2014 (3) TMI 466 - AT - Income Tax

Deletion of disallowance u/s 54B of the Act Sale of non-agricultural plots - Held that - The Revenue contended that the CIT(A) has erred in accepting the additional evidences furnished during the appellate stage without remanding the same to the AO - the additional evidences filed by the assessee were registered purchase deed of land, development permission and building use permission certificate issued by the Surat Municipal Corporation thus, the matter is remitted back to the AO for fresh adjudication after examining all the evidences in connection with the claim of the assessee for deduction u/s. 54F of the Act Decided in favour of Revenue.

Summary

Issues:
1. Disallowance of claim of exemption u/s. 54B
2. Acceptance of additional evidences during appellate stage without remanding to AO
3. Upholding the order of the Assessing Officer

Issue 1: Disallowance of claim of exemption u/s. 54B:
The appellant sold non-agricultural plots and claimed exemption u/s. 54B. The AO rejected the claim, stating it was an afterthought as the appellant had actually intended to claim exemption u/s. 54F. The CIT(A) allowed the claim, noting that it was a typographical error and that the appellant had taken steps consistent with claiming exemption u/s. 54F. The CIT(A) found that the appellant had opened a special bank account for construction activities, purchased land, and obtained necessary permissions before filing the return. The CIT(A) concluded that the appellant legitimately intended to claim exemption u/s. 54F. The Tribunal directed the AO to reexamine the issue considering all evidences.

Issue 2: Acceptance of additional evidences without remand:
The revenue contended that the CIT(A) erred in accepting additional evidences without remanding them to the AO. The additional evidences included registered purchase deed, development permission, and building use certificate. The Tribunal agreed with the revenue and remanded the issue back to the AO for fresh adjudication after considering all evidences, ensuring a proper opportunity of hearing to the assessee.

Issue 3: Upholding the order of the Assessing Officer:
The revenue appealed against the order of the CIT(A) and argued for a remand to the AO. The AR of the assessee agreed to the remand for fresh adjudication. The Tribunal allowed the appeal of the revenue for statistical purposes, setting aside the orders of the lower authorities and remanding the matter back to the AO to reexamine the claim of deduction u/s. 54F, ensuring a fair hearing to the assessee.

In conclusion, the Tribunal directed the AO to reconsider the appellant's claim of exemption u/s. 54F, considering all evidences, after the CIT(A) had allowed the claim based on the appellant's legitimate intentions and actions. The Tribunal upheld the revenue's appeal for statistical purposes, remanding the issue back to the AO for a fresh adjudication.