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2015 (7) TMI 1111 - AT - Income TaxReopening of assessment - statutory exemption under section 54B denied - Held that - The assessee initially contended that he is merely agriculturist and the land in question falls outside the municipal limit, therefore no capital gain arises. Therefore, the story propounded by the assessee was not proved through any evidence or material on record. The Assessing Officer, while recording the reasons for re-opening of the assessment noted in the reasons that he has reason to believe that capital gains on sale of land has escaped assessment. The facts and circumstances clearly show that Assessing Officer was justified in recording reasons for re-opening of the assessment and issuing notice against the assessee. During the course of arguments, ld. counsel for the assessee did not argue on this ground and have not contributed anything to challenge the findings of the authorities below for initiating the proceedings under section 148 of the Act As for exemption under section 54B AO merely presumed that since Sale Deed was entered into on 01.12.2009 with Asian Educational Society and Agreement to Purchase was prior to that date and the assessee did not get possession of the same, therefore claim of assessee not found justified. The assessee, however, explained the reasons why the possession could not be taken because the seller has not turned up for handing over possession to the assessee or for completion of the sale. The case law relied upon by the assessee support the case of the assessee that it may be a case of transfer under compelling reasons and the ld. CIT(Appeals) also without giving any reasons for decision, rejected the claim of assessee. Similarly, assessee also failed to explain that agreement to sell was executed in name of Baljit Singh and litigation is also in name of Baljit Singh and assessee has to correlate all facts.. We, accordingly, set aside the order of authorities below and restore this issue to the file of Assessing Officer with direction to re-decide the matter in issue by giving specific finding of fact in the assessment order - Decided partly in favour of assessee for statistical purposes.
Issues Involved:
1. Re-opening of the assessment under section 148 of the Income Tax Act. 2. Refusal to grant statutory exemption under section 54B of the Income Tax Act. Issue-wise Detailed Analysis: 1. Re-opening of the Assessment under Section 148 of the Income Tax Act: The assessee challenged the re-opening of the assessment under section 148 on the grounds that the due date for filing the return was 15.10.2010, making the notice issued on 06.09.2010 invalid. The Assessing Officer (AO) issued the notice based on the discovery that the assessee sold land for Rs. 1,55,20,000/- but did not file a return by the due date. The AO believed that capital gains on the land sale had escaped assessment, justifying the re-opening. The CIT(A) found no evidence supporting the assessee's claim of business activity and upheld the AO's decision. The Tribunal agreed with the CIT(A) and dismissed the assessee's ground, affirming the validity of the re-opening under section 148. 2. Refusal to Grant Statutory Exemption under Section 54B of the Income Tax Act: a. Deposit under Capital Gains Accounts Scheme (CGAS): The assessee claimed exemption under section 54B, stating a deposit of Rs. 50 lacs was made with Punjab National Bank under CGAS on 14.10.2010. The AO and CIT(A) denied the claim, stating the deposit was made after the due date for filing the return under section 139(1) (31.07.2010). However, the Tribunal referred to the Punjab & Haryana High Court decision in CIT Vs Ms. Jagrity Aggarwal, which allows exemption if the deposit is made within the extended period under section 139(4). Since the assessee filed the return on 05.10.2010 and deposited the amount on 14.10.2010, it was within the permissible period under section 139(4). Thus, the Tribunal allowed the exemption for Rs. 50 lacs. b. Advance Payment for Land Purchase: The assessee also claimed exemption for an advance of Rs. 50 lacs paid to Shri Ajmer Singh and others. The AO disallowed this claim, noting the agreement to purchase was before the first sale of land, and the assessee did not take possession. The CIT(A) upheld this decision. The Tribunal found that the AO did not consider the assessee's explanations and supporting documents, including the litigation for specific performance. The Tribunal cited relevant case law supporting the assessee's position and remanded the issue back to the AO for re-evaluation, instructing the AO to provide specific findings and consider the documentary evidence and legal precedents. Conclusion: The Tribunal partly allowed the appeal, validating the re-opening of the assessment under section 148 and granting exemption under section 54B for the deposit made under CGAS. The issue of exemption for the advance payment was remanded to the AO for reconsideration. The Tribunal directed the AO to reassess this matter, providing a detailed and reasoned order based on the evidence and legal principles.
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