KIRAN RAJESH BHANSALI,,AHMEDNAGAR vs. INCOME-TAX OFFICER,, AHMEDNAGAR

This appeal by the assessee against the order dated 30-01-2017 passed by the Commissioner of Income Tax (Appeals)-2, Pune [‘CIT(A)’] for assessment year 2012-13.

The ld. AR submits that the assessee is not interested to prosecute ground No. 1. Accordingly, the same is dismissed as not pressed.

The assessee raised alternate ground to ground No. 1 questioning the action of CIT(A) in confirming the order of AO in denying deduction u/s. 54B of the Act.

Heard both the parties and perused the material available on record. We note that the assessee is an individual and derives income from sale and purchase of interior decoration material and interest income. During the year under consideration, the assessee sold agricultural land on 23-12- 2011. The assessee having 60% share in the said property and purchased agricultural land for Rs.1,48,32,440/- by way of three sale deeds of Rs.75,80,000/- on 27-03-2012, Rs.25,62,440/- on 19-08-2012 and Rs.46,90,000/- on 11-09-2012. The AO allowed benefit of deduction u/s. 54B to an amount of Rs.75,80,000/- vide purchase deed dated 27-03- 2012, but, however, denied deduction to other two amounts by holding that the said properties purchased after due date of furnishing return of income u/s. 139(1) of the Act. Accordingly, he disallowed above said two amounts. The CIT(A) confirmed the same.

Before us, the ld. AR submits that the application of provisions u/s. 139 does not arise at all as it was only for deposit of capital gain but not for investment and he argued that the assessee purchased three parcels of agricultural land on three occasions, the latest being on 11-09-2012 is within the stipulated time as required u/s. 54B of the Act. The assessee filed the entire purchase details before the AO and the AO discussed the same in the assessment order. He argued that the AO and the CIT(A) did not consider the provisions u/s. 54B of the Act by denying deduction to the lands purchased on 19-08-2012 and 11-09-2012. The ld. AR drew our attention to the order of this Tribunal in the case of Uddhav Krishna Bankar Vs. ITO reported in 121 taxmann.com 53 (Pune-Trib.) by referring Para No. 10 of the said order, he submits that the assessee in the present case utilized the sale consideration within the stipulated period of two years from the date of sale of agricultural land on 23-12-2011. He prayed to allow deduction u/s. 54B of the Act. The ld. DR relied on the order of CIT(A).

We note that admittedly, the assessee sold his share of 60% on 23- 12-2011. In order to get the deduction u/s. 54B of the Act the assessee should make investments within two years of the said date. The AO in its order at Page No. 8 discussed the dates of purchase of another agricultural land being on 23-12-2012, 09-08-2012 and 11-09-2012 which clearly shows the assessee invested the 60% of sale consideration, his share invested in purchasing new agricultural land by way of three sale deeds within stipulated time i.e. two years which is not disputed by the Revenue. Coming to the order of this Tribunal in the case of Uddhav Krishna Bankar (supra) by placing reliance in the case of Venkata Dilip Kumar Vs. CIT reported in 419 ITR 298 of Hon’ble High Court of Madras which held that the requirement of depositing in the capital gain account scheme u/s. 54(2) is directory. If the amount is utilized within the stipulated period of two/three years, there can be no denial of exemption u/s. 54 of the Act. In the present case as discussed above that the assessee sold his 60% share in the original agricultural land on 23-12-2011 and invested the said 60% share by purchasing new agricultural land by way of three sale deeds latest being 11-09-2012, which, in our opinion, is well within the stipulated period of two years from the date of original transfer. Therefore, the assessee satisfied the stipulated period by way of investment and there can be no denial of exemption u/s. 54B of the Act. Thus, the impugned order is not justified and the alternate ground to ground No. 1 is allowed.

The alternate ground to ground Nos. 2 and 3 raised by the assessee challenging the action of CIT(A) in not considering additional evidences in respect of agricultural income in the facts and circumstances of the case.

Heard both the parties and perused the material available on record. The AO observed that the assessee has shown agricultural income of Rs.82,700/- in the Balance sheet, however, no claim was made in the return of income. On being asked to submit details in respect of agricultural income the AO held the assessee never furnished the details of agricultural income as called for, accordingly, an amount of Rs.82,700/- was added. The CIT(A) discussed the same in Para No. 5 of the impugned order. The assessee filed extract of 7/12, crops cultivated and receipts of sale proceeds of agricultural etc. as additional evidences before the CIT(A). The CIT(A) held that the assessee filed additional evidences outside the specified circumstances under Rule 46A and refused to admit the same. The ld. AR prayed to remand the issue to the file of CIT(A) for its fresh adjudication as the assessee is not produced all the details relating to the agricultural income for the reason the said details were with the person who sold the agricultural produce in the APMC and also for the reason that the assessment proceedings were conducted at the fag end of year in which the assessment has to be completed. The ld. DR relied on the order of CIT(A). We note that the additional evidences filed by the assessee before the CIT(A) comprises of 7/12 extract which discloses the land holding and the other details of crops cultivated and receipts of sale proceeds were remained with the person who looks after day to day affaires of the agricultural activities, which in our opinion beyond the control of assessee. Accordingly, we remand the issue to the file of CIT(A) for its fresh adjudication. The assessee is liberty to file evidences, if any, in support of its claim. Thus, the alternate ground to ground Nos. 2 and 3 raised by the assessee are allowed for statistical purpose.

In the result, the appeal of assesse is allowed for statistical purpose.