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2017 (12) TMI 1852 - AT - Income TaxExemption u/s 54B - whether land transferred was agricultural land? - D.R said that the Adangal extract and other documents said to be obtained from the Village Administrative Officer cannot conclude that the land in question is agricultural land - HELD THAT - From material available on record it appears that the assessee planted some coconut trees in the land in question. The assessee has also produced copies of Adangal extract to establish that the land was used for cultivation. Adangal extract otherwise known as Village Account No.2 was maintained by the Village Administrative Officer in the regular course of performing his official function. The Village Administrative Officer being the field level officer, has a duty to record the cultivation in Village Account No.2 / Adangal extract. To establish the cultivation, the only document available is the Adangal extract. Therefore, the Adangal extract cannot be brushed aside so lightly when the assessee produced the same to establish his case that the land in question was used for agricultural activities. Assessing Officer has not examined whether the assessee invested the money and actually purchased the property as claimed. A reference about the advance given by the assessee was found in the assessment order. However, there was no reference about the purchase of property. The assessee now claims that he is ready and willing to produce the copy of sale deed before the AO. Therefore, this Tribunal is of the considered opinion that the Assessing Officer shall re-examine the issue afresh.Appeal filed by the Revenue is allowed for statistical purposes.
Issues:
Claim of exemption under Section 54B of the Income-tax Act, 1961. Analysis: The appeal before the Appellate Tribunal ITAT Chennai involved the claim of exemption under Section 54B of the Income-tax Act, 1961. The Revenue contended that the land sold by the assessee, located within the city limit, did not qualify as agricultural land for the purpose of claiming the exemption. The Departmental Representative argued that the documents provided by the assessee were insufficient to prove the agricultural nature of the land and questioned the lack of evidence regarding investments made by the assessee. On the other hand, the assessee's representative argued that the land was used for cultivation and the sale proceeds were reinvested in agricultural land, justifying the claim for exemption. The Tribunal noted that the Adangal extract, a document provided by the assessee, indicated cultivation activities on the land. However, the Assessing Officer had not verified the actual purchase of the property despite evidence of an advance payment. Therefore, the Tribunal set aside the decisions of the lower authorities and remitted the issue back to the Assessing Officer for a fresh examination, emphasizing the need for proper verification and giving the assessee an opportunity to produce necessary documents. The Tribunal emphasized the importance of the Adangal extract as evidence of cultivation activities on the land claimed to be agricultural. It noted that the Village Administrative Officer maintained this document in the regular course of official duties to record cultivation details. The Tribunal highlighted that the Assessing Officer failed to adequately consider the evidence presented by the assessee, including the Adangal extract and the claim of investment in agricultural land. The Tribunal directed the Assessing Officer to re-examine the matter thoroughly, considering all evidence provided by the assessee, including the potential production of a sale deed, and make a decision in accordance with the law, ensuring a fair opportunity for the assessee to present their case. The Tribunal addressed the cross-objection filed by the assessee, noting that it was filed solely to support the order of the CIT(Appeals) and, as a result, deemed infructuous. Consequently, the Tribunal allowed the appeal filed by the Revenue for statistical purposes and dismissed the cross-objection filed by the assessee. The judgment was pronounced on 28th December 2017 in Chennai.
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