MOHAMMAD RAFIQAHEMAD SAHEB KOKANI,,NASHIK vs. INCOME-TAX OFFICER, WARD - 1(3),, NASHIK

Since the identical facts and issues are involved in both the appeals, we proceed to dispose of the same vide this common order.

For the sake of clarity and convenience, the facts relevant for the appeal in ITA No.168/PUN/2019 for A.Y. 2014-15 are stated herein.

Briefly, the facts of the case are as under: The appellant is an individual engaged in the business of purchase and sale of lands. The appellant had filed return of income for the assessment year 2014-15 on 31.03.2015 declaring total income of Rs.3,50,400/- and agricultural income of Rs.3,08,000/-. Against the said return of income, assessment was completed by the Assessing Officer vide order dated 21.12.2016 passed u/s 143(3) of the Act at a total income of Rs.78,02,540/-. While doing so, the Assessing Officer made addition of Rs.71,52,133/- disallowing the claim for deduction of amount u/s 54B of the Act.

The factual matrix of the case is as under: During the previous year relevant to the present assessment year, the appellant had sold the agricultural land situated at Gat No.276-

Being aggrieved by the order of CIT(A), the appellant is in appeal before us. It is submitted before us that it is not necessary that the agricultural land sold should be long term capital asset. There is no significance between the short term capital gain and long term capital gain in the context of provisions of section 54B. The only condition is that the land sold should be used for agricultural purposes in two years, which does not mean that the land should be used for agricultural purposes for whole period of two years as viewed by the Assessing Officer. In this connection, he placed reliance on the decisions of Co-ordinate bench in the cases of Majid Khan Nisar Khan vs. ITO (2017) 59 ITR (Trib) 68 (Pune), Ramesh Narhari Jahadi vs. ITO (1992) 41 ITD (Pune) 368 and Rajendra Bastimal Chordiya vs. ITO in ITA No.1295/PUN/2017, order dated 07.06.2019. As regards other contention of Assessing Officer that no

On the other hand, learned Sr.DR placing reliance on the orders of lower authorities submitted that no interference is called for.

We have heard the rival contentions and perused material on record. The issue in the present appeal relates to the exemption under the provisions of section 54B of the Act. The conditions prescribed to claim the benefit of exemption under the provisions of section 54B are that the agricultural land sold as a capital asset, used by the assessee during the period of two years immediately preceding the date of transfer for agricultural purpose. The Assessing Officer had denied the exemption u/s 54B on the grounds that the agricultural land sold was not used for agricultural purpose for two years preceding the date of sale as the same was held only for a period of 22 months and some part of the land was used for growing grass. The Co-ordinate bench of the Tribunal in the case of Majid Khan Nisar Khan vs. ITO (supra) and Ramesh Narhari Jakhadi vs. ITO (supra) held that the reference to the term “two years” has been interpreted to mean that not during the whole period of two years, even if the land is used for some days in the earlier year, it would be sufficient for compliance of the provisions of section 54B of the Act. Similarly, the fact that part of the land could not be used for agricultural purpose but grass was grown owing to the conditions of drought does not disentitle the assessee as the land was held for agricultural purposes only. In the light

The facts and issues involved in ITA No.169/PUN/2019 are similar to the facts and issues involved in ITA No.168/PUN/2019. Therefore, the decision rendered in ITA No.168/PUN/2019 shall apply mutatis mutandis to ITA No.169/PUN/2019.

In the result, both the appeals filed by the assessee are allowed.