Income-tax Officer, Ward-1, Ahmednagar V. Shri Nirmal Sharad Mutha, Ahmednagar

ITA 1490/PUN/2011

• Counselvise Citation: 149024514 RSA 2011
• Duration Of Justice: 2 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 23-01-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 24-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Capital asset
• Section: 54B; 54

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER , AND SHRI R.K. PANDA, ACCOUNTANT MEMBER. ITA.NO.1490/PN/2011 (ASSESSMENT YEAR 2005-06) ITO, WARD-1, AHMEDNAGAR .. APPELLANT VS. SHRI NIRMAL SHARAD MUTHA, 83, MANIKNAGAR, NAGAR-PUNE ROAD, AHMEDNAGAR PAN NO.AADHM7421H .. RESPONDENT ASSESSEE BY : SHRI SUNIL GANOO REVENUE BY : SHRI RAJESH DAMOR DATE OF HEARING : 25-07-2014 DATE OF PRONOUNCEMENT : 31-07-2014 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER DATED 17-02-2011 OF THE CIT(A)-I, PUNE RELATING TO ASSESSMENT YEAR 2005-06. 2. THIS APPEAL WAS EARLIER DISMISSED BY THE TRIBUNA L DUE TO NON- SERVICE OF NOTICE BY THE REVENUE ON THE ASSESSEE. SUBSEQUENTLY, THE REVENUE MOVED A MISCELLANEOUS APPLICATION STATING T HAT THERE WAS DUE SERVICE OF NOTICE ON THE ASSESSEE, A FACT WHICH HAS BEEN ACCEPTED BY THE ASSESSEE HIMSELF. THEREAFTER, THE TRIBUNAL VIDE M.A.NO.111/PN/2013 ORDER DATED 1-11 2013 RECALLED T HE ORDER. HENCE, THIS IS A RECALLED ORDER. 2 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS AN INDIVIDUAL ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION. HE FILED HIS RETURN OF INCOME ON 30-08-2005 DECLARING TOTAL INCOME OF RS.1 ,10,140/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AS SESSING OFFICER NOTED FROM THE DETAILS THAT THE ASSESSEE HAS SHOWN LONG TERM CAPITAL GAIN OF RS.25 LAKHS ON SALE OF AGRICULTURAL LAND. THE ASSESSEE HAS CLAIMED DEDUCTION U/S.54B ON THE BASIS OF AGREEMENT TO SALE ONLY ON THE STAMP PAPER OF RS.20/-. ACCORDING TO THE ASSES SING OFFICER, THE ASSESSEE HAS NOT PRODUCED ANY DOCUMENT REGISTERED W ITHIN THE STIPULATED PERIOD WITH GOVERNMENT AUTHORITY. ON BE ING QUESTIONED BY THE ASSESSING OFFICER, IT WAS SUBMITTED THAT HE HAS CREDITED THE ACCOUNT OF THE SELLER BY PASSING AN ENTRY IN HIS BO OKS OF ACCOUNTS. ACCORDING TO THE ASSESSING OFFICER, MERE PASSING OF A BOOK ENTRY IS NOT SUFFICIENT. HE WAS OF THE OPINION THAT WHERE T HE ASSESSEE HAS CLAIMED A DEDUCTION HE SHOULD SATISFY THE CONDITION WHICH IS REQUIRED FOR CLAIMING OF DEDUCTION. SINCE THE ASSESSEE IN T HE INSTANT CASE DID NOT SATISFY THE CONDITION LAID DOWN U/S.54B, THEREF ORE, HE IS NOT ENTITLED TO DEDUCTION U/S.54B. HE OBSERVED FROM TH E AGREEMENT WHEREIN IT HAS BEEN MENTIONED THAT THE CONSIDERATIO N OF LAND WILL BE GIVEN AT ANY TIME BEFORE SUB-REGISTRAR. HE, THEREF ORE, HELD THAT THE ASSESSEE HAS NOT INVESTED SALE CONSIDERATION WITHIN F.Y. 2004-05 OR BEFORE THE DUE DATE OF FILING OF RETURN U/S.139(1). ON BEING FURTHER QUESTIONED ON THIS ISSUE, IT WAS STATED ON BEHALF O F THE ASSESSEE THAT FOR THE PURPOSE OF DEDUCTION U/S.54B, THERE IS NO N EED THAT THE PURCHASER SHOULD PAY THE PURCHASE PRICE. IT WILL B E SUFFICIENT IF THE POSSESSION IS GIVEN THROUGH CONVEYANCE DEED. IT WA S SUBMITTED THAT THE SECTION DOES NOT SPEAK ABOUT PAYMENT OF CONSIDE RATION AND IT 3 SPEAKS ABOUT THE PURCHASE ONLY. ONCE PURCHASE IS CO MPLETE, THERE IS NO OTHER REQUIREMENT. 3.1 HOWEVER, THE ASSESSING OFFICER WAS NOT SATISFIE D WITH THE ABOVE EXPLANATION. HE ANALYSED THE PROVISIONS OF S ECTION 54B AND CAME TO THE CONCLUSION THAT THE AMOUNTS OF CAPITAL GAIN SHOULD BE UTILISED FOR PURCHASE OF NEW ASSET. SINCE THE ASSE SSEE, IN THE INSTANT CASE, HAS NOT INVESTED THE CAPITAL GAIN IN THE NEW ASSET HE IS NOT ELIGIBLE FOR DEDUCTION U/S.54B ONLY ON THE BASIS OF SALE AGREEMENT. FURTHER, TILL THE DATE OF COMPLETION OF ASSESSMENT, THE ASSESSEE HAS NOT FILED ANY EVIDENCE REGARDING COMPLETION OF SAID TRANSACTION. IN VIEW OF THE ABOVE, THE ASSESSING OFFICER DISALLOWED THE CLAIM OF EXEMPTION U/S.54B AMOUNTING TO RS.25 LAKHS. 4. BEFORE THE CIT(A) IT WAS SUBMITTED THAT THE AGRI CULTURAL LAND WAS PURCHASED UNDER AGREEMENT COUPLED WITH GENERAL POWER OF ATTORNEY ON 26-07-2005, I.E. BEFORE THE DUE DATE OF FILING THE RETURN, WHICH IN THE INSTANT CASE IS 31-10-2006 AND THEREFO RE THE CONDITION CONTAINED IN SECTION 54B SHOULD BE CONSIDERED AS CO MPLIED. 4.1 AS REGARDS THE OBJECTION OF THE ASSESSING OFFIC ER THAT THE PURCHASE AGREEMENTS ARE THROUGH THE AGREEMENT AND P OWER OF ATTORNEY ONLY WITHOUT GETTING THE NAME TRANSFERRED IN 7/12 EXTRACTS, IT WAS ARGUED THAT IF THIS OBJECTION IS CONSIDERED, TH EN ON THE SAME ARGUMENT, EVEN THE SALE CANNOT BE CONSIDERED TO HAV E BEEN EFFECTED AS THE SAME WAS ALSO TRANSFERRED IN THE SAME FASHIO N. IT WAS ACCORDINGLY ARGUED THAT IF THERE WAS NO TRANSFER AS PER LAW IN RESPECT 4 OF THE PURCHASE OF LAND, THEN EVEN THE SALE IS CONS IDERED TO HAVE NOT TAKEN PLACE. THEREFORE, THERE WILL NOT BE ANY TAXA BLE CAPITAL GAIN. 4.2 ON MERIT, IT WAS ARGUED THAT FOR THE PURPOSE OF SECTION 54B OF THE ACT, ACTUAL PAYMENT OF CONSIDERATION IS NOT CON DITION PRECEDENT TO PURCHASE OF PROPERTY BEFORE THE DUE DATE OF FILI NG THE RETURN OF INCOME U/S.139(1) OF THE ACT. THE ASSESSEE FILED T HE DOCUMENTS FOR PURCHASE OF AGRICULTURAL LAND IN THE FORM OF (A) AG REEMENT FOR PURCHASE OF LAND FOR RS.25 LAKHS FROM SHRI ASHOK BA NSILAL MURHA ON 26-07-2006 AND (B) GENERAL POWER OF ATTORNEY EXECUT ED IN FAVOUR OF THE ASSESSEE ON 19-07-2005. IT WAS ARGUED THAT THE ASSESSING OFFICER HAS NOT DOUBTED THE GENUINENESS OF THE SALE OF THE AGRICULTURAL LAND BY THE ASSESSEE IN THE SAME MANNER. RELYING ON VAR IOUS DECISIONS IT WAS ARGUED THAT THERE WAS NO JUSTIFICATION ON THE P ART OF THE ASSESSING OFFICER TO DENY THE CLAIM OF DEDUCTION U/ S.54B. 5. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE THE LD.CIT(A) DELETED THE DISALLOWANCE OF RS.25 LAKHS M ADE BY THE ASSESSING OFFICER BY OBSERVING AS UNDER : 4.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE LAW AS ARE APPARENT FROM RECORD. THE ASSESSING OFFICER HAS DEN IED THE DEDUCTION CLAIMED U/S.54B ON THE GROUNDS THAT THE INV ESTMENT IN THE AGRICULTURAL LAND HAS NOT BEEN MADE BECAUSE THE LAND WAS CLAIMED TO HAVE BEEN PURCHASED ONLY THROUGH AN AGREEMENT TO PUR CHASE AND THE SAID LAND IS STILL IN THE NAMES OF SELLERS, I.E. TH E NAME OF THE APPELLANT HAS NOT BEEN ENTERED IN THE 7/12 EXTRACT E TC. THE ASSESSING OFFICER HAS CONTENDED THAT THE AGREEMENT TO SA LE ENTERED INTO ON A STAMP PAPER OF RS.20/- HAS NOT BEEN REGISTERE D WITH RELEVANT AUTHORITY AND THE CONSIDERATION HAS BEEN CRE DITED INTO THE ACCOUNT OF THE SELLERS THROUGH A BOOK ENTRY ONLY AND THEREFORE, THE DEDUCTION IS NOT ALLOWABLE FOR WANT OF FULFILLMENT O F CONDITIONS CONTAINED U/S 54B. IT HAS BEEN FURTHER STATED THAT THE AGREEMENT TO SALE TALKS ABOUT PAYMENT OF CONSIDERATION AT ANY TIME BEFORE THE SUB- REGISTRAR AND AS THE DOCUMENT HAS NOT BEEN REGISTERED T HE SALE CONSIDERATION CANNOT BE TREATED AS INVESTED BEFORE TH E PERIOD AVAILABLE U/S 139(1) IN RESPECT OF THIS ASSESSMENT YEAR. T HE CLAIM OF 5 THE APPELLANT MADE BEFORE THE ASSESSING OFFICER THAT TH E AGREEMENT TO SALE, FOLLOWED BY POWER OF ATTORNEY AND THE POSSESSIO N HAS TO BE TREATED AS TRANSFER AS DEFINED IN SEC. 2(47) WAS NOT ACC EPTED BY THE ASSESSING OFFICER, SAYING THAT THIS DEFINITION WILL NOT A PPLY IN CASE OF DEDUCTION CLAIMED BY THE APPELLANT. HE WAS APPARENTL Y OF THE VIEW THAT THE WORD 'UTILIZED' APPEARING IN THE SECTION 54 B REQUIRES ACTUAL HANDING OVER OF CONSIDERATION OF SALE TO THE BUYER OF THE NEW AGRICULTURAL LAND. THE APPELLANT HAS DENIED THE SAME. THE DETAILS OF THE ARGUMENTS OF THE ASSESSING OFFICER ARE IN PARA 4.1 O F THIS ORDER. AS AGAINST THAT THE APPELLANT HAS MADE ELABORATE SUBMI SSIONS AND HAS ALSO PLACED RELIANCE ON VARIOUS JUDGMENTS QUOTED IN THEIR SUBMISSIONS DEALT IN PARA 4.2 OF THIS ORDER. IN RESPECT O F ACQUISITION IT HAS BEEN SUBMITTED THAT THE LAND SOLD WAS RECEIVED BY T HE APPELLANT FROM HIS GRANDFATHER UNDER A WILL AND THE GRANDFATHE R WAS HOLDING THE LAND SINCE APPROXIMATELY 1991-92 AND THEREFORE, IT WAS CLAIMED THAT THE APPELLANT WAS LEGALLY HOLDING THE LAND FOR MORE THAN 36 MONTHS AND THEREFORE, THE SALE CONSIDERATION WAS COMPUT ABLE UNDER THE HEAD 'LONG TERM CAPITAL GAINS. THE APPELLANT, AS PER RECORD HAS SHOWN LONG TERM CAPITAL GAINS IN HIS RETURN OF INCOME FILED ON 30.8.2005 IN THE CAPACITY OF HUF. THE RETURNED INCO ME WAS SHOWN AT RS.1,10,140 AFTER CLAIMING DEDUCTION OF RS.25,00,000 U/S 54B OF THE IT. ACT. THIS DEDUCTION HAS BEEN DENIED BY THE ASSESSING OFFICER IN THE ORDER UNDER CONSIDERATION. ON CAREFUL CONSIDERATI ON OF THE FACTS AND THE LAW, IT IS APPARENT THAT THE ASSESSING OFFICER ERRED IN APPRECIATING THE FACTS AND THE LAW PROPERLY. IN RESPE CT OF SALE, NO OBJECTION EXISTS. APPARENTLY, THIS ASPECT WAS NOT TAKEN INTO ACCOUNT BECAUSE THE ASSESSING OFFICER WAS MORE CONCERNED ABOUT TH E ALLOWABILITY OF THE DEDUCTION. HOWEVER, THE SAME CAN NOT BE LOST SIGHT OF, WHEN AN OBJECTION WAS RAISED BY THE APPELLANT BEF ORE HIM, WHILE EXPLAINING THE PURCHASE TRANSACTION TO BE LEGALLY COR RECT IN TERMS OF SEC. 2(47) THAT THE SALE AS WELL AS THE PURCHASE, BOTH H AVE BEEN EFFECTED THROUGH THE DOCUMENTS OF 'AGREEMENT TO SALE' ALONG WITH POWER OF POSSESSION IT IS AN ACCEPTED FACT THAT THE DEFI NITION OF TRANSFER IN THE INCOME TAX ACT PROVIDED U/S 2(47) WAS ENLARGED TO BRING IN CASES WHERE ACTUAL TRANSFERS OF CAPITAL ASSETS TA KE PLACE WITHOUT FOLLOWING THE ESTABLISHED NORMAL PROCEDURE, U NDER THE TAX NET, BUT THE SAME CANNOT BE SELECTIVELY EMPLOYED. THE TERM 'TRANSFER' HAS BEEN DEFINED IN SEC. 2(47) OF THE IT. ACT IN AN I NCLUSIVE MANNER FOR TRANSACTIONS RELATING TO CAPITAL ASSETS AND THEREFOR E, IN THE ABSENCE OF ANY LEGAL DISTINCTION MADE IN THE SAID SECTI ON FOR ITS APPLICABILITY IN RESPECT OF SALE AND PURCHASE, THE ASSESSI NG OFFICER CANNOT BE HELD TO BE CORRECT IN APPLYING THE SAME FO R THE SALE AND NOT APPLYING THE SAME FOR PURCHASE. IN SUCH VIEW OF THE MATTER, I AM OF THE OPINION THAT THE ASSESSING OFFICER ERRED IN HOLDING THAT THE PURCHASE WAS NOT LEGALLY VALID ONLY BECAUSE THE SAME WA S BASED ON AN AGREEMENT TO SALE ON A STAMP PAPER ALONG WITH POWE R OF ATTORNEY AND EVIDENCE OF OBTAINING THE POSSESSION. NOW COMING T O THE OTHER OBJECTION WHICH APPARENTLY RELATES TO UTILIZATION OF THE CAPITAL GAINS FOR THE PURPOSE OF PURCHASE OF ELIGIBLE ASSETS DEFINED I N SEC. 54B, IT IS FOUND THAT THE ASSESSING OFFICER WAS APPARENTLY OF THE V IEW THAT THE DEDUCTION WILL ONLY BE ALLOWABLE IF THE PURCHASE TRA NSACTIONS ARE PASSED ON IN CASH OR CHEQUE OR DRAFT OR DRAFT OR SUCH M ODES. THE TRANSFER OF CONSIDERATION THROUGH BOOK ENTRY AS A PROM ISSORY NOTE WAS NOT TREATED AS SUFFICIENT FOR UTILIZATION OF THE CAPITAL GAINS ENVISAGED IN SEC.54B. THE APPELLANT HAS OBJECTED TO TH IS INTERPRETATION STRONGLY. IT HAS BEEN CONTENDED THAT T HE ASSESSING OFFICER HAD NO OBJECTION IN RESPECT OF THE GENUINITY OF THE TRANSACTION AND THEREFORE, HOW THE MONEY IS PAID IS IRRELEVANT. ON CAREFUL CONSIDERATION THE LAW IT IS FOUND THAT THE DEDUCTION U/S 54B IS AVAILABLE FOR CAPITAL GAINS ARISING ON THE SALE OF LA ND USED FOR 6 AGRICULTURAL PURPOSES IF THE SAID CAPITAL GAINS ARE USED FOR ACQUIRING ANOTHER AGRICULTURAL LAND. THERE IS NO ADVERSE FINDI NG IN THE ASSESSMENT ORDER REGARDING THE CARRYING OF AGRICULTURAL ACTIVITY AND THEREFORE, ON THE AVAILABLE MATERIALS, IT IS ASSUMED TH AT THIS CONDITION STANDS SATISFIED. THE OTHER CONDITIONS RELATE TO PURCHASE OF ANOTHER LAND 'FOR BEING USED FOR AGRICULTURAL PURPOSES. IN SUC H VIEW OF THE MATTER IF THE PURCHASE OF THE AGRICULTURAL LAND IS HE LD TO BE VALID WITHIN THE STIPULATED TIME, THE CONDITION HAS TO BE T REATED AS FULFILLED. HOW THE CONSIDERATION WAS PAID IS IRRELEVANT SO LONG I TS VALIDITY AND GENUINITY REMAINS UNCHALLENGED. THE ASSESSING OFFICER HA S NOT TREATED THE TRANSACTION AS SHAM OR FICTITIOUS OR MANAGE D AND THEREFORE, THE CONDITION FOR PURCHASE OF THE LAND FO R THE PURPOSE OF AGRICULTURAL ACTIVITY HAS TO BE TREATED AS COMPLIED. IN THIS VIEW OF THE MATTER, THE GROUND NO. 2 IS TREATED AS ALLOWED. THE A PPELLANT HAS ALSO RAISED AN ARGUMENT, WITHOUT PREJUDICE TO THEIR ARGUM ENTS REGARDING THE ALLOWABILITY OF DEDUCTION U/S 54B THAT THE CAPIT AL GAINS IS ASSESSABLE IN THE HANDS OF THE APPELLANT IN INDIVIDUAL C APACITY. HOWEVER, SUCH AN ISSUE CANNOT BE CONSIDERED AT THIS STAGE WHEN THE SAME WAS NOT RAISED BEFORE THE ASSESSING OFFICER AND THE A SSESSMENT ORDER IS BASED ON THE RETURN FILED BY THE APPELLANT HIMSELF. FURTHERMORE, THE ABOVE ARGUMENT HAS NOT BEEN BACKED BY ADEQUATE EVIDENCES. IN ANY CASE, THIS ARGUMENT WAS ONLY AN ARGUM ENT WHICH IS NOT IN AGREEMENT TO THE GROUNDS RAISED AND WAS FURTH ERMORE WITHOUT PREJUDICE TO THE GROUNDS RAISED FOR THE ALLOWABILITY OF DEDUCTION U/S 54B. SINCE DEDUCTION U/S 54B HAS BEEN ALLOWED, THIS AR GUMENT IN ITSELF HAS LOST ITS BEARING. THEREFORE, THIS ARGUMENT IS TREATED AS DISMISSED. 6. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REVE NUE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED 'COMMISSIONER OF INCOME-TAX (APPEALS) FAILED T O APPRECIATE THAT THE GENERAL POWER OF ATTORNEY AND THE SO CALLED SALE DEED WERE SHAM DOCUMENTS PROCURED IN ORDER TO MAKE FRAUDULENT C LAIM U/S 54B OF THE INCOME -TAX ACT, 1 961. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN NOT CONSIDERING THE FACT THAT THE ASSESSEE AND THE VENDOR AR E HAVING SAME ADDRESS AND THEY ARE RELATED PARTIES; AND THAT TH ERE WAS NO ACTUAL PASSING OF THE SALE CONSIDERATION. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) ERRED IN NOT APPRECIATING THE FACT THAT THE DOCUMENTS OF TRANSFER OF IMMOVABLE PROPERTY ARE REQUIRED TO BE REGISTERED AND THE STAMP DUTY THEREON HAS ALSO TO BE PAID. 7. THE LD. DEPARTMENTAL REPRESENTATIVE STRONGLY SUP PORTED THE ORDER OF THE AO. HE SUBMITTED THAT THE ASSESSEE HA S WRONGLY CLAIMED DEDUCTION U/S.54B WITHOUT ACTUALLY PURCHASI NG THE LAND. IT 7 WAS A SHAM TRANSACTION ENTERED INTO BY CLOSELY RELA TED PARTIES JUST TO MAKE A FRAUDULENT CLAIM U/S.54 OF THE I.T. ACT. HE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BE SET-ASIDE AND THAT OF THE AO BE RESTORED. 8. THE LD. COUNSEL FOR THE ASSESSEE ON THE OTHER WH ILE SUPPORTING THE ORDER OF THE CIT(A) DREW THE ATTENTION OF THE B ENCH TO THE OBSERVATIONS OF THE HONBLE SUPREME COURT IN THE CA SE OF CIT VS. ARAVINDA REDDY REPORTED IN 120 ITR 46 WHICH READ AS UNDER : SALE', IN THE STRICT AND PRIMARY SENSE OF THE WORD, M EANS AN AGREEMENT FOR THE CONVEYANCE OF PROPERTY FOR A PRIC E IN MONEY; BUT THE WORD 'SALE' MAY BE USED IN LAW IN A WIDER SENSE AND SO APPLIED TO THE CONVEYANCE OF LAND FOR A PRICE CONSISTING WHOLLY OR PARTLY OF MONEY'S WORTH OTHER THAN THE CONVEYANCE OF SOME OTHER LAND. APPARENTLY HE CONSIDERED THAT A SALE FOR SOMETHING OTH ER THAN MONEY CAN IN A WIDER SENSE BE PROPERLY DESCRIBED AS A SA LE.' WE AGREE. THE SIGNIFICATION OF A WORD OF PLURAL SEMAN TIC SHADES MAY, IN A GIVEN TEXT, DEPEND ON THE PRESSURE OF THE C ONTEXT OR OTHER INDICIA. ABSENT SUCH COMPELLING MUTATION OF SENSE, THE SPEECH OF THE LAY IS ALSO THE LANGUAGE OF THE LAW. 3. WE FIND NO REASON TO DIVORCE THE ORDINARY MEANIN G OF THE WORD 'PURCHASE' AS BUYING FOR A PRICE OR EQUIVALENT OF PRICE BY PAYMENT IN KIND OR ADJUSTMENT TOWARDS AN OLD DEBT OR FOR OTHER MONETARY CONSIDERATION FROM THE LEGAL MEANING OF THA T WORD IN S. 54(1). IF YOU SELL YOUR HOUSE AND MAKE A PROFIT, PAY CAESAR WHAT IS DUE TO HIM. BUT IF YOU BUY OR BUILD ANOTHER, SUBJECT TO THE CONDITIONS OF S. 54(1), YOU ARE EXEMPT. THE PURPOSE IS PLAIN; THE SYMMETRY IS SIMPLE, THE LANGUAGE IS PLAIN. WHY MUTILATE THE MEANING BY LEXICAL LEGALISM. WE SEE NO STRESS IN THE SECTION ON 'CASH AND CARRY'. THE POINT PRESSED MUST, THEREFORE, BE NEGATIVED. WE HAVE DECLINED TO HEAR SRI S. T. DE SAI'S ARTILLERY FIRE ALTHOUGH HE WAS ARMED CAP A PIE WITH MITAKSHARA LORE AND LAW. A POINT OF SUFFOCATING SCHOLARSHIP SOMETIMES ARRIVES IN COU RT WHEN ONE NOSTALGICALLY REMEMBERS THE ESCAPIST VERSE : 'WHERE IGNORANCE IS BLISS, TIS FOLLY TO BE WISE. ' AMEN! A PASSING REFERENCE TO AVOIDANCE AND EVASION OF TAX WA S MADE AT THE BAR, A DUBIOUS REFINEMENT OF A DATED LEGAL CULTU RE SANCTIFIED, THOUGH, BY JUDICIAL DICTA. THE COURT IS NOT THE MINT OF VIRTUE AND ONE DAY IN OUR WELFARE STATE GEARED TO SOCIAL JUSTICE, TH IS CLEVER CONCEPT 8 OF 'AVOIDANCE' AGAINST 'EVASION' MAY HAVE TO BE EXPOSE D. ENOUGH UNTO THE DAY IS THE EVIL THEREOF. 9. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND IN THE INSTANT CASE THE AO DISALLOWED THE CLAIM OF DEDUCTI ON U/S.54B ON THE GROUND THAT THE ASSESSEE HAS NOT INVESTED THE CAPIT AL GAIN IN THE NEW ASSET AND THE CLAIM WAS MADE ONLY ON THE BASIS OF A N AGREEMENT TO PURCHASE OF THE SO-CALLED AGRICULTURAL LAND AND THE LAND IS STILL IN THE NAME OF SELLERS. THE NAME OF THE ASSESSEE HAS NOT BEEN ENTERED IN 7/12 EXTRACTS ETC. ACCORDING TO THE AO SINCE THE A GREEMENT TO SALE ENTERED INTO ON A STAMP PAPER OF RS.20/- HAS NOT BE EN REGISTERED BY THE REGISTERING AUTHORITY AND SINCE THE CONSIDERATI ON HAS BEEN CREDITED INTO THE ACCOUNT OF THE SELLER THROUGH A B OOK ENTRY ONLY, THEREFORE, THE DEDUCTION IS NOT AVAILABLE TO THE AS SESSEE U/S.54B OF THE I.T. ACT. WE FIND THE LD.CIT(A) ALLOWED THE CLAIM OF DEDUCTION U/S.54B ON THE GROUND THAT THE SALE AS WELL AS THE PURCHASE HAVE BEEN EFFECTED THROUGH THE DOCUMENT OF AGREEMENT TO SALE ALONG WITH POWER OF POSSESSION. HE WENT BY THE DEFINITION OF TRANSF ER PROVIDED U/S.2(47) OF THE I.T. ACT ACCORDING TO WHICH ACTUAL TRANSFER OF CAPITAL ASSETS TAKE PLACE WITHOUT FOLLOWING THE ESTABLISHED NORMAL PROCEDURE. ACCORDING TO HIM, THE TERM TRANSFER HAS BEEN DEFINE D IN SECTION 2(47) OF THE I.T. ACT IN AN INCLUSIVE MANNER FOR TRANSACT IONS RELATING TO CAPITAL ASSETS. WE FIND NO INFIRMITY IN THE ABOVE OBSERVATIONS GIVEN BY THE LD.CIT(A). ADMITTEDLY, WHEN THE AO ACCEPTS T HE SALE AS GENUINE ON THE BASIS OF AN AGREEMENT TO SALE, WE FA IL TO UNDERSTAND AS 9 TO HOW THE SAME PARAMETERS WILL NOT BE APPLICABLE F OR PURCHASE OF THE AGRICULTURAL LAND IN THE SAME MANNER. 9.1 WE FIND MERIT IN THE SUBMISSION OF THE LD. COUN SEL FOR THE ASSESSEE THAT IF THE PURCHASE OF AGRICULTURAL LAND THROUGH AN AGREEMENT TO PURCHASE CANNOT BE CONSIDERED AS PURCH ASE FOR THE PURPOSE OF CLAIMING DEDUCTION U/S.54B, THEN THE SAM E LOGIC SHOULD BE APPLICABLE FOR SALE OF THE LAND THROUGH AN AGREE MENT TO SALE AND IN THAT CASE NO CAPITAL GAIN WILL ARISE TO THE ASSESSE E ON ACCOUNT OF SALE THROUGH AN AGREEMENT TO SALE WITHOUT REGISTERING TH E DOCUMENTS THROUGH THE OFFICE OF THE SUB-REGISTRAR. IN THIS V IEW OF THE MATTER AND IN VIEW OF THE REASONING GIVEN BY THE CIT(A) WHILE ALLOWING THE CLAIM OF DEDUCTION U/S.54B OF THE I.T. ACT, 1961 WE FIND NO INFIRMITY IN HIS ORDER. ACCORDINGLY, THE ORDER OF THE CIT(A) ON THIS ISSUE IS UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DI SMISSED. 10. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED PRONOUNCED IN THE OPEN COURT ON 31-07-2014. SD/- SD/- (SHAILENDRA KUMAR YADAV ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER SATISH PUNE, 31 ST JULY 2014 COPY OF THE ORDER IS FORWARDED TO: 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-I, PUNE 4. THE CIT-I, PUNE 5. THE DR A BENCH, PUNE. 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE