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Income Tax Appellate Tribunal, DELHI BENCH “G”: NEW DELHI
Before: SHRI H.S.SIDHU & SHRI PRASHANT MAHARISHI
O R D E R PER PRASHANT MAHARISHI, A. M. 1. This is an appeal filed by the assessee against the order of the ld CIT(A), Ghaziabad dated 02.03.2017 for the Assessment Year 2012-13. 2. The assessee has raised the following grounds of appeal:- “Ground No. 1 1.1 The ld CIT(A) has erred both in facts and in law in confirming the disallowing of deduction of Rs. 1422250/- claimed by the appellant under the provisions of section 54B of the Income Tax Act, 1961. 1.2 The ld CIT(A) has erred in facts in holding that the agricultural land sold by the appellant was not used for agricultural purposes.
2. Ground No. 2 2.1 The ld CIT(A) has erred both in facts and in law in confirming partial disallowance of deduction claimed by the appellant under the provisions of section 54F of the Income Tax Act. Page | 1 Viney Singh Vs. DCIT, SA No. 463/Del/2017 (Assessment Year: 2012-13) 2.2 That the ld CIT(A) has erred both in facts and in law in not allowing deduction under section 54F of the Act in relation to sum of Rs. 350000/- paid by the appellant on 05.07.2011 for purchase of new residential house. 2.3 The ld CIT(A) has erred both in facts and in law in not allowing deduction under section 54F of the Act in relation to the whole of the sum of Rs. 2050000/- deposited by the appellant in the capital gains savings account before the due date for filing of return of income for AY 2012-13. 2.4 The ld CIT(A) has erred both in facts and in law in restricting deduction under section 54F of the Act only to a sum of Rs. 329100/- purportedly being money spent out of the capital gain saving account for purchase of new residential house.”
Brief facts of the case is that the assessee is an individual who filed his return of income on 24.08.2012 declaring income of Rs. 8145963/-. This return was revised on 22.08.2013 at Rs. 17084550/-.
During the year the assessee has sold two plots of agricultural land for Rs. 7257500/- and also purchased agricultural land for Rs. 1422250/-. The assessee has also invested Rs. 11.50 lacs in residential house on 8.11.2010 and also repaid housing loan. The total investment claimed in was residential house of Rs. 3808297/-. On sale of the agricultural land deduction u/s 54B on purchase of agricultural land and deduction u/s 54F of Rs. 2386047/- for purchase of residential house property was claimed. Assessee has also deposited Rs. 2050000/- in capital gain account scheme. Therefore, out of the sale consideration assessee deducted the cost of acquisition of Rs. 116973/- resulting into long term capital gain of Rs. 7140527/-. From this it claimed deduction u/s 54B of Rs. 1422250/- and deduction u/s 54F of Rs. 2386047/- and deposited Rs. 20.50 lacs in capital gain account scheme and offered total taxable long term capital gain of Rs. 1282230/-. The ld Assessing Officer held that as the land sold was not used for agricultural purposes and as the assessee has not filed any documentary evidence whether the land was used for agricultural purposes, he denied deduction u/s 54B of Rs. 1422250/-. Further, and further he reduced the amount invested for purchase of house the purpose of deduction u/s 54F. He further held that the amount of deposits in capital gain account scheme of only Rs. 329100/- would be allowable. Consequently, he made an addition of Rs. 3880324/- to the total income of the assessee and assessed at Rs. 20967874/- vide order u/s 143(3) of the Act dated 20.03.2015. The assessee preferred appeal before the ld CIT(A), where part relief was granted and assessee is in appeal before us.
The ground No. 1 is with respect to deduction u/s 54B of the Act of Rs. 1422250/-.
The ld AR relied on the submission made before the ld Assessing Officer as well as the ld CIT(A), whereas the ld DR relied upon the order of the lower authorities.
The issue involved in the present case is that whether the land sold to the assessee on 16.08.2011 was an agricultural land or not. According to the sale deed the above property Viney Singh Vs. DCIT, SA No. 463/Del/2017 (Assessment Year: 2012-13) was agricultural land, however, as assessee could not substantiate that it was used for the purpose of agriculture the deduction was denied. Before us the assessee submitted the details of agricultural land used for agricultural purposes at page No. 316 of the paper book. However, the ld CIT(A) has held that Fasil year 1415,1416 and 1417 submitted by the assessee does not show any cultivation as all the columns against this piece of land have been stuck off. However, the statement submitted before us at page No. 316 does not refer for Fasil year 1415. However, in Fasil year 1416 and 1417 the assessee has shown that Kharif crop of Jwar chara, Rabi crop of potato is taken and the assessee has tubewell for carrying on agricultural activities. Further, assessee has given the agricultural record of Tehsil for July 2008 to June 2011 to support his contention. Above facts submitted before us are not disputed by the ld DR. The above agricultural record produced before us does show at least with respect to Fasil year 1416, 1417 and 1418 the details of agricultural produce. In view of this it is apparent that land sold by the assessee shown in the sale deed was an agricultural land and further in view of the evidences produced by the assessee of agricultural produce for the relevant period which is not controverted by revenue then, assessee is eligible for deduction u/s 54B of the Act as the capital asset being land which was used for the agricultural purposes for specified number of years. In the result ground No. 1 of the appeal of the assessee is allowed.
Ground No. 2 of the appeal is with respect to deduction u./s 54F of Rs. 6.50 lacs paid by the appellant for purchase of new residence. The assessee has deposited a sum of Rs. 6.50 lacs on 05.07.2011, however due to clerical error the appellant has shown this figure at Rs. 704772/-. Further, the assessee could not point out the exact payment about this whether related to the acquisition of house. Therefore, we do not find any infirmity in the order of the lower authorities. Hence, the claim of the assessee u/s 54F to the extent of Rs. 650000/- has rightly been rejected.
In the same ground assessee stated that it has deposited a sum of Rs. 20.50 lacs in capital gain account scheme however, the ld Assessing Officer has granted deduction of only Rs. 329100/-. The claim of the Assessing Officer that assessee has failed to utilize from the capital gain account in the residential house property during the stipulated time. According to the assessee, appellant opened the account on 27.07.2012 with a sum of Rs. 1000/- and further Rs. 20.49 lacs was deposited on 30.07.2012, the ld AO did not grant the deduction because during the specified period the sum utilized by the assessee was only Rs. 329100/-. The assessee has relied upon the decision of the Hon’ble Allahabad High Court in case of Ranjit Narang Vs. CIT 317 ITR 332 wherein, it has been held that if the amount deposited is not utilized for the purposes of acquisition in the house property then such shortfall shall be