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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -16, Chennai, dated 22.05.2017, and pertains to assessment year 2013-14. The assessee has also filed cross-objection in respect of the same order of the CIT(Appeals). Therefore, we heard both, the appeal and the cross-objection together and disposing of the same by this common order.
The only issue arises for consideration is claim of exemption under Section 54B of the Income-tax Act, 1961 (in short 'the Act').
Shri AR.V. Sreenivasan, the Ld. Departmental Representative, submitted that the assessee sold a land within the city limit and claimed deduction under Section 54B of the Act on the ground the land transferred was agricultural land. According to the Ld. D.R., the Adangal extract and other documents said to be obtained from the Village Administrative Officer cannot conclude that the land in question is agricultural land. Moreover, the Assessing Officer has not examined whether there is any investment made by the assessee for the purpose of claiming exemption under Section 54B of the Act. Therefore, according to the Ld. D.R., the CIT(Appeals) is not justified in allowing the claim of the assessee.
On the contrary, Shri R. Chandramouli, the Ld. representative for the assessee, submitted that admittedly the land in question is situated within the city limit, therefore, it is a capital asset. According to the Ld. representative, the assessee used the land for cultivation, therefore, it was claimed as agricultural land.
According to the Ld. representative, the sale proceeds were invested in purchasing another agricultural land, hence, the CIT(Appeals) has rightly found that the assessee is eligible for deduction under Section 54B of the Act. On a query from the Bench, when the Assessing Officer found that the assessee only advanced money for purchasing land at Connoor, and no material is available on record to suggest that the assessee, in fact, purchased the land, how the assessee claims that the land was purchased?
The Ld. representative clarified that the assessee admittedly invested in agricultural land and is ready and willing to produce copies of documents for examination.
We have considered the rival submissions on either side and perused the relevant material available on record. The assessee claims that the property, which is situated within the Corporation of Chennai, was used for cultivation. From material available on record it appears that the assessee planted some coconut trees in the land in question. The assessee has also produced copies of Adangal extract to establish that the land was used for cultivation.
The Adangal extract otherwise known as Village Account No.2 was maintained by the Village Administrative Officer in the regular course of performing his official function. The Village Administrative Officer being the field level officer, has a duty to record the cultivation in Village Account No.2 / Adangal extract.
To establish the cultivation, the only document available is the Adangal extract. Therefore, the Adangal extract cannot be brushed aside so lightly when the assessee produced the same to establish his case that the land in question was used for agricultural activities. Moreover, the Assessing Officer has not examined whether the assessee invested the money and actually purchased the property as claimed. A reference about the advance given by the assessee was found in the assessment order. However, there was no reference about the purchase of property. The assessee now claims that he is ready and willing to produce the copy of sale deed before the Assessing Officer. Therefore, this Tribunal is of the considered opinion that the Assessing Officer shall re-examine the issue afresh. Accordingly, the orders of both the authorities below are set aside and the entire issue of claim of deduction under Section 54B of the Act is remitted back to the file of the Assessing Officer. The Assessing Officer shall re-examine the matter afresh in the light of the material that may be produced by the assessee and thereafter decide the issue afresh in accordance with law, after giving a reasonable opportunity to the assessee.
The assessee has filed cross-objection only to support the order of the CIT(Appeals). Therefore, the cross-objection becomes infructuous.
In the result, the appeal filed by the Revenue is allowed for statistical purposes and the cross-objection filed by the assessee stands dismissed.
Order pronounced on 28th December, 2017 at Chennai.