2017 (3) TMI 1762 - AT - Income Tax

Exemption u/s 54B - Asseesee purchased the property out of the sale consideration amount received by the Assessee under the agreement of sale before the actual date of execution of sale deed - Ex-parte order - HELD THAT - On last date of hearing i.e., 09.02.2017, hearing was adjourned at the request of the assessee to 30.03.2017. Despite having issued notice about the date of hearing, none appeared on behalf of the assessee. Therefore we had no option but to hear the appeal ex-parte qua the assessee. Accordingly, we heard the arguments of the revenue and having carefully perused the orders of the authorities below on the impugned issues raised before us in the light of revenue s contention, we find that CIT(A) has properly adjudicated all the issues raised before us and since no infirmity is pointed out therein, we confirm the order of the CIT(A). Accordingly, the appeal of the assessee stands dismissed.

Summary

Issues:

1. Rejection of deduction claim under section 54B of Income Tax Act.
2. Entitlement to deduction if property purchased before execution of sale deed.
3. Interpretation of legislative intention regarding deduction under section 54B.
4. Purchase of properties before and after sale for deduction eligibility.

Analysis:

1. The appellant challenged the rejection of the deduction claim under section 54B of the Income Tax Act. The Assessing Officer and the First Appellate Authority were accused of unjustly denying the deduction despite the appellant's eligibility. The appellant contended that the authorities erred in their decision.

2. The issue of entitlement to deduction when the property is purchased before the execution of the sale deed was raised. The appellant argued that the authorities incorrectly concluded that the deduction could not be claimed in such a scenario. The appellant emphasized that the use of sale consideration for purchasing agricultural land should warrant the deduction under section 54B, regardless of the sale deed execution date.

3. The appellant asserted that the authorities failed to grasp the legislative intention behind section 54B. According to the appellant, if the sale consideration is utilized for buying agricultural land, the appellant should be entitled to the deduction under section 54B, irrespective of the sale deed execution date. The appellant highlighted the importance of understanding the legislative intent in interpreting tax laws.

4. Lastly, the appellant pointed out that both properties were purchased using the sale consideration from the property sold. One property was acquired before the sale, and the other was bought after the sale. The appellant argued that this fact should support the eligibility for deduction under section 54B of the Income Tax Act. However, despite the appellant's arguments, the appeal was dismissed due to the absence of representation during the hearing, resulting in an ex-parte decision confirming the order of the CIT(A).