Shri Amit Ashok Mutha, Ahmednagar V. Deputy Commissioner of Income-tax, Ahmednagar

ITA 1380/PUN/2011

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5301 (ITAT-PUNE)
• Duration Of Justice: 6 year(s) 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-07-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 05-03-2018
• Assessment Year: 2006-2007
• Appeal Filed On: 09-11-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MUKESH JHA
• Assessee Lawyers: HARI KRISHAN
• Keywords: Benefit of exemption
• Section: 54B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, PUNE . , , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO . 1380 /P U N/201 1 / ASSESSMENT YEAR : 20 06 - 07 SHRI AMIT ASHOK MUTHA, 83, MANIKNAGAR, NAGAR PUNE ROAD, AHMEDNAGAR PAN : AFVPM3566P ....... / APPELLANT / V/S. THE D Y. COMMISSIONER OF INCOME TAX, AHMEDNAGAR CIRCLE, AHMEDNAGAR / RESPONDENT ASSESSEE BY : S HRI HARIKRISHAN REVENUE BY : SHRI MUKESH JHA / DATE OF HEARING : 18 - 07 - 201 8 / DATE OF PRONOUNCEMENT : 20 - 0 7 - 201 8 / ORDER PER VIKAS AWASTHY, JM : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMI SSIONER OF INCOME TAX (APPEALS) - I, PUNE DATED 17 - 02 - 2011 FOR THE ASSESSMENT YEAR 20 06 - 07. 2. THE BRIEF FACTS OF THE CASE AS EMANATING FROM RECORDS ARE : THE ASSESSEE IS REAL ESTATE AGENT/DEALER. THE ASSESSEE IN ITS RETURN OF INCOME 2 ITA NO . 1380/PUN/2011, A.Y. 2006 - 07 FOR THE IMPUGNED ASSESSMENT YEAR DECLARED LONG TERM CAPITAL GAINS OF RS.25,22,427/ - ON ACCOUNT OF SALE OF AGRICULTURAL LAND AND CLAIMED EXEMPTION U/S. 54B OF THE ACT ON ENTIRE CAPI TAL GAINS. THE ASSESSING OFFICER REJECTED ASSESSEES CLAIM OF EXEMPTION U/S. 54B AS THE ASSESSEE FAILED TO SHOW AGRICULTURAL ACTIVITIES WERE BEING CARRIED OUT BY THE ASSESSEE OR HIS PARENTS IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE ON WHICH LAND WAS TRANSFERRED. THE ASSESSING OFFICER IN THE ASSESSMENT ORDER INTER ALIA MADE ADDITION OF RS.25,22,427/ - AFTER DISALLOWING ASSESSEES CLAIM U/S. 54B OF THE ACT. AGGRIEVED BY THE ASSESSMENT ORDER DATED 23 - 12 - 2008, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF INCOME TAX (APPEALS) VIDE IMPUGNED ORDER UPHELD THE FINDINGS OF ASSESSING OFFICER IN RESPECT OF DISALLOWANCE OF ASSESSEES CLAIM U/S. 54B OF THE ACT. NOW, THE ASSESSEE IS IN SECOND APP EAL BEFORE THE TRIBUNAL ASSAILING THE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN REJECTING ASSESSEES ELIGIBILITY FOR CLAIMING EXEMPTION U/S. 54B AND AGAINST CONFIRMING THE ADDITION OF RS.39,067/ - U/S. 69A OF THE ACT. 3. SHRI HARIKRISHAN APPEAR ING ON BEHALF OF THE ASSESSEE SUBMITTED AT THE OUTSET THAT HE IS NOT PRESSING GROUND NO. 3 RAISED IN THE APPEAL WITH RESPECT TO ADDITION OF RS.39,067/ - U/S. 69A OF THE ACT. 3.1 IN RESPECT OF GROUND NOS. 1 AND 2 RELATING TO DISALLOWANCE OF EXEMPTION U/S. 54B , THE LD. AR SUBMITTED THAT THE ASSESSEE HAD SOLD THREE PARCELS OF AGRICULTURAL LAND AND HAD EARNED LONG TERM CAPITAL GAINS OF RS.25,22,427/ - . ADMITTEDLY, THE ASSESSEE OR HIS PARENTS DID NOT PERFORM ANY AGRICULTURAL ACTIVITIES ON THE LAND AS THERE WAS NO SOURCE OF IRRIGATION. 3 ITA NO . 1380/PUN/2011, A.Y. 2006 - 07 THE AUTHORITIES BELOW FAILED TO APPRECIATE THE FACT THAT SCARCITY OF WATER WAS THE PRIME REASON FOR NOT CARRYING OUT AGRICULTURAL ACTIVITIES . 4. ON THE OTHER HAND SHRI MUKESH JHA REPRESENTING THE DEPARTMENT VEHEMENTLY DEFENDED T HE FINDINGS OF COMMISSIONER OF INCOME TAX (APPEALS) IN REJECTING ASSESSEES CLAIM OF EXEMPTION U/S. 54B OF THE ACT. 5. W E HAVE HEARD THE SUBMISSIONS MADE BY REPRESENTATIVES OF RIVAL SIDES AND HAVE PERUSED THE ORDERS OF AUTHORITIES BELOW . TO CLAIM THE BENEFIT OF EXEMPTION U/S. 54B ONE OF THE MANDATORY CONDITION IS THAT THE ASSESSEE OR HIS PARENTS MUST HAVE PERFORMED AGRICULTURAL ACTIVITIES ON THE LAND IN THE TWO YEARS IMMEDIATELY PRECEDING THE DATE ON WHICH SUCH LAND IS TRANSFERRED. IN THE INSTANT CASE , IT IS AN ADMITTED FACT THAT NO AGRICULTURAL ACTIVITIES WERE PERFORMED BY THE ASSESSEE OR HIS PARENTS ON THE LAND IN THE PERIOD OF TWO YEARS IMMEDIATELY BEFORE THE DATE OF SALE. THE SOLITARY REASON GIVEN BY THE ASSESSEE FOR NOT PERFORMING AGRICULTURAL AC TIVITIES ON THE LAND IS SCARCITY OF WATER. WE DO NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE . EVEN IF THERE WAS NO IRRIGATION FACILITY AVAILABLE THROUGH WELL, CANAL ETC., THE ASSESSEE COULD HAVE AT LEAST MADE AN EFFORT TO CARRY OUT AGRICULTURAL ACT IVITIES DURING MONSOON SEASON. THE ASSESSEE HAS NOT BROUGHT ON RECORD ANY DOCUMENT TO INDICATE THAT THE LAND IN QUESTION WAS HIT BY DROUGHT IN THE RELEVANT TWO YEARS PERIOD. 6. THE COMMISSIONER OF INCOME TAX (APPEALS) REJECTED ASSESSEES CLAIM BY OBSER VING AS UNDER : HOWEVER, SO FAR AS THE REQUIREMENT OF AGRICU LTURAL ACTIVITY FOR ALLOWING THE DEDUCTION U/S 54B IS CONCERNED, IT IS SEEN THAT THE SAME IS A VALID OBJECTION MANDATED BY LAW. SECTION 54B REQUIRES THAT THE CAPITAL GAINS ARISING OUT OF THE SALE OF LAND HAS TO HAVE BEEN USED BY THE ASSESSEE OR HIS PARENTS FOR AGRICULTURAL PURPOSES IN AT LEAST IMMEDIATE TWO PRECEDING YEARS AND THE INVESTMENT IN LAND REQUIRED TO BE MADE FOR CLAIMING THIS DEDUCTION HAS TO BE 4 ITA NO . 1380/PUN/2011, A.Y. 2006 - 07 USED FOR AGRICULTURAL PURPOSES. THE ASSESSING OFFICER HAS FOUND WITH EVIDENCES THAT NO AGRICULTURAL ACTIVITY HAS BEEN CARRIED OUT BY THE APPELLANT IN RESPECT OF THE LAND SOLD AS WELL AS THE LAND PURCHASED AND THEREFORE, HE HAS COR RECTLY APPLIED THE LAW IN RAISING THIS OBJECTION. THE APPELLANT DURING APPEAL HAS SUBMITTED THAT IT IS NOT POSSIBLE TO CARRY OUT AGRICULTURAL ACTIVITY ON THE LANDS IN QUESTION AS THERE IS NO FACILITY OF POWER AND WATER AVAILABLE THERE. HOWEVER, I N MY CONS IDERED OPINION THIS ARGUMENT IS NOT OF ANY RELEVANCE BECAUSE WHAT IS TO BE EXAMINED AND INSURED IS THAT THE AGRICULTURAL ACTIVITY HAS BEEN CARRIED OUT OR NOT. EVEN IF A LAND IS CAPABLE OF AGRICULTURAL ACTIVITY AND NO SUCH ACTIVITY HAS BEEN CARRIED OUT, THE LAW DOES NOT ALLOW THE SAID LAND TO BE ELIGIBLE FOR DEDUCTION U/S 54B. ON THE ABOVE ISSUE THEREFORE, I FIND THAT THE ASSESSING OFFICER WAS CORRECT AND IN VIEW OF THE ABOVE, DEDUCTION DENIED BY THE ASSESSING OFFICER IS HELD TO BE CORRECT. GROUND NO. 2 THER EFORE, IS DISMISSED. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS). ACCORDINGLY, GROUND NOS. 1 AND 2 RAISED IN THE APPEAL BY THE ASSESSEE ARE DISMISSED. 7. IN GROUND NO. 3 OF THE APPEAL THE ASSESSEE HAS ASSAILED ADDITION OF RS.39,067/ - MADE U/S. 69A OF THE ACT. THE LD. AR OF THE ASSESSEE STATED AT THE BAR THAT HE IS NOT PRESSING GROUND NOS. 3. ACCORDINGLY, THE SAME IS DISMISSED AS NOT PRESSED. 8. THE GROUND NO. 4 IS GENERAL IN NATURE, HENCE, REQUIRES NO ADJUD ICATION. 9. IN THE RESULT, THE APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON FRIDAY, THE 20 TH DAY OF JU LY , 201 8 . SD/ - SD/ - ( . /D. KARUNAKARA RAO ) ( / VIKAS AWASTHY) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE; / DATED : 20 TH JU LY , 2018 RK 5 ITA NO . 1380/PUN/2011, A.Y. 2006 - 07 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - I, PUNE 4. / THE CIT - I, PUNE 5. , , , / DR, ITAT, B BENCH, PUNE. 6. / GUARD FILE. / / // TRUE COPY// / BY ORDER, / PRIVATE SECRETARY, , / ITAT, PUNE