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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: MS. SUCHITRA KAMBLE & SHRI BHAGIRATH MAL BIYANI
This appeal is filed by the assessee against the order dated 20.01.2020 passed by the Ld. CIT-(Appeals), Ujjain, Madhya Pradesh for A.Y. 2011-12.
The grounds of appeal
raised by the assessee read as under: “Reg. Claim of exemption u/s. 54B of the Act:
1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) has erred in confirming the action of Ld. AO of denying the exemption u/s. 54B of the Income Tax Act, 1961 by stating that the land is not used for agricultural purposes. The same is wrong and contrary to the facts of the case.
2. The Ld. CIT (A) has erred in confirming the action of Ld. AO of denying the exemption u/s. 54B of the Income Tax Act, 1961 without considering the Order of Ld. CIT(A), Ujjain dated 18.03.2019 in the Wealth Tax Appeal of the assessee wherein the Ld. CIT(A), Ujjain has clearly stated that the assessee had carried out agricultural activities on its land. Not considering the same is wrong and contrary to the facts of the case and provisions of the Act.
Ravi Prakash Langer vs. ACIT Asst.Year –2011-12 - 2 – Reg. Reopening of Assessment u/s. 147 of the Act 3. On the facts and in the circumstances of the case and in law, the Ld. AO has erred in reopening the assessment and the Ld. CIT(A) has erred in confirming the same without appreciating that the assessment has been reopened without any fresh tangible material and reopening the assessment without any fresh tangible material is liable to be quashed.
4. On the facts and in the circumstances of the case and in law, the Ld. AO has erred reopening the assessment and the Ld. CIT(A) has erred in confirming the same without appreciating that the assessment has been reopened merely on the basis of information received from the investigation wing and without application of mind and doing so is wrong and contrary to the facts of the case and provisions of the Act and the reassessment proceedings are liable to be quashed.
5. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in confirming and the Ld. AO has erred in reopening the assessment without appreciating that all the true and complete disclosure as required by the Ld. AO were made during the course of assessment proceedings u/s. 143(3).
6. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in confirming and the Ld. AO has erred in reopening the assessment and the reasons assigned for doing so are incorrect and against the provisions of the Act.
7. On the facts and in the circumstances of the case and in law, the Ld. AO has obtained the approval u/s. 151 of the Act in a mechanical manner. The same is wrong and contrary to the provisions of the Act and the notice u/s. 148 of the Act is invalid and liable to be quashed. The appellant craves leave to add, amend or withdraw any of the ground of appeal on or before the date of hearing.”
3. Based on AIR information notice under Section 148 was issued after recording proper reasons to believe and subsequently notice under Section 148 was issued on 23.03.2016 which was duly served to assessee. In response to notice under Section 148 assessee submitted his original return of income filed on 30.09.2011 declaring total income of Rs. 96,62,340/-. The Assessing Officer observed that the assessee sold lands survey no. 31, 32, 37,38 measuring to a total of 2.57 hectares situated at village Karadia/Navakheda, Tehsil and District Ujjain for a total sale consideration of Rs. 3,01,00,000/- on 30.09.2010. The assessee has invested the proceeds of capital gain into capital gain fixed deposit as well as purchased agricultural land at Village- Narwar, Indore Road, Ujjain and Village Ramvasa, Indore Road, Ujjain. The reason for issuance of notice under Section 148 was AIR information pertaining to the Ravi Prakash Langer vs. ACIT Asst.Year –2011-12 - 3 – said transaction. The assessee claimed deduction amounting to Rs. 1,97,69,795/- on the said transaction under Section 54B of the Act. During the assessment proceedings the assessee through its representative submitted copies of registered purchase deeds, copy of land record, capital account and ledger account for F.Y. 2010-11. The assessee also submitted the vouchers as regards the sale of agricultural produce and two receipts of Agricultural Produce Marketing Committee (in short “APMC”) pertaining to Rs. 18,909/- and Rs. 22,500/-. The Assessing Officer made disallowance of Rs. 1,97,69,795/- under Section 54B as the assessee could not substantiate the same with valid documentary proof / vouchers.
Being aggrieved by the assessment order the assessee filed appeal before the CIT(A). The CIT(A) dismiss the appeal of the assessee.
The Ld. A.R. submitted that the assessee is proprietor of M/s. Langer Auto Sales & Service deriving income from sale of petroleum through petrol pump. The Ld. A.R. submitted that as relates to Ground No. 7 the assessee is challenging the re-assessment itself as the approval was obtained on 21.03.2016 and the reasons were recorded on 23.03.2016 and therefore, the reopening itself is bad in law. The Ld. A.R. further submitted that the assessment was reopened without any fresh tangible material. The assessment has been reopened nearly on the basis of information received from Investigation Wing and there was no tangible material taken into account by the Assessing Officer.
The Ld. D.R. submitted that the draft reasons and the subsequent reasons have been taken into account the approval issued by the appropriate
Ravi Prakash Langer vs. ACIT Asst.Year –2011-12 - 4 – authority and therefore, the reasons were properly recorded and there is no lapse on the part of the Department.
We have heard both the parties and perused all the relevant material available on record. The reasons were properly recorded and there was no discrepancy pointed by the assessee in respect of recording the reasons. Mere technical issue and approval taken prior to reasons is also not justifiable as the authorities have taken proper course. Therefore, Ground Nos. 3 to 7 are dismissed.
As regards the merits of the case in respect of Ground Nos. 1 & 2, the Ld. A.R. submitted that the land is used for agricultural purpose and denying the exemption under Section 54B is not justifiable. The Ld. A.R. relied upon the order of CIT(A), Ujjain dated 18.03.2019 in the Wealth Tax Appeal of the assessee wherein the CIT(A), Ujjain clearly stated that assessee had carried out agricultural activity on its land. The Ld. A.R. further submitted that the registered sale deed mentions that the land sold is irrigated and there was a detail of cultivation given under the land records to both the authorities that is CIT(A) as well as Assessing Officer. The Ld. A.R. submitted that From No. B-1, B-2 and patwary extract before the Assessing Officer as well as CIT(A) and the same was not taken into account by the authorities. The Ld. A.R. further submitted that the copy of sale invoices was related to the Soyabean produce and that is the only receipts given by the Agricultural Produce Marketing Committee. The Ld. A.R. submitted that in respect of agricultural produce of Amla, Mango, Cheeku, Nimbu and Guava the same cannot be produced as the same was sold at the outskirts of land itself and transaction was in cash. The Ld. A.R. further submitted that the observation of the Assessing Officer that the produce was minisque is not appropriate as the land
Ravi Prakash Langer vs. ACIT Asst.Year –2011-12 - 5 – was properly irrigated and there was Soyabean produce as well. Though it was not a commercially cultivated land yet the agricultural land and its demarcation was properly mentioned in the land records. The Ld. A.R. relied upon the decision of Indore Tribunal in case of Sunil Sojatia and Prabhat Sojatia vs. ACIT (ITA No. 310 & 312/Ind/2015 dated 23.10.2018), decision of Pune Tribunal in case of Murtuza Shabbir Jamnagarwala vs. ITO (ITA No. 1144/Pune/2016 order dated 08.02.2019). The Ld. A.R. also relied upon the decision of Hon’ble Apex Court in case of ACIT vs. ICICI Securities Primary Dealership Ltd. 348 ITR 0299, ITO vs. Tech Span India Pvt. Ltd. & Anr. order dated 24.04.2018.
The Ld. D.R. relied upon the assessment order and the order of the CIT(A). The Ld. D.R. submitted that no Form No. B-1, B-2 was submitted before the Assessing Officer as well as before the CIT(A). The Ld. D.R. relied upon decision of Hon’ble Gujarat High Court in case of CIT vs. Siddharth J. Desai 139 ITR 628 as well as the decision of Pune Tribunal in case of Abhijit Subhash Gaikwad vs. DCIT 259/70 SOT 429.
We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that from the sale deed as well as the land records the assessee has clearly set out that the land was related to agricultural land only. This fact was also ascertain by the order of CIT(A), Ujjjain in respect of assessee’s Wealth Tax matter and it is a confirmed case that the land was actually agricultural land. As per Section 54B where the capital gain arises from the transfer of capital asset being land which is in the two years immediately preceding the date on which the transfer took place was being used by the assessee being a individual and purchase any other land being used for agricultural purpose, then, in respect of the capital gain being
Ravi Prakash Langer vs. ACIT Asst.Year –2011-12 - 6 – 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. Here the element of land being used for agricultural purpose was never disputed, therefore, the CIT(A) as well as the Assessing Officer ignoring the land records as well as Form No. B-1, B-2 and the decision in assessee’s own case by the Wealth Tax matter where the land was held as agricultural land and the same has totally ignored the by the Revenue. Therefore, disallowance of claim of exemption under Section 54B of the Act was not justifiable. Hence, Ground Nos. 1 & 2 of the assessee’s appeal is allowed.
In the result, the appeal of the assessee is partly allowed.
Order pronounced on 16/01/2023 by placing the result on the Notice Board as per Rule 34(4) of the Income Tax (Appellate Tribunal) Rule, 1963. This Order pronounced in Open Court on /01/2023 Sd/- Sd/- Sd/- Sd/- (BHAGIRATH MAL BIYANI) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad; Dated 16/01/2023 TANMAY, Sr. PS TRUE COPY आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent. 3. संबं�धत आयकर आयु�त / Concerned CIT 4. आयकर आयु�त(अपील) / The CIT(A)- 5. �वभागीय ��त�न�ध, आयकर अपील य अ�धकरण,इंदौर/ DR, ITAT, Indore 6. गाड& फाईल / Guard file.