BALUBHAI MUSTUFABHAI MAHIDA, SURAT V. DCIT, CIRCLE-2(2), SURAT

ITA 580/SRT/2019

AI Insights

The case involves Balubhai Mustufabhai Mahida, the appellant, who contested the assessment order for the Assessment Year 2012-13, which included additions to his income from long-term capital gains and disallowances related to agricultural income and deductions under Section 54B of the Income Tax Act. The Assessing Officer had made these additions and disallowances based on the perceived higher valuation of sold agricultural land and lack of sufficient evidence for agricultural activities. The Tribunal's decision focused on the correct valuation of the land and the proper application of Section 54B, remitting some issues back to the Assessing Officer for further examination.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 302183 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: DB
• Next Hearing Date: 20-12-2022
• Assessment Year: 2012-2013
• Appeal Filed On: 19-12-2019
• Other Referred Cases: ACIT Vs. Shri Dilip Shoorji ITA No. 5987/Mum/2013, CIT Vs Gauragiben S Shodhna (2014) 108 DTR 442 (Guj), CIT Vs Puja Prints (2014) 360 ITR 697 (Bom), CIT Vs Daulal Mohta (HUF) (2014) 360 ITR 680 (Bom), Pradeep G Vora 58 taxmann.com 110 (Mum Trib)/(2015) 154 ITD 118 (Mum), Rubab M Kazerani 91 ITD 429 (Mum-TM), Jagrutiben V Patel Vs ITO Ward 2(2)(2), Surat and Bharvinaben V Patel Vs ITO Ward 2(2)(2), Surat ITA No. 650 & 651/Ahd/2017, Shri Mahadevbhai Mohanbhai Naik (ITA No. 820/Ahd/2016), CIT Vs Nitin Jayantilal Shah 48 SOT 16 (Ahd. Trib), Prembhai Kanjibhai Tandel Vs ITO 47 CH 724 (Ahd. Trib), CIT Vs Siddarth J Desai (1982) 10 Taxman 1 (Gujarat)
• Laws Referred To: Income Tax Act
• Result in Favour of: Matter Remanded
• Court: TRIBUNAL
• Keywords: Value adopted by valuation officer; Capital asset; Income from undisclosed sources; Cost of acquisition; Fair market value; Valuation report
• Section: 54; 154; 54B; 55A; 48

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JUDICIAL MEMBER AND DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER ITA No. 580/Srt/2019 (Assessment Year: 2012-13) (Physical hearing) Balubhai Mustufabhai Mahida, Post Valak, Valak Kamrej, Surat-394180 PAN No. BKDPM 8643 R Vs. D.C.I.T., Circle-2(2), Surat. Appellant/ assessee Respondent/ revenue Assessee represented by None (Written submission) Department represented by Shri Ashok B. Koli CIT-DR Date of hearing 21/12/2022 Date of pronouncement 29/12/2022 Order under Section 254(1) of Income Tax Act PER: PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by the assessee is directed against the order of learned Commissioner of Income Tax (Appeals)1, Surat (in short, the ld. CIT(A)) dated 18/10/2019 for the Assessment Year (AY) 2012-13 wherein the assessee has raised following grounds of appeal: “1. On the facts and in the circumstances of the case and in law the learned CIT(A) grossly erred by overlooking the explicit provision of Section 55A of Income Tax Act which have been amended with effect from 01/06/2012. 2. On the facts and in the circumstances of the case and in law the learned CIT(A) grossly erred by not considering the judicial pronouncements cited during appellate proceedings. 3. On the facts and in the circumstances of the case and in law the learned CIT(A) grossly erred by confirming an addition in respect of valuation without rebutting argument advanced during appellate proceeding. 4. On the facts and in the circumstances of the case and in law the Ld. CIT(A) grossly erred by not allowing the indexed cost of acquisition of Rs. ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 2 2,45,34,955/- (as per valuation report from registered valuer) and thereby disallowing appellant claim by Rs. 1,32,75,147/- (24534955-11259808). 5. On the facts and in the circumstances of the case and in law the learned CIT(A) grossly erred by not considering facts of the case holistically and confirmed the disallowance in respect of deduction U/s 54B of Income Tax Act to the tune of Rs. 8127603/-. 6. On the facts and in the circumstances of the case and in law the learned CIT(A) grossly erred by treating agriculture income of Rs. 312400/-. 7. The appellant craves leave to add, alter or withdraw any of the grounds of appeal.” 2. Brief facts of the case are that the assessee is an individual and derived income from long term capital gain and agricultural income, filed his return of income for the A.Y. 2012-13 on 15/02/2014 declaring income of Rs. 70,72,270/-. The case was selected for scrutiny. During the assessment, the Assessing Officer on perusal of details, found that the assessee has sold two non-agricultural land during the relevant financial year, one out of R.S. No. 200, 202, 176 Block No. 158, and other out of R.S. No. 177, Block No. 167, village Valak, Tehsil-Kamrej having area 10036.26 square meter and 1126.14 square meter respectively. First piece of land was sold for Rs. 4.01 crores and second piece of land at Rs. 45.04 lacs. The assessee while computing capital gain on sale of such piece of lands deducted index cost of Rs. 2.00 crores for piece of land No. 1 and Rs. 24,75,245/- for piece of land No. 2 on the basis of valuation report of Government Registered Valuer, as on 01/04/1981. The assessee also claimed cost of improvement of Rs. 44,38,758/- and Rs. 4,98,061/- for both the properties. On perusal of such report, the Assessing Officer was of the view that the value adopted by assessee on the basis of ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 3 Government registered valuer report as on 01/04/1981 seems to be on higher side. The Assessing Officer made a reference under Section 55A of the Income Tax Act, 1961 (in short, the Act to the Departmental Valuation Officer (DVO) under Section 55A of the Act on 16/02/2015. The assessee was also asked to furnish necessary evidence in respect of cost of improvement of both the properties and deduction under Section 54B of the Act of Rs. 65,96,358/- and Rs. 15,31,245/- respectively. The Assessing Officer noted that the assessee has not produced any evidence to substantiate such claim of improvement. 3. The Assessing Officer finally issued show cause notice dated 16/03/2015. The contents of show cause notice is recorded in para 3.1 of the assessment order. The Assessing Officer recorded that no reply was furnished by the assessee. The assessee could not justify the claim of deduction under Section 54, accordingly, the deduction under Section 54B was disallowed. The Assessing Officer further recorded that the DVO has not given any report and the matter was getting time bared so the Assessing Officer treated the value of entire sale consideration as long term capital gain in the following manner: “(i) R.S. No. 200, 202, 176, Block No. 158, Village Valak, Tal-Kamrej Full value of the consideration: Rs. 4,01,45,040/- Less: Expenditure on transfer --- Indexed cost of acquisition --- Indexed cost of improvement --- Long term capital gain Rs. 4,01,45,040/- (ii) R.S. No. 177, Block No. 167, Village Valak, Tal: Kamrej ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 4 Full value of the consideration: Rs. 45,04,560/- Less: Expenditure on transfer --- Indexed cost of acquisition --- Indexed cost of improvement --- Long term capital gain Rs. 45,04,560/- The total long term capital gain worked out to Rs. 4,46,49,600/- (Rs. 4,01,45,040/- + Rs. 45,04,560/-) and the assessee has already offered long term capital gain of Rs. 70,50,196/-. Therefore, Rs. 3,75,99,404/- (Rs. 4,46,49,600 –Rs. 70,50,196/-) is treated as income from long term capital gain.” 4. The Assessing Officer further noted that the assessee has shown agricultural income of Rs. 3,12,400/- while computing the total income. The assessee was asked to furnish the evidence of land holding and the activities carried out for earning such agricultural income. The Assessing Officer noted that no reply was furnished nor any evidence was given by Assessing Officer. Therefore, the agricultural income was treated as income from undisclosed source. 5. Aggrieved by the additions in the assessment order, the assessee filed appeal before the ld. CIT(A). Before the ld. CIT(A), the assessee filed detailed written submissions. The submission of assessee is recorded in para 6 of order of ld. CIT(A). On the issue of fair market value, the assessee submitted that the assessee has adopted indexed cost of acquisition of Rs. 2.00 crores and Rs. 24.75 lacs and indexed cost of improvement of Rs. 44.38 and 4.98 lacs respectively from the sale consideration. The Assessing Officer asked to furnish the documents regarding working of indexed cost. The assessee furnished valuation ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 5 report of Government Registered Valuer. The assessee stated that the land sold by assessee was inherited and was used for agriculture purposes only. The Assessing officer assumed that the valuation of property as on 01/04/1981 is estimated on higher side by the DVO. The Assessing Officer made reference to DVO. The report of DVO was not received till end of March, 2015 as the case was getting time barred, the Assessing Officer did not grant deduction on account of cost of acquisition and improvement. The Assessing Officer made additions subject to correction in the valuation of property on the basis of report of DVO and to compute the capital gain. The main dispute between the assessee and the revenue relates to cost of acquisition of property. The fair market value as on 01/04/1981 adopted by assessee is duly supported by documentary evidence in the form of valuation report of Government approved valuer which was considered on higher side by the Assessing officer. The Government approved valuer adopted the rate of land at Rs. 280 per square meter, whereas the DVO estimated the rate of land at Rs. 128.50 per square meter vide his report dated 30/09/2015. The DVO asked the assessee to file his objection if any against the proposed estimation of rate, in response thereto, the assessee filed his objection on 20/10/2015. The assessee objected against value determined by the DVO on the ground that the DVO vailed to point out any defect in his valuation report. The value adopted by the DVO is totally baseless and ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 6 does not pertain to the land situated nearby locality of land in question. The area and other factors like sale instances are not similar, thus there is no comparison between the impugned land and the instances. 6. The assessee also stated that the provisions of Section 55A(a) has been amended w.e.f. 01/07/2012, which provides that the Assessing Officer can refer the matter to the DVO if value claimed by assessee as per estimate made by registered valuer is at variance with its fair market value in the opinion of Assessing Officer. The amended provisions are applicable from 01/07/2012 and considering the nature and transaction of which the provisions applied it can be said that the same is applicable from financial year 2012-13 onwards. The assessee has sold property prior to amendment. The assessee also relied on decision of Tribunal in ACIT Vs. Shri Dilip Shoorji ITA No. 5987/Mum/2013 dated 12/07/2017. 7. On the disallowance of cost of improvement, the assessee stated that during the assessment, the assessee was asked to furnish relevant evidence. The Assessing Officer in assessment order noted that the assessee failed to submit evidence in absence of any evidence, the Assessing Officer disallowed the cost of improvement. The assessee stated that major payments were made to the government authorities for converting use of land for non-agricultural purpose. The amount of Rs. 20.00 lacs were paid vide Demand Draft No. 118795 for amenity fees. The particulars of this demand draft tallies with the challan issued by the ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 7 Surat Urban Development Authority (SUDA) and the assessee was allowed for deduction of Rs. 20.00 lacs. The remaining cost of improvement are also genuine, though proof of such cost of improvement is not available with the assessee as the same was misplaced. 8. On the disallowance of deduction under Section 54B of Rs. 81,27,603/-, the assessee stated that the assessee claimed deduction of Rs. 54B of Rs 65,96,358/- and Rs. 15,31,245/- respectively. The Assessing officer recorded that the lands sold was non-agricultural land and open land. Such observation was made without providing sufficient opportunity to the assessee. The assessee submitted that the land sold was used for agricultural purposes which is evident from the entries on Form No. 7/12. The land was never put to non-agricultural activities by the assessee. The Assessing Officer disallowed deduction under Section 54 without providing any opportunity to him. The assessee also filed certificate of Shree Kamrej Vibhag Fruit & Vegetable Growers Ltd. and submitted that he was unable to file such evidence before the Assessing Officer as the very short time was allowed. 9. On the issue of treating the agricultural income as income from undisclosed source of Rs. 3,12,400/-, the assessee submitted that he has filed document of agricultural holdings and no sufficient time was given to assessee for collecting and filing sufficient evidence. The assessee submitted that the agricultural activities were carried out by assessee for ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 8 many years. The assessee also relied on the certificate issued by Valak Gram panchayat wherein the assessee was given certificate about growing Bananas. 10. On the submission of assessee, the ld. CIT(A) directed the Assessing Officer to furnish his remand report. The Assessing Officer furnished his remand report dated 26/03/2017. The contents of remand report is recorded by the ld. CIT(A) in para 7 of his order. The Assessing Officer in his remand report reported that the assessee sold two immovable properties on 02/03/2012 and claimed indexed cost and cost of improvement. The assessee has sold non-agricultural land. The assessee was issued show cause notice vide order sheet entry dated 16/01/2015 to furnish copy of sale deed of land and the purchase deed of the acquired land and the details of land used for agricultural purposes in two years immediately preceeding the date on which the transfer took place to justify the claim under Section 54B of the Act. The assessee failed to furnish relevant document, therefore, in absence of explanation, deduction was disallowed. On the issue of valuation of both the assets sold by assessee, the Assessing Officer reported that the assessment order was passed on 20/03/2015 subject to modification/rectification in the assessment order on the receipt of valuation report. The Assessing Officer after referring the various evidences with regard to deduction under Section 54B, held that during the remand report, Talati-cum-Mantri ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 9 was asked to attend his office to prove the authenticity of the certificate issued by him on 07/04/2015 alongiwth witness mentioned on the certificate. Who was examined? Statement of Talati was recorded on 24/03/2017. The Assessing Officer without recording the contents of statement, reported that the report of Talati-cum-Mantri is factually incorrect. The summon to Manager of Shree Kamrej Vibhag Fruit & Vegi Growers Ltd. was also issued, who attended the office of Assessing Officer on 24/03/2017 and the certificate issued by them was found to be correct. The Assessing Officer reported that the assessee has no Banana tree on the said land during the relevant period as per the documentary evidence furnished by assessee for claiming deduction under Section 54B of the Act was treated as inadmissible. Thus, the Assessing Officer supported the order of his predecessor on disallowance under Section 54B of the Act. In respect of disallowance of cost of improvement, the assessee filed copy of receipt of Rs. 30.00 lacs on account of amenity fees paid to SUDA and claimed that deduction to that extent may be allowed. The Assessing Officer reported that he obtained information from SUDA vide letter dated 22/03/2017 wherein it was confirmed that the assessee has made the payment of amenity of Rs. 30.00 lacs on 25/03/2011. No other evidence was filed in support of other claim of improvement. Thus, the cost of improvement of Rs. 30.00 lacs is appearing in the bank statement of assessee for remaining cost of ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 10 improvement, the Assessing officer reported that the assessee does not deserve for any other relief against cost of improvement. 11. On the treatment of agriculture income, the Assessing Officer reported that the claim of assessee is not substantiated with proper documentary evidence and rather there is contradiction in the documentary evidences furnished by assessee. Thus, the treatment of income from other sources were right. On the issue of valuation of asset, the Assessing Officer reported that after receipt of report of DVO who had passed the order under Section 154 on 04/03/2016 modifying the assessment order dated 25/03/2015. Copy of remand report was provided to the assessee. The assessee filed his rejoinder to the remand report of the DVO. The contents of rejoinder of assessee is recorded in para 7.2 of order of ld. CIT(A). 12. The ld. CIT(A) after considering the assessment order, submission of assessee and the remand report furnished by Assessing Officer on the issue of fair market value of assets as on 01/04/1981 held that the assessee adopted value of land as on 01/04/1981 @ Rs. 280 per square meter on the basis of Government approved valuer. However, the DVO suggested/valued cost of land as on 01/04/1981 @ Rs. 128.50 per square meter. The Assessing Officer on the basis of report of DVO has rectified the assessment order, thus the corresponding ground of appeal raised by the assessee was rejected. ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 11 13. On the issue of cost of improvement of Rs. 49.36 lacs, the ld. CIT(A) on the basis of report of DVO about the confirmation of charges paid to SUDA, allowed deduction of Rs. 20.00 lacs out of Rs. 30.00 lacs and on the submission of assessee that there is supporting evidence for remaining balance of Rs. 29.36 lacs, the ld. CIT(A) granted partial relief to the assessee. 14. On the claim of deduction under Section 54B of Rs. 81,27,603/-, the ld. CIT(A) noted that the assessee sold original land on 08/03/2016 and purchased new agricultural land and claimed deduction. The Assessing Officer disallowed deduction on the ground that the asset sold is not agricultural land. No other violation was found out by the Assessing officer. The ld. CIT(A) recorded that the assessee has received sale consideration from 25/03/2011. The land was converted into non- agricultural land by the District Collector vide order dated 11/01/2011 on which the assessee received RS. 1.10 crore. The evidence filed by the assessee shows that the assessee was cultivating fruits and vegetables. However, Form No. 7/12 for years 2010-11 and 2011-12 it is shown as ‘Patdar’ meaning ‘non-cultivated’, though the assessee has agricultural income of Rs. 3,12,400/- for A.Y. 2012-13. On the basis of such observation, the ld. CIT(A) was of the view that the land till 11/11/2011 was agricultural land. Out of Rs. 4.01 crores, the assessee received Rs. 1.10 crore, thus the basis for disallowance of deduction ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 12 under Section 54B is incorrect. The Assessing Officer failed to examine the crucial criteria. The ld. CIT(A) also held that in his opinion, the assessee failed to establish that the land was used for agricultural purposes for two years immediately preceeding the date of sale and confirmed the action of Assessing Officer. 15. On the issue of agricultural income in treating unexplained income, the ld. CIT(A) held that once he has held that land in question was not agricultural land hence, there cannot be any agricultural income and no agricultural income was disclosed in A.Y. 2010-11 and 2011-12. The agricultural income is claimed to justify within Section 54B of the Act. Thus, the ld. CIT(A) confirmed the action of Assessing officer. Further aggrieved, the assessee has filed the present appeal before this Tribunal. 16. None appeared on behalf of assessee despite service of notice of hearing on more than two occasions. We find that the assessee has filed written submission on record with the contention to adjudicate the matter on the basis of written submission, therefore, we decide it to adjudicate the appeal on the basis of written submission and after hearing the submissions of learned Commissioner of Income Tax-Departmental Representative (ld. CIT-DR) for the revenue. 17. We have considered the written submissions of the assessee for the purpose of adjudication of various grounds of appeal. Grounds No. 1 to 4 of the appeal relate to reference to DVO and not allowing indexed cost ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 13 as per valuation of registered valuer. The assessee in his written submission submitted that two subject lands were converted into non- agricultural land vide order dated 11/11/2011 and were sold on 02/03/2012 and 15/03/2012 respectively. The land were converted into non-agricultural land immediately before sale took place i.e. 3 to 4 months prior to sale. The lands per se were agricultural land on record. During the assessment, very limited opportunity was given to the assessee. During the course of assessment, the Assessing Officer referred the matter to the DVO. The assessee further stated that reference to DVO cannot be made under Section 55A for A.Y. 2012-13, unless the Assessing Officer was of the view that the fair market value claimed by assessee on valuation report is on lower side and therefore, no addition on the basis of DVO report can be made to the tune of Rs. 1.32 crore. The assessee has sold land prior to 01/07/2012, therefore, the amended provision substituted in clause (a) of Section 55A wherein “is less than is fair market value” was substituted with the words “is no variance” with its fair market value was inserted. The assessee has also stated that the Assessing Officer cannot assume jurisdiction for referring the matter to DVO unless, he is of the opinion that the fair market value of land determined by the registered valuer is less than fair market value, thus the reference made to DVO was without jurisdiction. The assessee has also relied on various case laws as under: ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 14 (i) CIT Vs Gauragiben S Shodhna (2014) 108 DTR 442 (Guj) (ii) CIT Vs Puja Prints (2014) 360 ITR 697 (Bom) (iii) CIT Vs Daulal Mohta (HUF) (2014) 360 ITR 680 (Bom) (iv) Pradeep G Vora 58 taxmann.com 110 (Mum Trib)/(2015) 154 ITD 118 (Mum) (v) Rubab M Kazerani 91 ITD 429 (Mum-TM). (vi) Jagrutiben V Patel Vs ITO Ward 2(2)(2), Surat and Bharvinaben V Patel Vs ITO Ward 2(2)(2), Surat ITA No. 650 & 651/Ahd/2017) (vii) Shri Mahadevbhai Mohanbhai Naik (ITA No. 820/Ahd/2016) (viii) CIT Vs Nitin Jayantilal Shah 48 SOT 16 (Ahd. Trib) (ix) Prembhai Kanjibhai Tandel Vs ITO 47 CH 724 (Ahd. Trib). 18. On the other hand, the ld. CIT-DR for the revenue supported the order of the lower authorities. 19. We have considered the written submission of assessee on this issue and the submission of the ld. CIT-DR for the revenue and have gone through the orders of the lower authorities carefully. There is no dispute that the assessee has sold two non-agricultural land. The transaction of sale took place on 02/03/2012 and 15/03/2012. Admittedly, the transaction of transfer of land took place prior to 01/07/2012, thus it is now settled position under law by various decisions of superior courts, amended provisions of Section 55A(a) of the Act wherein the word “is at variance” was substituted, is not applicable for A.Y. 2012-13. We find that on similar issue, the combination of this Bench in Ranchod Bhai C Patel Vs OTO (2021) 123 taxmann.com 215 (Surat-Tribunal) by following the decision of Hon’ble Jurisdictional High Court in CIT Vs Gauragiben S Shodhna (supra) and the decision of Hon’ble Bombay High Court in CIT Vs Puja ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 15 Prints (supra), held Amendment brought in section 55A(a) with effect from 1-7-2012 by Finance Act, 2012, according to which reference could be made by Assessing Officer to DVO if value of immovable property determined by assessee was lesser than FMV of property, is applicable prospectively. Thus, the reference made by the assessing officer under section 55A(a) is not competent and report received in such reference cannot be relied. 20. Considering the consistent decision of Tribunal which was passed by following the decision of Hon’ble Jurisdictional High Court, we direct the Assessing Officer to adopt the value of land as per registered valuer’s report and computed the capital gain accordingly. In the result, grounds No. 1 to 4 of this appeal are allowed. 21. Ground No. 5 of the appeal relates to disallowance of deduction under Section 54B of the Act. The assessee in his written submission, submitted that the assessee has sold two piece of agricultural lands after converting into non-agricultural. Before the lower authorities, the assessee vehemently submitted that for claiming such deduction, the addition is that the land was being used for agricultural purposes prior to two years of its sale. The assessee furnished the land record to substantiate such contention. The Assessing officer in his conclusion accepted that the certificate from cooperative societ4y is in consonance with the claim of assessee. Remand report of Assessing Officer also accept the same fact. ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 16 The ld. CIT(A) despite accepting such fact, confirmed the disallowance under Section 54 of the Act. The assessee stated in its written submission that the Talati certified that the agricultural activities were carried out on the subject land. Such certificate was not accepted by the Assessing Officer. The Assessing Officer reported that in question No. 3 asked to Talati, he confirmed that the said certificate was issued by his predecessor in presence of three witnesses. No adverse remark was made by Assessing Officer. The ld. CIT(A) also noted in his finding that no agricultural income was declared by assessee in two financial years. The assessee had submitted that he was having only agricultural income during two preceeding years and agricultural income is exempt so he has not filed any return of income for immediately two financial years. The revenue record shows that bore well in the said land as recorded in the certificate of Talati which shows the irrigation facility and land cannot be treated as barren land (Patdar). 22. On the other hand, the ld. CIT-DR for the revenue supported the order of lower authorities. The ld. CIT-DR submits that the assessee failed to prove the claim of deduction under Section 54B within four corners of law, therefore, the claim of assessee was not allowed. 23. We have considered the submission of ld. CIT-DR and the written submission of assessee, we find that the Assessing Officer disallowed the deduction under Section 54 by taking a view that no relevant information ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 17 and documents were furnished to substantiate such claim. We find that before the ld. CIT(A), the assessee filed details written submissions. On the submission of assessee, the remand report was called for from the Assessing Officer which we have already recorded above. After considering the remand report of Assessing Officer and the submission of assessee, the ld. CIT(A) recorded contradictory finding on one hand, the ld. CIT(A) recorded that the claim of assessee is in order and on the other hand, confirmed the action of Assessing Officer by holding that the land sold by assessee was not agricultural land. We find that the order of ld. CIT(A) is self contradictory and not liable to be sustained. We find that on the similar issue, the Hon’ble Jurisdictional High Court in CIT Vs Siddarth J Desai (1982) 10 Taxman 1 (Gujarat) has determined 14 principals to ascertain the nature of land on the date of transfer and two determine whether the land was agricultural land or not, therefore, keeping in view the binding decision of Hon’ble Jurisdictional High Court, we remit the issue back to the file of Assessing Officer to consider the decision of Siddarth Desai (supra) and pass the order in accordance with law. The Assessing Officer is directed to provide fair and reasonable opportunity to the assessee before passing the order. The assessee is also directed to provide complete details of agricultural activities and evidence thereof, date of sale of land and the acquisition of new agricultural land. In the result, this ground of appeal is allowed for statistical purposes. ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 18 24. Ground No. 6 of the appeal relates to treatment of agricultural income as income from unexplained sources. The assessee in its submission submitted that during the remand proceedings, the Manager of Cooperative society admitted that the assessee sold agricultural produce during preceeding two assessment years. The ld. CIT(A) also accepted that the agricultural activities were carried out by the assessee. The assessee has furnished complete details of agricultural activities during the appellate stage to substantiate the agricultural income. 25. On the other hand, the ld. CIT-DR for the revenue supported the orders of lower authorities. The ld. CIT-DR submits that the assessee was not shown any agricultural activities in preceeding years. 26. We have considered the submission of ld. CIT-DR and the written submission of assessee and have also gone through the orders of the lower authorities carefully. We find that the Assessing Officer treated the agricultural income as income from undisclosed sources by taking a view that no details or evidence was furnished by the assessee. We find that before the ld. CIT(A), the assessee specifically stated that he was not having any other income except agricultural income, thus no return of income was filed by the assessee in two preceeding years. We find that the ld. CIT(A) confirmed the action of Assessing Officer by holding that the land was not used for agricultural purpose in year 2010-11 and 201112, hence, there cannot be any agricultural income. We find that it ITA No. 580/Srt/2019 Balubhai Mustufabhai Mahida Vs DCIT 19 is an undisputed fact that the assessee converted the nature of lands from agricultural to non-agricultural lands. The size of agricultural land was more than 11,000 square meters. It is not the case of revenue that the assessee has sold entire agricultural holdings. On perusal of Form 7/12 for A.Y. 2012-13, the assessee was growing sugarcane. However, we find that the assessee has not furnished any evidence for sale of sugarcane. The facts remained the same that the assessee is still holding some agricultural land, therefore, we deem it appropriate to restore this issue to the file of Assessing officer to consider various evidences and in the event the assessee is allowed deduction under Section 54B of the Act, this issue be adjudicated thereafter. In the result, this ground of appeal is allowed for statistical purposes. 27. In the result, this appeal of assessee is partly allowed. Order pronounced in the open court on 29 December, 2022. Sd/- Sd/- (Dr. ARJUN LAL SAINI) (PAWAN SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER Surat, Dated: 29/12/2022 *Ranjan Copy to: 1. Assessee – 2. Revenue - 3. CIT(A) By order 4. CIT 5. DR 6. Guard File Sr Private Secretory, ITAT, Surat // True Copy //