Shri Riddhishbhai B.Trivedi, Ahmedabad V. The CIT-III, Ahmedabad

ITA 1226/AHD/2013

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8697 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 8 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-01-2020
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 01-05-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: O P SHARMA
• Keywords: Capital asset; Assessment record; Right to appeal; Set aside; Capital Gains
• Section: 143(3); 54B

Judgement Text

, C IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER ./ I.T.A. NO. 1226/AHD/2013 & 651/AHD/2016 ( ASSESSMENT YEAR : 2008-09) RIDDHISH B. TRIVEDI 10, SBI SOC., OPP. MANEKBAUG HALL, AMBAWADI, AHMEDABAD / VS. COMMISSIONER OF INCOME TAX AHMEDABAD - III, AHMEDABAD ./ ./ PAN/GIR NO. : ACAPT7931P ( APPELLANT ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI HARDIK VORA, A.R. / RESPONDENT BY : SHRI O. P. SHARMA, CIT. D.R. DATE OF HEARING 25/10/2019 !'# / DATE OF PRONOUNCEMENT 17/01/2020 / O R D E R PER PRADIP KUMAR KEDIA - AM: THESE CAPTIONED APPEALS HAVE BEEN FILED AT THE INST ANCE OF THE ASSESSEE AGAINST THE RESPECTIVE ORDERS OF THE COMMI SSIONER OF INCOME TAX-3, AHMEDABAD (CIT IN SHORT) & COMMISSIONER OF INCOME TAX (APPEALS)-5, AHMEDABAD (CIT(A) IN SHORT), DATED 1 4.03.2013 & 26.10.2015 ARISING IN THE ASSESSMENT ORDER DATED 10 .03.2014 PASSED BY THE ASSESSING OFFICER (AO) UNDER S. 143(3) & UNDER S. 143(3) R.W.S. ITA NOS. 1226/AHD/13 & 651/AHD/16 [RIDDHISH B. TRIVEDI VS. CIT] A.Y. 2008-09 - 2 - 263, RESPECTIVELY OF THE INCOME TAX ACT, 1961 (THE ACT) CONCERNING AY 2008-09. 2. AS POINTED OUT AT BAR, THE ITA NO. 1226/AHD/2013 OF ASSESSEE CONCERNS CHALLENGE OF JURISDICTION 263 OF THE ACT R ELEVANT TO AY 2008- 09 WHEREAS ITA NO. 651/AHD/2016 CONCERNS CHALLENGE TO ADDITIONS/DISALLOWANCES IN THE SECOND ROUND OF QUAN TUM PROCEEDINGS BY THE AO PURSUANT TO REVISIONAL DIRECTIONS OF THE PR.CIT CHALLENGED IN ITA NO. 1226/AHD/2013(SUPRA). THUS, THERE EXIST S DISCERNABLE COMMON THREAD ON FACTUAL ASPECTS IN BOTH THE APPEAL S. CONSEQUENTLY, BOTH THE MATTERS WERE HEARD TOGETHER AND DISPOSED O F BY THIS COMMON ORDER. 3. TO BEGIN WITH, WE SHALL FIRST TAKE UP ITA NO. 12 26/AHD/2013 TO EVALUATE THE OBJECTION OF THE ASSESSEE TOWARDS LACK OF JURISDICTION OF THE PR.CIT ASSUMED UNDER S.263 OF THE ACT. 3.1 THE ASSESSEE IN THE PRESENT APPEAL HAS CHALLENG ED REVISIONAL JURISDICTION OF THE PR.CIT INVOKED UNDER S.263 OF T HE ACT WHEREBY THE ORDER OF THE AO UNDER S.143(3) OF THE ACT DATED 30. 09.2010 HAS BEEN IMPUGNED BY THE PR.CIT ON THE GROUNDS OF LACK OF IN QUIRY INTO CERTAIN VITAL ASPECTS CONCERNING ELIGIBILITY OF DEDUCTION C LAIMED UNDER S.54B OF THE ACT. 3.2 BRIEFLY STATED, THE ASSESSEE, AN INDIVIDUAL, HAS DERIVED INCOME INTER ALIA UNDER THE HEAD CAPITAL GAINS ON SALE OF CERTAIN LAND PARCELS HELD AS CAPITAL ASSET. THE RETURN FILED BY THE A SSESSEE FOR AY 2008- 09 IN QUESTION WAS SUBJECTED TO SCRUTINY ASSESSMENT AND CONSEQUENTLY ASSESSMENT ORDER WAS FRAMED UNDER S.143(3) OF THE A CT. THE AO COMPLETED ASSESSMENT AND ACCEPTED THE INCOME DECLAR ED AS PER RETURN OF INCOME AMOUNTING TO RS.54,61,040/- AS ASSESSED I NCOME WITHOUT ANY ADJUSTMENT. HOWEVER, ON VERIFICATION OF ASSESS MENT RECORDS, THE ITA NOS. 1226/AHD/13 & 651/AHD/16 [RIDDHISH B. TRIVEDI VS. CIT] A.Y. 2008-09 - 3 - PR.CIT FOUND THAT THE ASSESSMENT ORDER PASSED BY TH E AO TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. THE PR.CIT ACCORDINGLY INVOKED JURISDICTION CONFERRED UNDER S. 263 OF THE ACT TO SHOW CAUSE THE ASSESSEE ON ALLEGED INFIRMITY IN THE ASSESSMENT ORDER. THE SHOW CAUSE NOTICE UNDER S. 263 OF THE ACT IS RE PRODUCED HEREUNDER FOR EASE OF REFERENCE: 1. ON VERIFICATION OF YOUR CASE RECORD FOR THE A.Y . 2008-09, IT IS SEEN THAT THE ASSESSMENT ORDER DATED 30/09/2010 PAS SED BY THE AC1T CIRCLE-6, AHMEDABAD, U/S. 143(3) OF THE INCOME TAX ACT, 1961, DETERMINING INCOME OF RS. 54,61,040/-, IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE FOR THE REASONS MENTION ED IN THE SUBSEQUENT PARAGRAPHS. 2. ON VERIFICATION OF RECORDS IT IS SEEN .THAT YOU HAD SHOWN NET CAPITAL GAIN OF RS.1,38,99,515/-, ON SALE OF AGRICU LTURAL LAND, OUT OF WHICH, EXEMPTION OF RS.31,00,000/- WAS CLAIMED U/S. 54B, RS. 30,00,000/- U/S. 54 EC AND RS.31,56,870/- U/S. 54F. THUS, YOU CLAIMED A TOTAL EXEMPTION OF RS. 92,56, 870/-. ONE OF THE BASIC CONDITIONS FOR CLAIMING EXEMPTION U/S.54B IS THAT THE CAPITAL GAIN SHOULD HAVE ARISEN FROM THE T RANSFER OF LAND USED FOR AGRICULTURAL PURPOSES WHICH, IN THE TWO YEARS I MMEDIATELY PRECEDING THE DATE ON WHICH THE TRANSFER TOOK PLACE , WAS BEING USED BY THE ASSESSEE OR A PARENT OF HIS, FOR AGRICULTURAL P URPOSES. HOWEVER, FROM THE LAST PARA OF PAGE-3 OF SALE DEED RELATING TO YOUR ASSET, IT WAS NOTICED THAT YOU GOT NON-AGRICULTURAL PERMISSION ON 14/05/2007 FOR THE SAID LAND. THUS, THE LAND WAS A NON-AGRICULTURAL LA ND BEFORE THE DATE OF TRANSFER, WHICH TOOK PLACE ON 08/06/2007. AS THE BE NEFIT OF SECTION 54B IS ADMISSIBLE ONLY IN THE CASE WHERE THE LAND HAD B EEN USED FOR AGRICULTURE PURPOSE FOR THE TWO YEARS IMMEDIATELY P RECEDING THE DATE ON WHICH THE TRANSFER TOOK PLACE, YOU WERE NOT ENTI TLED FOR EXEMPTION U/S.54B. THUS, THE AMOUNT OF RS.31,00,000/- CLAIME D AS EXEMPTION U/S. 54B WAS REQUIRED TO BE DISALLOWED AND REQUIRED TO B E ADDED TO YOUR INCOME. THIS BEING NOT DONE, RESULTED IN UNDERASSES SMENT OF CAPITAL GAIN OF RS. 31,00,000/-, WITH CONSEQUENT SHORT LEVY OF TAX OF RS.9,13,198/-. 3. FURTHER, YOU DEPOSITED RS.31,00,000/- (UPTO 07/1 2/2007) IN A CAPITAL GAIN SAVINGS ACCOUNT OF ORIENTAL BANK OF CO MMERCE AND CLAIMED EXEMPTION U/S. 54B FOR THE AMOUNT SO DEPOSI TED. IT WAS NOTICED FROM THE ACCOUNT STATEMENT THAT YOU HAD WITHDRAWN A SUM OF RS.30,95,000/- ON 12/12/2007. AS PER PROVISIONS OF SECTION 54B, THE AMOUNT SO DEPOSITED IN THE CAPITAL GAIN SAVINGS ACC OUNT, HAS TO BE UTILIZED FOR THE PURCHASE OF NEW ASSET AND WITHIN T HE SPECIFIED PERIOD. IN YOUR CASE, THOUGH YOU HAD WITHDRAWN THE AMOUNT F ROM THE ACCOUNT, THERE WAS NO PROOF IN THE ASSESSMENT RECORDS TO ASC ERTAIN THAT THE AMOUNT WITHDRAWN WAS INVESTED IN THE SPECIFIED ASSE T I.E. PURCHASE OF ANY AGRICULTURAL LAND. THUS, OUT OF RS.31,00,000/- CLAIMED EXEMPT U/S.54B, RS.30,95,000/- WAS REQUIRED TO BE DISALLOW ED AND ADDED BACK ITA NOS. 1226/AHD/13 & 651/AHD/16 [RIDDHISH B. TRIVEDI VS. CIT] A.Y. 2008-09 - 4 - TO YOUR INCOME. THIS BEING NOT DONE, RESULTED IN UN DERASSESSMENT OF CAPITAL GAIN OF 30,95,000/- WITH CONSEQUENT SHORT L EVY OF LAX OF RS. 9,11,725/-. FROM THE DISCUSSION ABOVE, IT MAY BE SEEN THAT THE ASSESSMENT ORDER PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 ON 30/09/2010 FOR THE A.Y.2008-09 IS CLEARLY ERRONEOUS AND HENCE PREJ UDICIAL TO THE INTERESTS OF THE REVENUE. YOU ARE THEREFORE REQUEST ED TO SHOW CAUSE AS TO WHY ACTION U/S.263 OF THE INCOME TAX ACT, 1961 S HOULD NOT BE INITIATED FOR MODIFYING OR EVEN CANCELLING THE SAID ASSESSMENT ORDER. 3.3 THE PR.CIT, IN ESSENCE, RAISED TWO GROUNDS FOR INVOKING JURISDICTION UNDER S.263 OF THE ACT; (I) THE DEDUCT ION CLAIMED UNDER S.54B OF THE ACT HAS NOT BEEN PROPERLY EXAMINED BY THE AO AND THE DEDUCTION CLAIMED AMOUNTING TO RS.31 LAKHS UNDER S. 54B OF THE ACT HAS BEEN ALLOWED WITHOUT MEETING THE PRE-REQUISITES OF SECTION 54B OF THE ACT & (II) THE AMOUNT OF CAPITAL GAINS AMOUNTIN G TO RS.31 LAKHS CLAIMED AS EXEMPTION UNDER S.54B OF THE ACT HAS NOT BEEN KEPT DEPOSITED IN SPECIFIED CAPITAL GAINS ACCOUNTS SCHEM E AND THE AO HAS ALSO FAILED TO MAKE ANY PROPER INQUIRY IN THIS REGA RD. IT WAS THUS ALLEGED BY THE PR.CIT THAT THE AO HAS WRONGLY ALLOW ED THE CLAIM OF ASSESSEE UNDER S.54B OF THE ACT WITHOUT REQUISITE I NQUIRY. AFTER TAKING NOTE OF THE WRITTEN SUBMISSIONS MADE BY THE ASSESSEE IN ITS DEFENSE TO THE SHOW CAUSE NOTICE, THE PR.CIT OBSERV ED THAT THE ASSESSEE HAS NOT SOLD THE LAND WHICH WAS ACTUALLY U SED FOR AGRICULTURAL PURPOSE IMMEDIATELY BEFORE TRANSFER. THE LAND SOLD WAS ALLEGED TO BE A NON-AGRICULTURAL LAND AT THE TIME OF TRANSFER AND ACCORDINGLY, THE ASSESSEE WAS HELD AS NOT ELIGIBLE FOR DEDUCTION AVA ILABLE UNDER S.54B OF THE ACT. IT WAS ALLEGED BY THE REVISIONAL COMMI SSION THAT THE AO HAS NOT MADE ANY PERTINENT INQUIRY ON THE ISSUE AND PERFUNCTORILY ALLOWED DEDUCTION UNDER S.54B OF THE ACT. THE PR.C IT ACCORDINGLY DIRECTED THE AO TO DISALLOW THE CLAIM OF RS.31 LAKH S MADE UNDER S.54B OF THE ACT AND RECOMPUTE THE CHARGEABLE INCOM E OF THE ASSESSEE. 3.4 ON THE SECOND ISSUE, THE PR.CIT NOTED THE DEFEN SE OF THE ASSESSEE THAT THERE WAS NO WITHDRAWAL OF MONEY FROM THE CAPITAL GAIN ITA NOS. 1226/AHD/13 & 651/AHD/16 [RIDDHISH B. TRIVEDI VS. CIT] A.Y. 2008-09 - 5 - DEPOSITS SCHEME WHEN SEEN IN PERSPECTIVE. THE ASSE SSEE CLAIMED BEFORE THE PR.CIT THAT HE HAD DEPOSITED RS.31 LAKHS IN THE CAPITAL GAINS SAVING ACCOUNTS OF THE ORIENTAL BANK OF COMME RCE AND CLAIMED EXEMPTION UNDER S.54B OF THE ACT FOR THE AMOUNT SO DEPOSITED. A SUM OF RS.30,95,000/- HOWEVER WAS WITHDRAWN FROM DESIGN ATED ACCOUNT CAPITAL GAINS SAVING SCHEME TO CAPITAL GAIN DEPO SIT SCHEME. A CERTIFICATE WAS PLACED BEFORE THE PR.CIT TO VOUCH F OR SUCH ASSERTIONS. ON THESE FACTS, THE PR.CIT SET ASIDE THIS ASPECT TO THE FILE OF THE AO FOR RELEVANT INQUIRY IN THIS REGARD. THE ASSESSMEN T ORDER WAS ACCORDINGLY MODIFIED TO THE AFORESAID EXTENT. 3.5 AGGRIEVED BY THE REVISIONAL ACTION OF THE PR.CI T FOR MODIFICATION IN THE ASSESSMENT ORDER SO FRAMED AFTE R SCRUTINY, THE ASSESSEE PREFERRED APPEAL BEFORE THE TRIBUNAL AND C HALLENGED THE USURPATION OF REVISIONAL JURISDICTION BY THE PR.CIT . 3.6 IN ITS DEFENSE, THE LEARNED COUNSEL FOR THE ASS ESSEE SUBMITTED AT THE OUTSET THAT THE NECESSARY BACKGROUND FOR EXERCI SE OF REVISIONAL POWER OF PR.CIT DOES NOT EXIST IN THE INSTANT CASE. THE LEARNED COUNSEL REFERRED TO THE PROVISIONS OF SECTION 54B O F THE ACT AND CONTENDED THAT THE PROVISIONS OF SECTION 54B APPLIE D TO SALE OF LAND WHICH IS USED FOR AGRICULTURAL PURPOSE FOR A CERTAI N PERIOD. THE PROVISION DOES NOT REQUIRE THE SALE OF AN AGRICULTU RAL LAND PER SE . IT ONLY REQUIRES SALE OF LAND WHICH IS USED FOR AGRICU LTURAL PURPOSE. IN THIS BACKGROUND, THE LEARNED COUNSEL ADVERTED TO TH E FACTS AND CONTENTED THAT THE LAND SOLD WAS CULTIVATED WHICH I S REFLECTED IN COPY OF 7/12 SHOWING THAT THERE WAS A JAWAR CROP PRODU CED IN THE SAID LAND. TALATI CERTIFICATE WAS ALSO REFERRED TO SUPP ORT ITS CLAIM TOWARDS CULTIVATION. IT WAS THUS CONTENTED THAT LAND WAS U SED FOR AGRICULTURE PURPOSE PRIOR TO SALE AND SUBSTANTIAL AMOUNT WAS RE CEIVED AS ADVANCE AGAINST SALE WHILE THE LAND WAS USED FOR AGRICULTUR AL PURPOSES. THE LAND WAS CONVERTED INTO NON-AGRICULTURAL LAND ON 14 .05.2007 BY THE ITA NOS. 1226/AHD/13 & 651/AHD/16 [RIDDHISH B. TRIVEDI VS. CIT] A.Y. 2008-09 - 6 - POTENTIAL PURCHASER AFTER EXECUTION ON MOU (BANAKHA T) ON 15.02.2007. IT WAS CLAIMED THAT THE ASSESSEE HAD R ECEIVED RS.1,21,00,000/- PRIOR TO CONVERSION OF LAND INTO N ON-AGRICULTURAL LAND. THE SALE DEED WAS HOWEVER EXECUTED ON 08.06. 2007 AND THUS THE LAND WAS SOLD ONLY AFTER 24 DAYS FROM CONVERSION IN TO AND N.A. LAND. IT WAS THUS SUBMITTED THAT THE ASSESSEE DULY COMPLI ED WITH THE PRE- REQUISITES FOR CLAIM OF DEDUCTION UNDER S.54B OF TH E ACT AND CONSEQUENTLY THE ORDER OF ASSESSMENT IS NOT ERRONEO US ON THIS SCORE. 3.7 AS REGARDS THE SECOND ASPECT OF CLAIM MADE UNDE R S.54B OF THE ACT, THE ASSESSEE HARPED THAT CERTIFICATE FROM THE BANK FOR TRANSFER OF FUND FROM ONE ACCOUNT TO ANOTHER IS TESTIMONY TO FA CT THAT THE MONEY REMAINED DEPOSITED IN THE DESIGNATED ACCOUNT AND TH EREFORE THERE WAS NO BREACH OF CONDITION SPECIFIED UNDER S.54B(2) OF THE ACT. THE LEARNED COUNSEL ACCORDINGLY SUBMITTED THAT IN THE A BSENCE OF FULFILLMENT OF TWIN CONDITIONS OF THE ASSESSMENT OR DER BEING BOTH ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE, THE REVISIONAL POWERS COULD NOT BE INVOKED BY THE PR.CIT. 4. THE LEARNED DR, ON THE OTHER HAND, REFERRED TO P ARA 5 OF THE REVISIONAL ORDER AND SUBMITTED THAT NO INQUIRY WHAT SOEVER WAS MADE BY THE AO IN THE COURSE OF SCRUTINY ASSESSMENT ON T HE CORRECTNESS OF THE CLAIM MADE UNDER S.54B OF THE ACT AND EXEMPTION CLAIMED THEREON, IN COMPLETE DEFIANCE OF THE STATUTORY RESPONSIBILIT Y. IT WAS OBSERVED THAT THE DEPARTMENT HAS NO RIGHT TO FILE AN APPEAL AGAINST THE ORDER OF THE AO AND THUS THE PR.CIT WAS LEFT WITH NO RECOURS E EXCEPT TO INVOKE SUPERVISORY JURISDICTION CONFERRED ON HIM BY SECTIO N 263 OF THE ACT. 4.1 ADVERTING TO THE ISSUES INVOLVED, THE LEARNED D R VEHEMENTLY SUPPORTED THE CONCLUSION DRAWN BY THE PR.CIT AND SU BMITTED THAT ADMITTEDLY, THE LAND SOLD WAS NOT AN AGRICULTURAL L AND AT THE TIME OF TRANSFER. IT WAS FURTHER POINTED OUT THAT THE LAND IN QUESTION WAS A ITA NOS. 1226/AHD/13 & 651/AHD/16 [RIDDHISH B. TRIVEDI VS. CIT] A.Y. 2008-09 - 7 - FALLOW LAND WHICH MEANS NOTHING COULD BE PRODUCED ON SUCH LAND. THE LEARNED DR REFERRED TO THE CERTIFICATE ISSUED B Y THE TALATI DATED 28.02.2014 FROM THE PAPER BOOK FILED ON BEHALF OF T HE ASSESSEE TO CONFIRM SUCH OBSERVATION OF LAND BEING FALLOW. THE LEARNED DR FURTHER POINTED OUT THAT THERE WAS NO RELIABLE EVID ENCE PLACED ON RECORD TO SHOW THE ACTIVITY OF CULTIVATION ON THE L AND. IT WAS FURTHER POINTED OUT THAT ALTHOUGH THE LAND STOOD CONVERTED OFFICIALLY AS NON- AGRICULTURAL LAND ON 14.05.2007, IT IS COMMON KNOWL EDGE THAT THE PROCESS FOR CONVERSION TAKES ITS OWN TIME AND THE A PPLICATION FOR CONVERSION MUST HAVE BEEN MADE WELL IN ADVANCE. IT WAS FURTHER POINTED OUT THAT TOTAL CONSIDERATION AGREED FOR SAL E WAS RS.7,81,00,000/- WHEREAS THE ASSESSEE HAS ONLY RECE IVED RS.1,21,00,000/- AT THE TIME OF EXECUTION OF BANAKH AT AND REMAINING AMOUNT HAS BEEN NATURALLY RECEIVED ABOUT THE TIME O F EXECUTION OF SALE DEED ON WHICH DATE THE LAND WAS NEITHER AN AGRICULT URAL LAND NOR IT WAS USED OR CAPABLE OF BEING USED FOR AGRICULTURAL PURP OSES. 4.2 ADVERTING TO THE SECOND ASPECT, THE LEARNED DR SUBMITTED THAT IN THE ABSENCE OF ANY DOCUMENTARY EVIDENCE PLACED BEFO RE THE AO FOR MERE TRANSFER OF FUND FROM ONE ACCOUNT TO OTHER DES IGNATED ACCOUNT AS CLAIMED, THE PR.CIT WAS CORRECT IN SENDING MATTER B ACK TO THE FILE OF THE AO TO EXAMINE THIS ASPECT. THE LEARNED DR ACCO RDINGLY SUBMITTED THAT THE REVISIONAL ORDER OF THE PR.CIT DOES NOT CA LL FOR ANY INTERFERENCE IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 5. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSIO NS. SECTION 263 OF THE ACT CONFERS POWER UPON THE PR.CIT/CIT TO CALL FOR AND EXAMINE THE RECORDS OF A PROCEEDING UNDER THE ACT A ND REVISE AND ORDER IF HE CONSIDERS THE SAME TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE PR.CIT CAN TAKE RECOU RSE TO REVISION UNDER S.263 OF THE ACT WHERE THE ASSESSMENT ORDER I S ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE. IT IS W ELL SETTLED THAT TWIN ITA NOS. 1226/AHD/13 & 651/AHD/16 [RIDDHISH B. TRIVEDI VS. CIT] A.Y. 2008-09 - 8 - CONDITIONS ARE REQUIRED TO BE SPECIFIED SIMULTANEOU SLY. THE PR.CIT IN THE PRESENT CASE HAS PURPORTED TO ACT IN EXERCISE O F POWER UNDER S.263 OF THE ACT AND THEREBY HAS SOUGHT TO DISLODGE AND M ODIFY THE ASSESSMENT ORDER OF THE AO PASSED UNDER S.143(3) OF THE ACT. THE PR.CIT ESSENTIALLY OBSERVED THAT THE AO HAS WRONGLY ALLOWED THE DEDUCTION UNDER S.54B OF THE ACT IN CONTRAVENTION O F THE PROVISIONS OF THE ACT AND WITHOUT MAKING ANY REQUISITE INQUIRY ON THE FACTUAL ASPECTS. 5.1 IT IS THE CASE OF THE ASSESSEE THAT THE PRE-REQ UISITES OF SECTION 54B OF THE ACT HAVE BEEN COMPLIED WITH AND THERE IS NO CONTRAVENTION OF LAW IN THIS REGARD. CONTROVERSY HINGES AROUND AV AILABILITY OF DEDUCTION UNDER S.54B OF THE ACT AGAINST LONG TERM CAPITAL GAIN EARNED ON SALE OF LAND. ON A PERUSAL OF 54B OF THE ACT, I T IS NOTICED THAT SECTION 54B OF THE ACT IS DIVIDED INTO TWO PARTS. FIRST PART DEALS WITH EXEMPTION OF CAPITAL GAINS FROM TRANSFER OF LAND (O RIGINAL ASSET) USED FOR AGRICULTURAL PURPOSE IN THE TWO YEARS IMMEDIATE LY PRECEDING THE DATE ON WHICH THE TRANSFER TOOK PLACE. THE SECOND PART DEALS WITH THE MANNER OF UTILIZATION OF GAINS ARISING FROM TRANSFE R OF SUCH LAND USED FOR AGRICULTURAL PURPOSES. THE PR.CIT HAS IMPUGNED THE ELIGIBILITY OF DEDUCTION UNDER S.54B OF THE ACT IN BOTH THE PARTS. IT IS AN ADMITTED FACT THAT ON THE DATE OF TRANSFER OF LAND (WHICH IS BROADLY THE LEGISLATIVE EXPRESSION USED IN SECTION 54B OF THE A CT), THE LAND IN QUESTION WAS NEITHER AGRICULTURAL LAND NOR WAS USED FOR AGRICULTURAL PURPOSES. THE LAND HAS BEEN ADMITTEDLY DECLARED AS FALLOW LAND ON WHICH NO AGRICULTURAL PRODUCE IS PLAUSIBLE. THUS, AS PER THE CERTIFICATE OF TALATI AS PRODUCED BY THE ASSESSEE HIMSELF, THE VIABILITY OF CARRYING OUT AGRICULTURAL ACTIVITY WAS QUITE DISMAL. WE ALS O FIND THAT THE ASSESSEE HAS NOT DECLARED ANY WORTHWHILE AGRICULTUR AL INCOME IN THE EARLIER YEARS FROM SUCH A LARGE TRACK OF LAND (9286 SQ.MTR.). SOME EXPENSES VOUCHER PRODUCED FOR EXPENDITURE INCURRED ON TRACTOR DOES NOT INSPIRE ANY CONFIDENCE. SUCH MATERIAL WAS NOT P RODUCED BEFORE THE ITA NOS. 1226/AHD/13 & 651/AHD/16 [RIDDHISH B. TRIVEDI VS. CIT] A.Y. 2008-09 - 9 - LOWER AUTHORITIES AS WELL. THE ASSESSEE HAS FAILED TO ADDUCE ANY SATISFACTORY EVIDENCE THAT THE LAND WAS SUBJECTED T O ANY SYSTEMATIC AGRICULTURAL OPERATION IN LAST TWO YEARS IMMEDIATEL Y PRECEDING THE DATE OF TRANSFER AS REQUIRED IN LAW INDEED. THE REPLY O F THE ASSESSEE AND EVIDENCE RELIED THEREUPON APPEARS TO BE COSMETIC. THE AO HAS FAILED TO MAKE ANY INQUIRY ON THIS VITAL ASPECT WHILE ADMI TTING THE CLAIM OF THE ASSESSEE AND ALLOWED THE CLAIM SUMMARILY. THE PR.CIT IN OUR VIEW CORRECTLY APPRECIATED THE FACTS AND APPLIED THE LAW IN PERSPECTIVE TO DRAW AN ADVERSE CONCLUSION ON ELIGIBILITY OF DEDUCT ION. WE SEE NO ERROR IN THE CONCLUSION DRAWN BY THE PR.CIT TO HOLD THAT THE CLAIM UNDER S.54B OF THE ACT HAS BEEN ALLOWED WITHOUT FUL FILLMENT OF PRESCRIBED CONDITIONS. WE THUS DECLINE TO INTERFER E WITH THE REVISIONAL ORDER OF THE PR.CIT ON THIS SCORE. 5.2 NOTWITHSTANDING THAT CLAIM OF DEDUCTION UNDER S .54B OF THE ACT IS FOUND TO BE IN CONTRAVENTION WITH LAW AND THEREF ORE THE SECOND ASPECT OF THE ASSESSEE NEED NOT TO BE GONE INTO, WE WOULD HOWEVER DEAL WITH THE SECOND ASPECT OF CONTROVERSY AS WELL, FOR THE SAKE OF COMPLETENESS. 5.3 THE ASSESSEE CLAIMS TO HAVE TRANSFER AN AMOUNT OF RS.30,45,500/- FROM CAPITAL GAINS SAVING SCHEME T O CAPITAL GAIN DEPOSIT SCHEME ON SAME STIPULATIONS AND CLAIMS TO HAVE NOT DIVERTED THE MONEY FOR THE PURPOSES OTHER THAN SPECIFIED UND ER S.54B(2) OF THE ACT. HOWEVER, IT IS THE ADMITTED POSITION THAT NO EVIDENCE IN THIS REGARD WAS FILED BEFORE THE AO TO SUBSTANTIATE THE ASSERTIONS BEING MADE. THE AO HAS ACCEPTED THE CLAIM WITHOUT LOOKIN G INTO THIS ASPECT WHICH HAS DIRECT BEARING ON MAINTAINABILITY OF DEDU CTION. THE PR.CIT, IN THE CIRCUMSTANCES, HAS RIGHTLY REMITTED THE ISSU E BACK TO THE FILE OF THE AO FOR REQUISITE VERIFICATION ACTION OF PR.CIT HAS SHUNNED PREJUDICE TO REVENUE WITHOUT ANY PERCEPTIBLE PREJUD ICE TO ASSESSEE. WE SEE NO ERROR IN SUCH DIRECTION AND HENCE DECLINE TO INTERFERE. ITA NOS. 1226/AHD/13 & 651/AHD/16 [RIDDHISH B. TRIVEDI VS. CIT] A.Y. 2008-09 - 10 - 6. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IN I TA NO.1226/AHD/2013 IS DISMISSED. ITA NO. 651/AHD/2016 7. IN THE CAPTIONED APPEAL, THE ASSESSEE HAS CHALLE NGED THE QUANTUM ORDER PASSED BY THE AO UNDER S.143(3) OF THE ACT PU RSUANT TO REVISIONAL ORDER PASSED UNDER S.263 OF THE ACT WHIC H IS SUBJECT MATTER OF APPEAL IN ITA NO.1226/AHD/2013. 8. AS PER THE GROUNDS OF APPEAL, THE ASSESSEE HAS C HALLENGED THE ACTION OF THE CIT(A) IN CONFIRMING THE DISALLOWANCE OF RS.31 LAKHS CLAIMED UNDER S.54B OF THE ACT AS WELL AS DISALLOWA NCE OF BROKERAGE OF RS.3,12,500/-. 8.1 THE FACTS CONCERNING THE ISSUE HAVE BEEN RECORD ED WHILE DEALING WITH THE REVISIONAL ACTION OF THE PR.CIT IN ITA NO. 1226/AHD/2013. AS NOTED IN ITA NO. 1226/AHD/2013 (SUPRA), THE INGR EDIENTS OF SECTION 54B OF THE ACT WERE FOUND TO REMAIN UNFULFI LLED BY THE ASSESSEE. THE ASSESSEE COULD NOT DEMONSTRATE THAT THE LAND WAS SUBJECTED TO AGRICULTURAL ACTIVITY BEFORE THE DATE OF TRANSFER OF LAND IN QUESTION. THEREFORE, IN OUR VIEW, THE AO AS WELL A S CIT(A) HAS RIGHTLY DEALT WITH THE ISSUES AND APPLIED THE LAW I N CORRECT PERSPECTIVE. WE DO NOT FIND ANY FORCE IN THE CLAIM OF THE ASSESS EE FOR ELIGIBILITY OF DEDUCTION UNDER S.54B OF THE ACT ON CAPITAL GAINS A RISING FROM SALE OF THE LAND IN QUESTION. 8.2 THE AO IN SECOND ROUND OF PROCEEDINGS PURSUANT TO SECTION 263 OF THE ACT HAS, HOWEVER, ALSO DISALLOWED BROKERAGE OF RS.3,12,500/- WHICH IS NOT SEEN TO BE EMANATING FROM THE DIRECTIO N GIVEN BY THE PR.CIT UNDER S.263 OF THE ACT. IN THE SECOND ROUND OF PROCEEDINGS, THE AO WAS GOVERNED BY THE REVISIONAL ORDER OF THE PR.CIT AND IN VIEW ITA NOS. 1226/AHD/13 & 651/AHD/16 [RIDDHISH B. TRIVEDI VS. CIT] A.Y. 2008-09 - 11 - OF THE SPECIFIC DIRECTIONS GIVEN THEREIN, THE AO CO ULD NOT EXPAND THE SCOPE OF INQUIRY WHILE PASSING THE ORDER UNDER S.14 3(3) R.W.S. 263 OF THE ACT. THEREFORE, THE AO WAS IN ERROR IN MAKING DISALLOWANCE OF RS.3,12,500/- TOWARDS BROKERAGE IN THE SECOND ROUND OF PROCEEDINGS. THE AO HAS CLEARLY TRAVELLED BEYOND THE SCOPE OF IN QUIRY UNDER S. 263 OF THE ACT GUIDED TO HIM BY THE PR.CIT. THE ACTION OF THE CIT(A) CONFIRMING THE ADDITION IS THEREFORE SET ASIDE AND THE AO IS DIRECTED TO DELETE THE DISALLOWANCE OF BROKERAGE AMOUNTING TO R S.3,12,500/-. 8.3 IN VIEW OF THE ABOVE DISCUSSION, APPEAL OF THE ASSESSEE IN ITA NO.651/AHD/2016 IS PARTLY ALLOWED. 9. IN THE COMBINED RESULT, APPEAL OF THE ASSESSEE I N ITA NO.1226/AHD/2013 IS DISMISSED WHEREAS ASSESSEES AP PEAL IN ITA NO.651/AHD/2016 IS PARTLY ALLOWED. SD/- SD/- (MAHAVIR PRASAD) (PRADIP KUMAR KE DIA) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD: DATED 17/01/2020 TRUE COPY S. K. SINHA !'#' / COPY OF ORDER FORWARDED TO:- &. / REVENUE 2. / ASSESSEE (. )*+ , / CONCERNED CIT 4. ,- / CIT (A) /. 012 33*+4 *+#4 56) / DR, ITAT, AHMEDABAD 7. 289 : / GUARD FILE. BY ORDER / 4 /5 *+#4 56) THIS ORDER PRONOUNCED IN OPEN COURT ON 17/01/2020