.33, Hissa 7C, Area 40R, Survey No.33, Hissa 7C/1, Area 03R, Survey No.33,Hissa 9/1, Area 20R; totally admeasuring 80 H.75R situated at Yewlewadi, Tal. Havel, Dist Pune. Along with the registered sale deed, copies of the four 7/12 extracts were enclosed. Thus, it is a fact that there are four different pieces of lands having independent Survey Numbers and independent 7/12 extracts for each land. The 7/12 extracts mention following names as owners of the land: A) Survey Number 33 Hiss number 7A : 20R Prabhakar Mahadeo Kamthe Jagmohan Mahadeo Kamthe Jaiwant Mahadeo Kamthe Yashwant Mahadeo Kamthe Jaising Mahadeo Kamthe Status of Land - “पड”
ITA No.56/PUN/2020 for A.Y. 2013-14 Shri Tushar Jagmohan Kamthe [A]
B) Survey Number 33 Hiss 7C : 40R Prabhakar Mahadeo Kamthe Jagmohan Mahadeo Kamthe Jaiwant Mahadeo Kamthe Yashwant Mahadeo Kamthe Jaising Mahadeo Kamthe Status of Land Cultivated
C) Survey Number 33 Hiss Number 7C/1: 1R Prabhakar Mahadeo Kamthe Jagmohan Mahadeo Kamthe Jaiwant Mahadeo Kamthe Yashwant Mahadeo Kamthe Jaising Mahadeo Kamthe Status of Land “पड”िवहीर
D) Survey Number 33 Hiss Number 9/1: 20R Jaising Mahadeo Kamthe Status of land - “पड”
Thus, though the family of the appellant have sold these lands by one registered sale deed, actually these are four different pieces of land as evident from the 7/12 extract. On perusal of these 7/12 extracts, it is observed that only one 7/12 extract(page no.46 of the paper book) for Survey No.33, Hissa No.7C admeasuring 40R was shown to have been cultivation of Cereals for the two previous years. The said 7/12 extract was issued by Talati on 25.06.2012. All other three 7/12 extracts have classified the land as “Barren/Fallow”(पड). Thus, out
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of the total land of 80 H.75R, only 40R was used for cultivation. We have already held that there are four different survey numbers having four different 7/12 extracts, hence, these are four different lands. Only one land was cultivated. Section 54B is reproduced as under: 73[Capital gain on transfer of land used for agricultural purposes not to be charged in certain cases. 7454B. 75[(1)] 76[Subject to the provisions of sub-section (2), where the capital gain arises] from the transfer of a capital asset being land which, in the two years immediately preceding the date on which the transfer took place, was being used by 77[the assessee being an individual or his parent, or a Hindu undivided family] for agricultural purposes 78[(hereinafter referred to as the original asset)], and the assessee has, within a period of two years after that date, purchased any other land for being used for agricultural purposes, then, instead of the capital gain being charged to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,— (i) if the amount of the capital gain is greater than the cost of the land so purchased (hereinafter referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be reduced, by the amount of the capital gain.] 79[(2) The amount of the capital gain which is not utilised by the assessee for the purchase of the new asset before the date of furnishing the return of income under section 139, shall be deposited by him before furnishing such return [such deposit being made in any case not later than the due date applicable in the case of the assessee for furnishing the return of income under sub-section (1) of section 139] in an account in any such bank or institution as may be specified in, and utilised in accordance with, any scheme80 which the Central Government may, by notification in the Official Gazette, frame in this behalf and such return shall be accompanied by proof of such deposit; and, for the purposes of sub-section (1), the amount, if any, already utilised by the assessee for the purchase of the new asset together with the amount so deposited shall be deemed to be the cost of the new asset : Provided that if the amount deposited under this sub-section is not utilised wholly or partly for the purchase of the new asset within the period specified in sub-section (1), then,— (i) the amount not so utilised shall be charged under section 45 as the income of the previous year in which the period of two years from the date of the transfer of the original asset expires; and (ii) the assessee shall be entitled to withdraw such amount in accordance with the scheme aforesaid.
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Thus, to avail the deduction under section 54B of the Act, the assessee has to show that the land was used for agricultural purpose in the immediate two preceding years. In this case, as mentioned above, only land at Survey No.33, Hissa No.7C was used for cultivation in the two preceding years. Other three lands were not used for cultivation as seen from the 7/12 extract. Therefore, assessee will be eligible for deduction under section 54B only with respect to land at Survey No.33, Hissa No.7C admeasuring 40R.
The Hon’ble Bombay High Court’s in the case of CIT vs. Smt. Debbile Alemao [2011] 196 Taxman 230 (Bombay) has held as under : “The Assessing Officer has noted that the said land was entered in the revenue record as an agricultural land, i.e., garden or orchard. The ITAT also held that the land was recorded in the revenue records as an agricultural land. This is not disputed by the revenue. It is however contended that the land was not actually used for agriculture inasmuch as no agricultural income was derived from this land and was not shown by the respondents in their Income-tax return. This was explained by the respondents by saying that there were coconut trees in the land but the agricultural income derived by sale of the coconuts was just enough to maintain the land and there was no actual surplus. Hence, no agricultural income was shown from this land. In our opinion, if an agricultural operation does not result in generation of surplus that cannot be a ground to say that the land was not used for the agricultural purpose. It is not disputed that the land was shown in the revenue record to be used for agricultural purpose and no permission was ever obtained for non-agricultural use by the respondents. Section 30 of the Goa, Daman and Diu Land Revenue Code, 1968 provides that no land used for agriculture shall be used for any non-agricultural purpose and no land assessed for one non-agricultural purpose shall be used for any other non-agricultural purpose except with the permission of the Collector. Section 32 of the Goa, Daman and Diu Land Revenue Code prescribes the procedure for conversion of use of land from one purpose to another including conversion from agricultural purpose to non- agricultural purpose. The permission for non-agricultural use was obtained for the first time by the Varca Holiday Beach Resort Private Limited the purchaser after it purchased the land. Thus, the finding
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recorded by the two authorities below that the land was used for the purpose of agriculture is based on appreciation of evidence and by application of correct principles of law. The Tribunal has relied upon two unreported decisions of this Court in CIT v. Minguel Chandra Pais/Smt. Maria Leila Tovar Furtado[20061 282 ITR 6181 which involved identical issue. In those appeals, this Court has upheld the order of the Tribunal holding that the land was agricultural land and its sale did not invite the payment of capital gain. It is not disputed before us that the facts of the said cases were similar to the facts of the present case. We are bound by the decision in those cases.])”
Thus, the Hon’ble High Court (supra) has relied on the Revenue records to hold the land as agricultural land. In the case under consideration, as discussed above, we have also relied on the revenue records i.e. 7/12 extracts. Therefore, we hold that the assessee is eligible for deduction under section 54B only for the land at Survey No.33, Hissa No.7C admeasuring 40R. The AO is directed to re-compute the deduction u/s 54B accordingly. Accordingly, appeal of the assessee is partly allowed.
In the result, appeal of the assessee is Partly Allowed. Order pronounced in the open Court on 1st November, 2022. (S.S.VISWANETHRA RAVI) ACCOUNTANT MEMBER पुणे / Pune; "दनांक / Dated : 1st Nov, 2022/ SGR* आदेशक""ितिलिपअ"ेिषत / Copy of the Order forwarded to : अपीलाथ" / The Appellant.
""यथ" / The Respondent.
The CIT(A), concerned.
The Pr. CIT, concerned. िवभागीय"ितिनिध, आयकर अपीलीय अिधकरण, “बी” ब"च, 5. पुणे / DR, ITAT, “B” Bench, Pune. गाड"फ़ाइल / Guard File.
ITA No.56/PUN/2020 for A.Y. 2013-14 Shri Tushar Jagmohan Kamthe [A]
आदेशानुसार / BY ORDER, //// Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.
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