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TMI Blog2016 (5) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... session of the property assessee produced an undated notarised understanding on stamp paper of ₹ 10/-. For repossession of the property assessee produced an undated notarised understanding on stamp paper of ₹ 10/- between the buyer and seller However subsequently the transaction of sale has happened at the agreed price between the parties. Further it is difficult to appreciate that when assessee has received substantial consideration and only meagre consideration is outstanding how assessee has taken possession of the property back from the buyer without returning any payment to the buyer.- Decided against assessee Denial of deduction under section 54B - denial of claim as assessee is not an individual, but an HUF - Held that:- The impugned assessement year is AY 2012-13 and assessee is HUF which is not entitled to deduction u/s 54 B of the act. - Decided against assessee - ITA No.5521/Del/2015 - - - Dated:- 15-3-2016 - SHRI I. C. SUDHIR, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER For The Assessee : Sh. Ashwani Kumar, Self For The Revenue : Sh. Bharat Bhushan Garg, Sr. DR ORDER PER PRASHANT MAHARISHI, A. M. 1. This is an ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y and filed return of income on 28th of July 2012, declaring income of ₹ 7 7890/-and agricultural income of ₹ 128600/-. Assessee has sold agricultural land through agreement dated 21st of February 2012 on consideration of ₹ 19681600/-. Contention of the assessee was that the sale was made through two unregistered agreement of sale and possession of the property was given accordingly. According to the agreement the purchaser was to give balance consideration which was not given and therefore the possession was taken back on 15.03.2012. Therefore, there is no transfer according to the income tax act. However it was also noted by lower authorities that the possession of the property was handed over to the buyer. Against the total sale consideration of ₹ 1,96,81,600/- assessee has already received ₹ 1,70,00,000/- and balance of ₹ 26816000/- was shown to be outstanding .As the assessee has received substantial consideration and has also parted with the possession of the property Learned assessing officer was of the view that there is a transfer of an asset and capital gain is chargeable to tax. Further assessee has claimed deduction under section 54B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was submitted that assessee being an HUF is not entitled to the deduction as per clear cut language of the section. 7. We have carefully considered the rival contentions and also perused the details filed by the assessee. It is undisputed fact that assessee has entered into an agreement to sell with the buyer for consideration of ₹ 1,96,81,600/- and received part of the consideration of ₹ 1,70,00,000/- and the possession of the property was given to the buyer. According to the provisions of section 2(47) (v) of the act transfer includes any transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882.Therefore, in the transaction entered into by the assessee. All the ingredients of transfer are satisfied, and therefore we are of the view that though assessee might not have received the full consideration but transfer of property has occurred in view of handing over the possession of the property to the buyer. For repossession of property assessee produced a an undated notarised understanding on stamp paper of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to income-tax as income of the previous year in which the transfer took place, it shall be dealt with in accordance with the following provisions of this section, that is to say,-- (i) if the amount of the capital gain is greater than the cost of the land so purchased (hereinafter referred to as the new asset), the difference between the amount of the capital gain and the cost of the new asset shall be charged under section 45 as the income of the previous year; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be nil; or (ii) if the amount of the capital gain is equal to or less than the cost of the new asset, the capital gain shall not be charged under section 45 ; and for the purpose of computing in respect of the new asset any capital gain arising from its transfer within a period of three years of its purchase, the cost shall be reduced by the amount of the capital gain. 9. With effect from 1-4-2013 this section was amended as under CAPITAL GAIN ON TRANSFER OF LAND USED FOR AGRICULTURAL PURPOSES NOT TO BE CHARGED IN CERTAIN CASES. (1) Subjec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalogy the deduction under section 54B cannot be allowed. 11. However we have perused these decisions and found that following decision are directly on the issue of deduction u/s 54B of the Act in case of HUF. The issue before honourable Courts in following cases were as under :- a. CIT V G K Devarjulu 191 ITR 211 The assessee is a Hindu undivided family. In respect of the assessment year 1972-73, on sale of agricultural lands, it was assessed to capital gains on a sum of ₹ 2,99,500 which, on appeal to the Appellate Assistant Commissioner, was reduced to ₹ 1,30,500. On a petition filed by the assessee that it had purchased agricultural lands within two years from the date of sale, the Income-tax Officer allowed exemption from capital gains under section 54B(ii) of the Income-tax Act, 1961 (hereinafter referred to as the Act ). On the basis of an audit objection that exemption under section 54B(ii) of the Act is available only to individual assessees and not to a Hindu undivided family, the Income-tax Officer reopened the assessment under section 147(b) of the Act and the exemption granted under section 54B(ii) of the Act was withdrawn. b. CIT V R Vijay ..... X X X X Extracts X X X X X X X X Extracts X X X X
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