BARENDRA NATH DEY,KOLKATA V. A.C.I.T.(OSD), WARD - 53(1), KOLKATA, KOLKATA

ITA 1552/KOL/2024

AI Insights

The case revolves around the denial of a deduction claimed under section 54B of the Income Tax Act by the assessee, Barendra Nath Dey, for the Assessment Year 2015-16. The assessee had claimed a deduction of \\u20b91,44,11,882 for the capital gains arising from the sale of agricultural land. The Assessing Officer (AO) initially denied this claim due to insufficient evidence of agricultural activities on the land. The Commissioner of Income Tax (Appeals) upheld the AO's decision, leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal, after reviewing the evidence, including sale and purchase agreements, and certificates from the Gram Panchayat, concluded that the land was indeed used for agricultural purposes, thus reversing the lower authorities' decisions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 25381 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJA SENGUPTA
• Assessee Lawyers: SIDDHARTH AGARWAL
• Keywords: Set aside; Capital Gains
• Section: 143(3); 131; 54B

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No.1552/KOL/2024 (Assessment Year: 2015-16) Barendra Nath Dey C/o Subash Agarwal & Associates, Siddha Gibson, 1, Gibson lane Suite 213, 2nd Floor, Kolkata-700069 West Bengal Vs. ACIT (OSD), Ward 53-1 169 A.J.C. Bose Road, Bamboo villa, 2 nd Floor, Kolkata-700014 West Bengal (Appellant) (Respondent) PAN No. ADEPD9685K Assessee by : Shri Siddharth Agarwal, AR Revenue by : Shri Raja Sengupta, DR Date of hearing: 13.03.2025 Date of pronouncement : 17.03.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 24.06.2024 for the AY 2015-16. 02. The only issue raised by the assessee is against the order of ld. CIT (A) upholding the order of ld. AO, wherein the benefit claimed u/s 54B of the Act of ₹1,44,11,882/- was denied to the assessee. 03. The facts in brief are that the assessee filed the return of income on 07.09.2015, declaring total income of ₹11,88,110/-. The case of the assessee was selected through Computer Assisted Scrutiny Selection Page | 2 ITA No.1552/KOL/2024 Barendra Nath Dey; A.Y. 2015-16 (CASS) and statutory notices were duly served upon the assessee along with questionnaire. The case of the assessee was selected for limited scrutiny for the reasons comprising cash deposits, purchase of property and deduction claimed under the head capital gains. The ld. AO during the course of assessment proceedings, found that the assessee claimed deduction of ₹1,44,11,882/-u/s 54B of the Act. Accordingly, the assessee was asked to furnish the supporting evidences which were furnished by the assessee on 25.07.2017, furnishing the purchase/ sale deeds of the properties. The assessee submitted before the ld. AO the proof of the agricultural land having not been sold and also the proof of the agricultural activities carried on the said land during the preceding two years immediately prior to the date of sale of this land. Even the person to whom the land was given for cultivation was called u/s 131 of the Act and his statement was recorded in which he admitted that he was cultivating the said land and handing over the half of the produce to the assessee. The ld. AO however, noted that the assessee has furnished undated agreement with Mr. Samir Bodhak, in support of his agricultural activities. According to the ld. AO the assessee did not furnish the details of Mr. Samir Bodhak, nor any particular date was mentioned n the agreement. Thereafter, the ld. AO noted that the assessee has not even produced the original agreement with Mr. Samir Bodhak and finally held that the assessee has failed to furnish the details of agricultural activities on the said land and thus, rejected the claim u/s 54B of the Act, thereby disallowing the deduction claimed of ₹1,44,11,882/- in the assessment framed u/s 143(3) of the Act dated 18.12.2017. 04. In the appellate proceedings, he ld. CIT (A) dismissed the appeal of the assessee by noting that the ld. AO has recorded a clear-cut Page | 3 ITA No.1552/KOL/2024 Barendra Nath Dey; A.Y. 2015-16 finding in the assessment order as well as in the remand report that assessee has failed to substantiate any agricultural activities on the said land. In para 7, the ld. CIT (A) noted that there was no compliance to the summon issued u/s 131 of the Act by Mr. Samir Bodhak and therefore, the claim of the assessee could not be verified. 05. After hearing the rival contentions and perusing the materials available on record, we find that the assessee owned an agricultural land which was sold during the instant year and claimed the capital gain u/s 54B of the Act. The assessee even furnished the sale and purchase agreements. The assessee also before us submitted a copy of agreement with the care taker of land and application requesting the AO to supply a copy of deposition of the care taker, which was recorded u/s 131 of the Act. Whereas on the other hands, the ld. AO denied that the care taker of the land did not appear and so the statement u/s 131 of the Act could not be recorded. Thereafter, the assessee also furnished the certificate from Gram Panchayat dated 19.09.2016, a copy of whivh is available at page no. 116, valuation report dated 26.10.2017 issued by DVO at page no. 122 to 126 and extract of East Kolkata Wetlands Manual, copy of which is produced at page no. 127 to 130 of the Paper Book.We observe from the examination of the above documents that the assessee has furnished all the evidences before the authorities below, substantiating that the piece of land was used by agricultural operation for two years immediately before the date of sale. We observe from the perusal of the above records, that the land was bearing fruit trees such as; mango, papaya, guava, jackfruit, olive, litchi, cashew, carambola (star fruit), and banana trees, even the certificate from Gram Panchayat, copy of which is available at page no. 117 revealed that description of Trade is Syamalima Nursery. Therefore, considering all the evidences Page | 4 ITA No.1552/KOL/2024 Barendra Nath Dey; A.Y. 2015-16 on record, we are not in concurrence to the conclusion drawn by the ld. CIT (A) on this issue and accordingly, set aside the order of ld. CIT (A) and direct the ld. AO to allow the deduction u/s 54B of the Act to the assessee as claimed by holding that the land was being used for agricultural operation during the period of two year prior to the date of sale. 06. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 17.03.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 17.03.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to : 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata "