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2020 (5) TMI 49 - AT - Income TaxDisallowance of deduction fu/s. 54B - lan d was not used for agricultural purpose as per report of the Talati, therefore, claim of deduction u/s. 54B was disallowed - HELD THAT - On identical issue in the case of coowners on the similar facts, the Co-ordinate Bench of the ITAT in the case of Balkrishna P. Trivedi 2020 (2) TMI 87 - ITAT AHMEDABAD have decided the issue of allowability of deduction u/s. 54B of the Act against the assessee. Disallowance u/s. 54EC - HELD THAT - Identical issue on similar facts in the case of other co-owners Balkrishna T. Trivedi 2020 (2) TMI 87 - ITAT AHMEDABAD is adjudicated in favour of the assessee. The ld. D.R. is fair enough not to controvert this fact that similar issue is adjudicated in favour of the assessee
Issues Involved
1. Disallowance of deduction for ?55,40,000/- claimed under Section 54B of the Income Tax Act, 1961. 2. Disallowance of ?50,00,000/- claimed under Section 54EC of the Income Tax Act, 1961. 3. Disallowance of brokerage expenses of ?5,00,000/-. 4. Rejection of claim for deletion of ?37,50,000/- from the income of the appellant for A.Y. 2010-11. Issue-wise Detailed Analysis 1. Disallowance of Deduction for ?55,40,000/- Claimed under Section 54B of the Income Tax Act, 1961 - Facts: The assessee claimed a deduction of ?55,40,000/- under Section 54B of the Act for A.Y. 2008-09. The Assessing Officer disallowed the claim, stating that no agricultural activities were carried out on the land, as evidenced by a letter from the Talati, Danilimda Taluka, City Ahmedabad. - CIT(A) Decision: The CIT(A) upheld the disallowance, stating that for the benefit of Section 54B, the land should have been used for agricultural purposes, which was not the case as per the Talati's report. - Appellate Tribunal Decision: The Tribunal dismissed the appeal, referencing similar cases of co-owners where the Co-ordinate Bench of the ITAT had decided against the assessee on identical issues. 2. Disallowance of ?50,00,000/- Claimed under Section 54EC of the Income Tax Act, 1961 - Facts: The assessee invested ?50,00,000/- in REC Bonds on 31.03.2007 and another ?50,00,000/- on 07.12.2007, claiming a total deduction of ?1,00,00,000/- under Section 54EC. The Assessing Officer allowed only ?50,00,000/-, citing a cap per financial year. - CIT(A) Decision: The CIT(A) upheld the Assessing Officer's decision, applying the cap of ?50,00,000/- per financial year. - Appellate Tribunal Decision: The Tribunal allowed the appeal, referencing a similar case of another co-owner where the Co-ordinate Bench had adjudicated in favor of the assessee, stating that the cap is per financial year and not per assessee. Therefore, investments made in two different financial years qualify for the deduction. 3. Disallowance of Brokerage Expenses of ?5,00,000/- - Facts: The CIT(A) disallowed the brokerage expenses of ?5,00,000/-, stating that they were not incurred in connection with the transfer of the asset but to yield a higher price. - Appellate Tribunal Decision: The Tribunal allowed the appeal, referencing similar cases of co-owners where the Co-ordinate Bench had decided in favor of the assessee, considering brokerage as an allowable expenditure in connection with the transfer of the asset. 4. Rejection of Claim for Deletion of ?37,50,000/- from the Income of the Appellant for A.Y. 2010-11 - Facts: The assessee claimed that ?37,50,000/- could not be taxed twice, as the entire claim of deduction under Section 54B was disallowed in A.Y. 2008-09. The assessee had deposited ?55,40,000/- in a capital gain deposit scheme but could only utilize ?17,90,000/- for the purchase of new land. - CIT(A) Decision: The CIT(A) rejected the claim due to the absence of relevant details. - Appellate Tribunal Decision: The Tribunal restored the issue to the Assessing Officer for verification, directing that the claim of deduction should be allowed if the impugned amount had already been taxed in A.Y. 2008-09. Conclusion - The appeal for the disallowance of ?55,40,000/- under Section 54B was dismissed. - The appeal for the disallowance of ?50,00,000/- under Section 54EC was allowed. - The appeal for the disallowance of brokerage expenses of ?5,00,000/- was allowed. - The appeal for the rejection of the claim for deletion of ?37,50,000/- was allowed for statistical purposes, subject to verification by the Assessing Officer. Order Pronounced in Open Court on 28-02-2020
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