ACIT, Faridabad V. Sh Dinesh Verma, Faridabad

ITA 1413/DEL/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74269 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 01-01-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 01-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ASHIMA NEB
• Keywords: Capital asset; Opportunity of being heard; Additional evidence; Benefit of exemption
• Section: 54B; 10; 54

Judgement Text

ITA 1413 & 1808/DEL/2010 DINESH VERMA IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI T.S. KAPOOR ITA NO. 1413/DEL/2010 ASSTT. YR: 2006-07 ACIT, CIRCLE-II, VS. SH. DINESH VERMA, FARIDABAD. HOUSE OF TAXMAN, 1A/121 NIT FARIDABAD (NOW) 781, SECTOR-15A, FARIDABAD. PAN: AAHPV 0799 A AND ITA NO. 1808/DEL/2010 ASSTT. YR: 2006-07 SH. DINESH VERMA, VS. ACIT, CIRCLE-II, HOUSE OF TAXMAN, 1A/121 NIT FARIDABAD. FARIDABAD (NOW) 781, SECTOR-15A, FARIDABAD. ( APPELLANT ) ( RESPONDENT ) ASSESSEE BY : SHRI SALIL AGARWAL ADV. RESPONDENT BY : MS. ASHIMA NEB SR. DR O R D E R PER R.P. TOLANI, J.M: : THESE ARE CROSS APPEALS, FILED BY THE ASSESSEE AS W ELL AS THE REVENUE, AGAINST THE ORDER OF CIT(A), FARIDABAD DATED 09-0 2-2010 RELATING TO A.Y. 2006-07. AT THE TIME OF HEARING, ASSESSEE CHOSE NOT TO PRESS HIS APPEAL. ACCORDINGLY, ASSESSEES APPEAL STANDS DISMISSED BEI NG NOT PRESSED. 2. THE REVENUES APPEAL RAISES FOLLOWING GROUNDS OF APPEAL: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN ENTERTAININ G THE 2 ADDITIONAL EVIDENCE AS PER RULE 46A OF INCOME TAX R ULES EVEN THOUGH A NUMBER OF OPPORTUNITIES WERE PROVIDED TO P RODUCE THE EVIDENCE IN SUPPORT OF ITS CLAIM AND INSPITE OF THI S THE ASSESSEE FAILED TO DO SO. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN ALLOWING EX EMPTION U/S 54B OF THE INCOME TAX ACT, 1961 EVEN THOUGH THE ASS ESSEE WAS NOT ENTITLED TO THE CLAIM OF EXEMPTION U/S 54B AS T HE ASSET SOLD WAS NOT A LONG TERM CAPITAL ASSET BUT A SHORT TERM CAPITAL ASSET AND HAS FAILED TO FURNISH EVIDENCE TO SHOW THAT THE LAND WAS BEING USED TWO YEARS IMMEDIATELY PRECEDING THE DATE ON WHICH THE TRANSFER TOOK PLACE FOR AGRICULTURAL PURPOSE AN D IS IN CONTRARY TO THE CBDT CIRCLE NO. 495 DATED 22-09-198 7. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E, THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DELETING TH E ADDITION OF RS. 60,000/- MADE BY THE ASSESSING OFFICER ON ACCOU NT OF LOW HOUSEHOLD WITHDRAWALS DISREGARDING THE STATUS, REQU IREMENT OF DAILY NEEDS AND INFLATIONARY TREND WITHOUT GIVING A NY REASON WHATSOEVER. 2. BRIEF FACTS ARE: ASSESSEE HAD PURCHASED AGRICUL TURAL LAND AT VILLAGE KHERI IN TWO PARTS: (I) 8 KANALS ON 2-07-2003 FOR RS. 3,10,000/ - (II) 16 KANALS ON 11-08-2004 FOR RS. 6,20,00 0/- THESE LANDS WERE SOLD BY THE ASSESSEE ON 2-2-2006, IN THE RETURN OF INCOME FOR A.Y. 2006-07 FOLLOWING CAPITAL GAINS WERE DECLA RED IN THIS BEHALF: (I) LONG TERM CAPITAL GAIN ON SALE OF 8 KANALS FOR RS. 56,25,640/-, AGAINST THIS THE ASSESSEE CLAIMED DEDUCTION U/S 54 B AT RS. 34,32,575/- BY REINVESTMENT IN AGRICULTURAL LAND. AFTER INDEXIN G AND COMPUTATION, 3 THE BALANCE AMOUNT OF LONG TERM CAPITAL GAINS OF RS . 21,93,065/- HAS BEEN OFFERED FOR TAXATION. (II) SALE OF 16 KANALS FOR CONSIDERATION OF RS. 1,1 3,42,800/-, AFTER REDUCING PURCHASE PRICE AND EXPENSES SHORT TERM CAPITAL GAINS OF RS. 1,20,00,000/-. 2.2. ASSESSING OFFICER QUA THE CLAIM OF LONG TERMS CAPITAL GAIN HELD THAT ASSESSEE WAS NOT ENTITLED TO LTC ON FOR EXEMPTION U/S 54B AS FOR THIS SALE OF AGRICULTURE LAND ALSO THE HOLDING PERIOD OF 36 M ONTHS WAS REQUIRED AS AGAINST THE CLAIM OF 24 MONTHS U/S 10 (37). THE AO WAS OF THE VIEW THE CLAIM OF LTC WAS ON FOLL OWING COUNTS (I) AGRICULTURAL LAND WERE NOT HELD FOR 3 YEARS. (II) LAND WAS NOT USED FOR A PERIOD OF THREE YEARS (III) GIRDAWARI WAS IN THE NAME OF ONE SHRI SUBHASH AND NOT ASSESSEE (IV) ASSESSEE OR HIS PARENT DID NOT USE THE LAND FO R AGRICULTURAL PURPOSES. 2.3.BESIDE ASSESSING OFFICER ALTERNATIVELY HELD THA T THE COST OF NEW AGRICULTURAL LAND PURCHASED WAS LESS THAN THE REQUI RED INVESTMENT. ASSESSEE FURNISHED EVIDENCE IN SUPPORT OF PURCHASE OF LAND F OR RS. 44,76,000/- IN HIS OWN NAME AND THE REMAINING INVESTMENT OF RS. 16,84 ,700/- WAS CLAIMED TO BE MADE BY HIS WIFE SMT. RANJANA VERMA WHICH WAS NO T UNEXPLAINED. IN FINE THE AO PROPOSED TO TREAT THE INCOME FROM SALE OF 8 KANAL AS SHORT TERM CAPITAL GAINS. 2.4. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL WHE RE APART FROM MAIN GROUNDS FOLLOWING ADDITIONAL GROUND WAS RAISED IN R ESPECT OF SALE OF 16 KANAL OF LAND OFFERED BY HIM AS SHORT TERM CAPITAL GAINS: 4 THE LEARNED ASSESSING OFFICER ERRED ON FACTS AS WE LL AS IN LAW IN BRINGING TO TAX AMOUNT OF RS. 1,80,37,500/- THE SAME BEING NOT PART OF TOTAL TAXABLE INCOME U/S 10(37). 2.5. BESIDES IN SUPPORT OF HIS GROUNDS, ASSESSEE AL SO FIND APPLICATION FOR ADMISSION OF ADDITIONAL GROUND WHICH WAS ADMITTED B Y LD. CIT(A) ON FOLLOWING OBSERVATIONS: I HAVE EXAMINED THE GROUND NO. 2(C)(II) AS ABOVE U NDER THE PROVISIONS OF SECTION 250(5) OF THE INCOME TAX ACT, 1961. THE LD. A.R. HAS PLEADED THAT THIS GROUND IS A LEGAL GR OUND THAT GOES TO THE ROOT OF THE MATER AND THAT RAISING OF A N ALTERNATIVE PLEA IS PERMISSIBLE AS PER LAW. I HAVE CONSIDERED T HE PLEAS OF THE LD. A.R. AND FIND THAT HIS CONTENTIONS ARE CORR ECT AND THE OMISSION TO TAKE THIS ADDITIONAL GROUND IS NOT WILL FUL OR UNREASONABLE AND HENCE AS PER MY POWERS U/S 250(5) AND THE RATIO LAID DOWN BY THE APEX COURT IN THE CASE OF JU TE CORPORATION OF INDIA LTD. VS. CIT (1991) 187 ITR 68 8 (SC), I ADMIT IT FOR ADJUDICATION OF THE APPEAL. 2.6. ASSESSEE FURTHER FILED AN APPLICATION FOR ADDI TIONAL EVIDENCE U/R 46A, WHICH WAS DULY FORWARDED BY CIT(A) TO AO FOR HIS OB JECTIONS AND COMMENTS. AO SUBMITTED HIS REMAND REPORT, ON CONSID ERATION THEREOF THE ADDITIONAL EVIDENCE WAS ADMITTED BY LD. CIT(A) BY O BSERVATIONS AT PARA 8 PAGE 12 OF HIS ORDER. 2.7. ON MERITS THE ASSESSEE SUBMITTED BEFORE THE LD . CIT(A) THAT RELEVANT PROVISIONS OF SEC 54B ARE AS UNDER: [CAPITAL GAIN ON TRANSFER OF LAND USED FOR AGRICUL TURAL PURPOSES NOT TO BE CHARGED IN CERTAIN CASES. 54B. [(1)] [SUBJECT TO THE PROVISIONS OF SUB-SECTION (2) , WHERE THE CAPITAL GAIN ARISES] FROM THE TRANSFER OF A CAP ITAL ASSET BEING LAND WHICH, IN THE TWO YEARS IMMEDIATELY PREC EDING THE DATE ON WHICH THE TRANSFER TOOK PLACE, WAS BEING US ED BY 77 [THE ASSESSEE BEING AN INDIVIDUAL OR HIS PARENT, OR A HI NDU 5 UNDIVIDED FAMILY] FOR AGRICULTURAL PURPOSES 78 [(HEREINAFTER REFERRED TO AS THE ORIGINAL ASSET)], AND THE ASSESS EE HAS, WITHIN A PERIOD OF TWO YEARS AFTER THAT DATE, PURCHASED AN Y OTHER LAND FOR BEING USED FOR AGRICULTURAL PURPOSES, THEN, INS TEAD OF THE CAPITAL GAIN BEING 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, THAT IS TO SAY, (I) IF THE AMOUNT OF THE CAPITAL GAIN IS GREATER TH AN THE COST OF THE LAND SO PURCHASED (HEREINAFTER REFERRED TO AS T HE NEW ASSET), THE DIFFERENCE BETWEEN THE AMOUNT OF THE CAPITAL GA IN AND THE COST OF THE NEW ASSET SHALL BE CHARGED UNDER SECTIO N 45 AS THE INCOME OF THE PREVIOUS YEAR; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISIN G FROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURC HASE, THE COST SHALL BE NIL; OR (II) IF THE AMOUNT OF THE CAPITAL GAIN IS EQUAL TO OR LESS THAN THE COST OF THE NEW ASSET, THE CAPITAL GAIN SHALL NOT B E CHARGED UNDER SECTION 45; AND FOR THE PURPOSE OF COMPUTING IN RESPECT OF THE NEW ASSET ANY CAPITAL GAIN ARISING FROM ITS TRANSFER WITHIN A PERIOD OF THREE YEARS OF ITS PURCHASE, THE COST S HALL BE REDUCED, BY THE AMOUNT OF THE CAPITAL GAIN.] 2.8. IN THIS BACK DROP FOLLOWING FURTHER SUBMISSION S WERE MADE: I THE AMOUNT OF RS. 21,93,065/- WAS OFFERED FOR TAX A S CAPITAL GAINS, AND NOT AS LONG TERM OR SHORT TERM. MER E MENTIONING LONG TERM CAPITAL GAINS, WHICH WAS SO MENTIONED AS POSSESSION WAS TAKEN AT THE TIME OF AGREEMENT ON LY; DOES NOT TAKE AWAY THE RIGHT OF ASSESSEE TO CLAIM BENEFIT OF EXEMPTION U/S 54B WHEN THERE IS NO REQUIREMENT OF POSSESSING THE LAND FOR 36 MONTHS BEFORE EXEMPTION U/S 54B COULD BE CLAIMED B. FOR CLAIMING EXEMPTION U/S 54B ONLY THREE THINGS NEED TO BE SATISFIED - (I) THE LAND SHOULD BE A 'CAPITAL ASSET' (II) THE LAND SHOULD HAVE BEEN USED BY THE ASSESSEE OR A PARENT 6 OF HIS FOR AGRICULTURAL PURPOSES IN THE 2 YEARS IMMEDIATELY PRECEDING THE DATE OF TRANSFER. (III) THE LAND PURCHASED SUBSEQUENTLY SHOULD BE AGRICULTU RAL LAND C. THE SECTION REFERS TO THE NATURE OF GAIN AS OR T HE TYPE OF GAIN AS 'CAPITAL GAIN' AND ASSET AS 'CAPITAL ASSET' AND NOT AS 'SHORT TERM' OR ''LONG TERM'. HAD THERE BEEN ANY IN TENTION OF THE LEGISLATURE OF DENYING THE CLAIM IN THE EVENT O F LAND BEING SOLD BEFORE 36 MONTHS FROM THE DATE OF PURCHASE THE CONDITION LAID DOWN AT POINT NO (II) ABOVE WOULD HAVE BECOME REDUNDANT AND ILLOGICAL OR IT WOULD HAVE BEEN 3 YEARS AND NOT 2 YEARS IN CLAUSE (II) ABOVE. FURTHER WHEREVER THE REQUIREMENT OF HOLDING OF 36 MONTHS IS NECESSARY IT HAS BEEN SPECIFICALLY MENTIONED AS ''LONG TERM CAPITAL GAINS' AS IS IN THE CASE OF SEC TION 54E(A) AND WAS WITH 54E(8), 54E(C}, 54E(D}, 54F. EVEN SECT ION 54G REFERS TO CAPITAL GAIN IRRESPECTIVE OF THE PERIOD O F POSSESSION. EVEN, THE DEFINITION OF 'CAPITAL ASSET' & 'CAPITAL GAINS' SHOULD SET THE CONTROVERSY AT REST. D. FURTHER AND WITHOUT PREJUDICE TO THE ABOVE, ASSESSE E'S CLAIM NOT DECISIVE OF WHETHER THE CLAIM HAS BEEN RIGHTLY MADE AND IF IT HAS TO BE SO THEN WHATEVER HAS BEEN CLAIMED BY THE ASSESSEE MAY PLEASE BE ACCEPTED AS SUCH. NOMENCLATURE IS NEV ER DECISIVE OF THE NATURE OF CLAIM. THE ASSET REFERRED TO IN SE CTION 54B HAS TO BE A CAPITAL ASSET, BE IT 'LONG TERM' OR 'SHORT TERM' AND THEREFORE ASSESSING OFFICER WAS WRONG IN HOLDING TH AT THE LAND UNDER REFERENCE WAS NOT A LONG TERM CAPITAL AS SET AND IN CONSEQUENTLY DENYING THE EXEMPTION. ALL THE THRE E 'CAPITAL ASSET': 'LONG TERM CAPITAL ASSET' & ''SHORT TERM CAPITAL ASSET' HAVE BEEN DEFINED SEPARATELY UNDER T HE INCOME TAX ACT 1961 . 'CAPITAL ASSET' THEREFORE INCLUDES BOTH 'LONG TERM' & ''SHORT TERM' CAPITAL ASSETS. THE FACTUM OF THE ASSET BEING A CAPITAL ASSET STAND S ADMITTED BY THE ASSESSING OFFICER HIMSELF. AS TO TH E FULFILLMENT OF THE SECOND REQUIREMENT THE SAME IS D ISCUSSED IN PARA BELOW. 7 E. A COPY OF GIRDAWARI WAS FILED BEFORE ASSESSING O FFICER AS EVIDENCE OF CULTIVATION OF LAND BY ASSESSEE BUT THE SAME HAS BEEN REJECTED BY ASSESSING OFFICER AS INCONCLUS IVE. THE LEARNED ASSESSING OFFICER REJECTED THE CLAIM OF THE ASSESSEE WITH RESPECT TO FULFILLMENT OF CONDITION M ENTIONED AT CLAUSE-III) ABOVE ON THE FOLLOWING GROUNDS:- (I) 'THE GIRDAWARI WAS IN THE NAME OF ONE SH. SUBHASH AND NOT IN THE NAME OF ASSESSEE (LAST PARA OF PAGE 4) (II) NO EVIDENCE REGARDING SALE OF AGRICULTURAL PRODUCE HAS BEEN FURNISHED (POINT NO (IV) AT PAGE 5). (III) NO AGRICULTURAL INCOME HAS BEEN SHOWN IN THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION I.E. FOR THE PERIOD 01.04.2005, TO 31.03.2006. [POINT NO (V) AT PAGE 5 } THE LAND WAS HELD BY THE ASSESSEE FROM 02.07.2003 T O 25.09.2005. THUS, EXCLUDING THE PERIOD FROM 01.04.2 005 TO 25.09.2005 FOR WHICH NOT EVEN AN IOTA OF EVIDENCE H AS BEEN FURNISHED REGARDING PERFORMANCE OF AGRICULTURE, SAL E OF AGRICULTURE PRODUCE AND EARNING OF AGRICULTURE INCO ME, THE EARLIER PERIOD FOR WHICH THE LAND WAS HELD I.E. 02. 07.2003 TO 31.03.2005 IS LESS THAN TWO YEARS. THUS, THE ASS ESSEE HAS FAILED TO FURNISH EVIDENCE REGARDING PERFORMANCE OF AGRICULTURAL ON THE SAID LAND FOR THE PERIOD OF TWO YEARS IMMEDIATELY PRECEDING THE DATE ON WHICH TRANSFER TO OK PLACE. [POINT (VI) AT PAGE 5] ': ON MERITS OF THE EVIDENCE, APPEARANCE OF NAME OF PR EVIOUS OWNER IN THE GIRDAWARI WAS NOT BECAUSE SUBHASH VERM A CULTIVATED THE LAND BUT BECAUSE THE SAME COULD NOT BE CHANGED IN THE REVENUE RECORDS AS EXPLAINED BY TEHSTLDAR IN HIS LETTER ANNEXED AS 'ANN-A ': HOWEVER, AND IN THE INTEREST OF JUSTICE AND FAIR PLAY, THE ASSESSEE MAY PLEASE BE PERMITTED TO EXPLAIN THE SAME AT THE APPELLATE STAGE BY WAY OF CLARIFICA TION GIVEN BY TEHSILDAR ANNEXED AS 'ANN-A ': HAD THE ASSESSING OFFICER APPRAISED THE ASSESSEE, O F ANY 8 DOUBT OF HIS W.R. T UNDERSTANDING OF GIRDAWARI~ THE SAME WOULD HAVE BEEN CLARIFIED/ EXPLAINED AT THE ASSESSMENT ST AGE ITSELF ASSESSING OFFICER HAVING FAILED IN GIVING AN OPPORT UNITY TO CLARIFY HIS DOUBTS, THE BLAME COULD NOT BE FASTENED AT THE DOOR OF THE ASSESSEE FOR NO FAULT OF HIS. A COPY OF 'FORM- J WAS FURNISHED ONLY TO ESTABLISH THAT THE LAND PURCHASED WAS BEING USED AS AGRICULTURAL LAND, THE SAME BEING IN SUPPORT OF FULFILLMENT OF CONDITION (III) MENTIONED ABOVE. TO SUM UP, TO CLAIM EXEMPTION U/S 54B WHAT IS REQUIRED IS- (I) THE LAND SHOULD BE A CAPITAL ASSET, BE IT ''SHORT T ERM' OR 'LONG TERM' (II) THE LAND SHOULD HAVE BEEN USED BY THE ASSESSEE OR P ARENT OF HIS FOR AGRICULTURAL PURPOSES IN THE2 YEARS IMMEDIATELY PRECEDING THE DATE OF TRANSFER. (III) THE LAND PURCHASED AND OF SALE PROCEEDS SHOULD BE AGRICULTURAL LAND IT IS THEREFORE PRAYED THAT THE L ETTER MENTIONED ABOVE BEING SUBMITTED HEREWITH THE SAME MAY PLEASE BE CONSIDERED AND THE CLAIM OF THE ASSESSEE BE ALLOWED . 2.9. THE LD. CIT(A) DISMISSED THE CLAIM RAISED BY A SSESSEE BY WAY OF ADDITIONAL GROUND I.E. TO TREAT THE OTHER PIECE OF LAND SOLD AS COVERED U/S 54B. QUA WHICH THE ASSESSEE HAS NOT PRESSED HIS APPEAL. HENCE THE SAME IS DISMISSED. 2.10. LD. CIT(A) HOWEVER ALLOWED THE CLAIM OF THE ASSESSEE ON THE ORIGINAL GROUND BY FOLLOWING OBSERVATIONS: 15. I HAVE CAREFULLY CONSIDERED THE CONTENTIONS OF THE LD. A.R. AND PERUSED THE ORDER OF ASSESSMENT. FIRST OF ALL, THERE IS NO DOUBT THAT THE ASSET IN QUESTION WAS SOLD BEFORE 3 YEARS (36 MONTHS) FROM THE DATE OF PURCHASE OF LAND AND ON ON E OF SUCH BASIS, THE A.O. HAS TREATED THE CAPITAL GAINS AS SH ORT-TERM 9 CAPITAL GAINS AND HAS ACCORDINGLY DISALLOWED THE EX EMPTION CLAIMED U/S 54B OF THE INCOME TAX ACT, 1961. THE AP PELLANT HAD PLEADED DURING THE COURSE OF ASSESSMENT PROCEED INGS VIDE HIS REPLY DATED 03-12-2008 IN PARA 3 THAT NO SUCH C ONDITION OF 36 MONTHS IS REQUIRED FOR THE CLAIM U/S 54B. THE AP PELLANT HAD NOT CITED AT THAT TIME ANY JUDICIAL DECISION IN SUP PORT OF HIS CONTENTION BUT NOW IN THE APPEAL PROCEEDINGS, THE L D. A.R. OF THE ASSESSEE HAS RELIED UPON THE DECISION OF THE PU NE TRIBUNAL IN THE CASE OF SHRI RAMESH NARHARI JAKHAD VS. ITO ( 1992) 41 ITD (PN) 368 WHEREIN IT HAS BEEN HELD THAT FOR THE CLAIM OF EXEMPTION U/S 54B,IT IS NOT NECESSARY THAT THE LAND SHOULD HAVE BEEN USED FOR AGRICULTURAL PURPOSES FOR FULL TWO YE ARS IMMEDIATELY PRECEDING THE DATE OF TRANSFER AND THAT IT IS SUFFICIENT IF IT WAS SO USED IN THE WHOLE OF THE PR ECEDING YEAR AND FOR SOME DAYS IN THE YEAR EARLIER TO PRECEDING YEAR. IN VIEW OF SUCH RATIO, WHICH IS FOUND TO BE QUITE RELEVANT AND RATIONAL, THE ASSESSEE BECOMES ENTITLED TO EXEMPTION U/S 54B OF THE INCOME TAX ACT, 1961. AS TO THE A.O.S OTHER OBJECT ION THAT NO EVIDENCE WAS FURNISHED TO SHOW THAT THE LAND SOLD W AS BEING USED TWO YEARS IMMEDIATELY PRECEDING THE DATE ON WH ICH THE TRANSFER TOOK PLACE FOR AGRICULTURAL PURPOSES, IT I S NOTICED THAT THIS FACT IS ALREADY ESTABLISHED FROM THE RECORDS O F THE ASSESSEE WHEREBY FOR THE ASSESSMENT YEAR 2005-06, THE USE OF THE LAND FOR AGRICULTURAL PURPOSES BECOMES VERY MUCH EVIDENC E FROM THE DECLARATION OF AGRICULTURAL INCOME AMOUNTING TO RS. 10,000/- IN THAT ASSESSMENT YEAR AND THE USE OF THIS AND FOR SU CH PURPOSES IS FURTHER EVIDENCED BY THE GIRDHAWARI WHICH CLEARL Y SHOWS THE LAND WAS USED FOR SELF AND THE ASSESSEE OWN USE IN THE ASSESSMENT YEAR UNDER CONTEXT. THIS FACT IS NOW SUB STANTIATED BY THE LD. A.R. THROUGH FURNISHING OF THE ACKNOWLED GMENT OF THE RETURN FOR THE ASSESSMENT YEAR 2005-06 SUBMITTED UN DER RULE 46A AND OMITTED AS ABOVE, WHICH COULD NOT BE ADDUCE D BEFORE THE A.O. IN VIEW OF SUCH DISCUSSIONS THEN, BOTH THE MAJOR OBJECTIONS OF THE A.O. IN DENYING EXEMPTION U/S 54B ARE FULLY MET. FURTHER, AS TO THE A.OS OBJECTION THAT THE LA ND WAS NOT IN THE NAME OF THE ASSESSEE, THIS ISSUE WAS NOT CONFRO NTED BY THE A.O. WITH THE APPELLANT DURING THE COURSE OF ASSESS MENT PROCEEDING, AS NO SHOW CAUSE NOTICE WAS GIVEN BY TH E A.O. IN THAT RESPECT. THAT IS WHY FOR CLARIFICATION, THE LD . A.R. HAS PRODUCED THE CERTIFICATE DATED 20-05-2009 FROM THE TEHSILDAR/ 10 PATWARI AS ADDITIONAL EVIDENCE UNDER RULE 46A, WHIC H HAS BEEN ADMITTED AS ABOVE IN WHICH THE NAME OF SUBHASH HAS BEEN EXPLAINED AS THE EARLIER OWNER OF THE LANDS. SUCH O BJECTION OF THE A.O. HAS ALSO BEEN MET BY THE LD. A.R. IN THE R EJOINDER TO THE A.OS COMMENTS. FURTHER, IT IS FOUND THAT THE N AME OF THE WIFE IN THE INVESTMENT OF THE AGRICULTURAL LAND IS MENTIONED ONLY TO AVAIL OF THE REGISTRATION FACILITIES WHICH ARE FAVOURABLE TO WOMEN AS PER LAW. SHE IS ONLY A NAME LENDER AND ALL THE INVESTMENTS HAD BEEN MADE BY THE APPELLANT IN QUEST ION OUT OF HIS OWN SOURCES AND HIS WIFE HAS NO INDEPENDENT SOU RCE OF ANY FUNDS. THIS HAS BEEN ALREADY EXPLAINED SUFFICIENTLY IN THE APPELLANTS LETTERS DATED 18-09-2008 AND 11-12-2008 SUBMITTED IN THE PROCEEDINGS BEFORE THE A.O. THAT HAVE BEEN E VIDENTLY IGNORED BY THE A.O. THE DETAILS OF LAND PURCHASED A LONG WITH DOCUMENTARY EVIDENCES FOR THE CLAIM U/S 54B WERE PR OVIDED IN ANNEXURE D OF THE LETTER DATED 18-09-2008 WHICH I S SELF EXPLANATORY & THE EXEMPTION U/S 54B WAS RECTIFIED T O RS. 61,49,000/- WHICH WAS LESS COMPUTED THROUGH MISTAKE , IN THE LETTER DATED 11-12-2008, THE SOURCE OF INVESTMENT O F RS. 16,84,700/- IN THE LAND PURCHASED WAS DULY EXPLAINE D AND AUTHENTICATED. THE A.O. HAS NOT CONTROVERTED THESE PLEAS AND EVIDENCES ANYWHERE IN ASSESSMENT OR APPEAL PROCEEDI NGS. KEEPING IN VIEW SUCH DISCUSSION, THEREFORE, THE LON G-TERM CAPITAL GAINS OF RS. 60,00,000/- STAND FULLY EXPLAI NED AS GENUINE. THEREFORE, THE ASSESSEE IS ENTITLED TO EXE MPTION U/S 54B OF THE INCOME TAX ACT, 11961. ACCORDINGLY, THE A.O. IS DIRECTED TO ALLOW THE SAME. 3. LD. DR CONTENDS THAT LD CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCE IN CONTRAVENTION OF PROVISIONS OF RULE 46A . WHEN THE ASSESSEE WAS GIVEN SUFFICIENT OPPORTUNITY OF BEING HEARD, THERE WAS NO JUSTIFICATION NO ADMIT THE SAME AND CALLED FOR THE REMAND REPORT. 3.1. APROPOS MERITS LD DR CONTENDS THAT ASSESSEE CO ULD NOT SATISFY THE CONDITIONS OF USER OF LAND BY HIMSELF OR PARENT S AS AGRICULTURAL LAND, THEREFORE THE CONDITION OF SEC 54B WAS NOT CO MPLIED WITH. 11 BESIDES THE NEW AGRICULTURAL LAND S SHOULD BE PURCH ASED IN THE NAME OF ASSESSEE HIMSELF AND NOT IN THE NAME OF HIS WIFE . ALTERNATIVELY, THE REDUCTION OF EXEMPTION OF CAPITAL GAINS U/S 54B IS JUSTIFIED. ORDER OF AO IS RELIED ON AND THAT OF CIT(A) ASSAILED. 4. LD. COUNSEL FOR THE ASSESSEE APROPOS REVENUE GRO UND ABOUT ADDITIONAL EVIDENCE VEHEMENTLY CONTENDS THAT ASSESS EE RAISED ADDITIONAL GROUND AS WELL AS ADDITIONAL EVIDENCE BY MAKING PROPER APPLICATIONS AND BOTH OF THE REQUESTS BEING STATUTO RY RIGHTS OF THE ASSESSEE HAVE BEEN ADMITTED BY LD CIT(A). IF AN ADD ITIONAL GROUND IS ADMITTED, GENERALLY ITS ADJUDICATION REQUIRES ADDIT IONAL EVIDENCE ALSO, WHICH WAS FILED BY THE ASSESSEE. IT WAS DULY FORWAR DED BY CIT(A) FOR COMMENTS TO AO, WHO OBJECT THE ADMISSION. LD. CIT(A ) BY ELABORATE FINDINGS HAS DEALT WITH THE OBJECTIONS AND HAS GIVE N A FINDING OF FACT THAT ASSESSEE WAS PREVENTED BY A SUFFICIENT CAUSE I FILING THE SAME BEFORE AO. BESIDES IT IS A WELL KNOW FACT THAT LAND DEALS MUTATIONS AND ENTRY IN GOVT. RECORD TAKES TIME. LD. AO WANTED TO VERIFY SUCH ENTRIES WHICH WERE NOT MADE BY GOVT DEPARTMENTS IN TIME. THIS IS EVIDENT FROM TAHSILDARS CERTIFICATE FILED LETTER. BESIDES LD AO HAS SUBMITTED CATEGORICAL COMMENTS ON THE MERITS. IN TH ESE CIRCUMSTANCES THERE IS NEITHER VIOLATION OF RULE 46A NOR PREJUDIC E TO REVENUE. BESIDES REVENUE CANNOT ADOPT A COURSE OF NOT TO RAISE GROUN D ABOUT ADMISSIBILITY OF ADDITIONAL EVIDENCE AND CHALLENGE ADMISSION OF ADDITIONAL EVIDENCE. LD. COUNSEL THUS CONTENDS THAT THERE IS NO MERIT IN REVENUES GROUND IN THIS BEHALF, ORDER OF LD. CI T(A) IS RELIED ON. 12 4.1. APROPOS ISSUE ON MERITS IT IS CONTENDED THAT T HE GROUNDS RAISED IN ASSESSEES APPEAL ARE NOT PRESSED. APROPOS REVEN UE APPEAL IT IS CONTENDED THAT IN TERMS OF SEC 54B FOLLOWING THREE CONDITIONS ARE TO BE SATISFIED: (I) THE LAND SHOULD BE A 'CAPITAL ASSET' (II) THE LAND SHOULD HAVE BEEN USED BY THE ASSESSEE OR A PARENT OF HIS FOR AGRICULTURAL PURPOSES IN THE 2 YEARS IMMEDIATELY PRECEDING THE DATE OF TRANSFER. (III) THE LAND PURCHASED SUBSEQUENTLY SHOULD BE AGRICULTU RAL LAND 4.2. AO HAS NOT DISPUTED THAT THE LAND IN QUESTION IS AGRICULTURAL IN NATURE HENCE IT IS A CAPITAL ASSET AS ASSESSEE IS AN ADVOC ATE AND NOT A DEALER IN LAND. SIMILARLY THERE IS NO DISPUTE ABOUT CONDITION III. I.E. THE NEW LAND PURCHASED IS AGRICULTURAL LAND. 4.3. THE ENTIRE OBJECTION OF AO IS TO THE II. ISSUE IS TO THE EFFECT THAT IN PRIOR TWO YEARS LAND IS NOT CULTIVATED BY ASSESSEE OR HIS PARENTS. THE OBJECTION SEEMS TO BE BASED ON THE FACT THAT NAME O F TILLER MENTIONED IN EARLIER AGRICULTURAL RECORD PRODUCED BEFORE AO WAS THAT OF ONE SHRI SUBHASH WHO IS THE AGRICULTURIST FROM WHOM THE LA ND IS PURCHASED. ASSESSEE CONTENDED THAT IN LAND RECORD IT TAKES TIM E TO MUTATE IT BESIDES IN ADDITIONAL EVIDENCE ASSESSEE FILED TAHSILDARS CERTI FICATE AND OTHER RECORD TO THIS EFFECT. THEREFORE, THERE IS NO DOUBT TO THE FA CT THAT THE LAND WAS CULTIVATED BY THE ASSESSEE. IT IS FURTHER EVIDENT F ROM THE FACT THAT AGRICULTURAL INCOME AMOUNTING TO RS. 10,000/- IS DECLARED IN THA T ASSESSMENT YEAR AND IS ACCEPTED BY THE DEPARTMENT. THE EVIDENCE OF THE GI RDHAWARI ALSO CLEARLY 13 SHOWS THE LAND WAS USED FOR SELF AND FOR ASSESSEES OWN USE IN THE ASSESSMENT YEAR. 4.4. APROPOS THE ISSUE ABOUT PART PURCHASE OF LAND FROM ASSESSES FUND IN THE NAME OF WIFE SMT RANJANA VERMA IT IS PLEADED TH AT HER NAME OF THE WIFE WAS MENTIONED TO AVAIL OF THE REGISTRATION FEE REBA TE AND PROVIDE HER SOCIAL SECURITY. SHE IS ONLY A NAME LENDER AND ALL THE INV ESTMENTS HAD BEEN MADE BY THE APPELLANT OUT OF HIS OWN SOURCES WHICH IS NO T DISPUTED BY AO. BESIDES ASSESSEE'S WIFE HAS NO INDEPENDENT SOURCE O F ANY FUNDS A FACT WHICH IS ALSO NOT DISPUTED BY AO. 4.5. LD. COUNSEL FURTHER RELIES ON PUNE TRIBUNAL IN THE CASE OF SHRI RAMESH NARHARI JAKHAD VS. ITO (1992) 41 ITD (PN) 36 8AND RELIES ON THE ORDER OF CIT(A). 5. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED MATERIAL AVAILABLE ON RECORD. ASSESSEE HAS NOT PRESSED HIS APPEAL WHICH I S DISMISSED ACCORDINGLY. APROPOS REVENUE APPEAL WE FIND NO INFIRMITY IN THE ORDER OF LD CIT(A) IN ADMITTING THE ADDITIONAL EVIDENCE FOR FOLLOWING REA SONS: (I) REVENUE HAS NOT RAISED ANY GROUND CHALLENGING T HE ADDITIONAL GROUND ADMITTED BY LD. CIT(A). AFTER AN ADDITIONAL GROUND IS ADMITTED GENERALLY THE ADDITIONAL EVIDENCE CAN BE ADMITTED B Y CIT(A) WHILE EXERCISING HIS APPELLATE POWERS. (II) ADDITIONAL EVIDENCE APPLICATION IS SUPPORTED BY VAL ID APPLICATION AND REASONS WHICH ARE ELABORATELY MENTI ONED BY CIT(A) IN HIS ORDER. 14 (III) AOS OBJECTIONS ON ADMISSION HAVE BEEN PROPER LY CONSIDERED THUS AN ADEQUATE OPPORTUNITY OF HEARING IN TERMS OF RULE 46A WAS PROVIDED. AOS OBJECTIONS ON MERITS HAVE BEEN PROPERLY CONSID ERED AND ADVERTED BY CIT(A). 5.1. IN VIEW OF THESE OBSERVATIONS WE ARE INCLINED TO DISMISS THIS GROUND OF REVENUE. 6. APROPOS MERITS WE FIND FORCE IN THE ARGUMENT OF LD. COUNSEL THAT THE MAIN OBJECTION OF AO IS ON THE FACT THAT SEC. 54B I S NOT APPLICABLE; LAND WAS NOT USED BY ASSESSEE FOR AGRICULTURAL PURPOSES BY A SSESSEE HIMSELF OR HIS PARENTS AND PART OF THE NEW AGRICULTURAL LAND HAS B EEN PURCHASED IN THE NAME LENDER WIFE. ON THIS ISSUE USEFUL REFERENCE CAN BE DRAWN FROM THE DECISION OF THE PUNE TRIBUNAL IN THE CASE OF SHRI RAMESH NARHAR I JAKHAD VS. ITO (1992) 41 ITD (PN) 368 WHEREIN IT HAS BEEN HELD THAT IN CA SE OF SALE AND REPURCHASE OF AGRICULTURAL LAND SEC 54B REQUIRES TWO YEARS PE RIOD. FURTHER FOR THE CLAIM OF EXEMPTION U/S 54B,IT IS NOT NECESSARY THAT THE L AND SHOULD HAVE BEEN USED FOR AGRICULTURAL PURPOSES FOR FULL TWO YEARS IMMEDI ATELY PRECEDING THE DATE OF TRANSFER AND THAT IT IS SUFFICIENT IF IT WAS SO USED IN THE WHOLE OF THE PRECEDING YEAR AND FOR SOME DAYS IN THE YEAR EARLIE R TO PRECEDING YEAR. THUS IN OUR CONSIDERED VIEW THE EXEMPTION U/S 54 B IS AV AILABLE TO THE ASSESSEE. 7. APROPOS THE OBJECTION THAT LAND WAS NOT USED BY ASSESSEE HIMSELF IS PROVED BY THE ASSESSEE FROM THE FACT THAT AGRICULTU RAL INCOME OF RS. 10,000/- HAS BEEN ACCEPTED BY THE DEPARTMENT. BESIDES IN ADD ITIONAL EVIDENCE A CERTIFICATE TO THIS EFFECT HAS BEEN FURNISHED BY TH E ASSESSEE. LD AO IN REMAND REPORT HAS NOT CONTROVERTED THIS FACT. IN TH ESE FACTS AND CIRCUMSTANCES IT IS TO BE HELD THAT ASSESSEE USED T HE LAND FOR HIMSELF IN EARLIER YEARS. 15 8. APROPOS THE PART PURCHASE OF LAND IN THE NAME OF NAME LENDER I.E. WIFE OUT OF THE ASSESSEES FUNDS PART EXEMPTION CAN NOT BE DENIED. IT IS SETTLED NOW THAT ASSESSEE CAN PURCHASE A NEW ASSET OR PART THEREOF IN THE NAME OF HIS WIFE. FOR THIS THERE ARE SUFFICIENT JUSTIFICATIONS LIKE STAMP DUTY REBATE, SOCIAL; SECURITY FOR LADIES, AS LONG AS THE FUNDS ARE INVES TED BY THE ASSESSEE, EXEMPTION CANNOT BE DENIED. 9. IN VIEW OF THE ABOVE MENTIONED FACTS, CIRCUMSTAN CES AND PROPOSITIONS OF LAW WE UPHELD THE ORDER OF LD CIT(A) ON THIS ISS UE. 10. IN THE RESULT ASSESSEES APPEAL AS WELL AS REVE NUE APPEALS ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 28-02-2014. SD/- SD/- ( T.S. KAPOOR ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 28-02-2014. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR