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TMI Blog2017 (3) TMI 1041X X X X Extracts X X X X X X X X Extracts X X X X ..... nd report of the AO, submissions made including judicial citations given therein and find that the AO has issued notice to the appellant before initiating reassessment proceedings. Notices issued by the AO were refused to be received by the appellant. Her son and co-owner of the property attended the proceedings once in his case and filed the details of the property sold by them. Reassessment proceedings were started on the basis of material available on record. 4.6 However, the case law relied on by the appellant does not have applicability to the facts of the case as the service of notice was duly effected. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an in-built idea of fairness to taxpayer (Asstt. CIT vs. Rajesh Jhaveri Stock Brokers (P) Ltd. (2007) 291 ITR 500 (SC). In determining whether commencement of reassessment proceedings is valid, the Court has only to see whether there is prima facie some material on the basis of which the Department opened the case. The sufficiency or correctness of the material is not a thing to be considered at this stage as held by the Supreme Court in the case of Raymond Woollen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the absence of any evidence being filed by the appellant in the cross reply, I reject the claim of land leveling expenses made by the appellant. 5.14 As regards the claim of deduction u/s 54 of the I.T. Act is concerned, the AO in his remand report has stated that the appellant is entitled to the claim of deduction under this section to the extent of investment made by her for purchase of agricultural land in her name, solely or jointly. The appellant in this case has purchased agricultural land for Rs. 9,00,100/- on 01-10-2010 for which claim of deduction uu54B of the I.T. Act has been accepted by the AO. Further, appellant has purchased land of Rs. 5,20,050/- on 26-08- 2006 for which claim of deduction u/s 54B of the I.T. Act has not been accepted by the AO in the remand report. No deduction will be available to the appellant for the land purchased in her name in F.Y. 2006-07 as the provisions of sub-section (1) of Section 54B of the I.T. Act require that investment of Long term capital gains on sale of agricultural land has to be made for the purchase of new agricultural land within two years from the date of transfer of the original asset (agricultural land). In this case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... adicted the said evidence. Therefore, the FMV as determined by the assessee should be accepted. Further, even as per the DLC value of the agricultural land dated 05.08.1998 and applying the reverse indexation, the FMV as on 01.04.1981 works out to Rs. 69,015/-. Therefore, there is no reason to take the same at Rs. 60,483/- even if the Ld. AR of the assessee agrees to take the FMV as on 01.04.1981 at Rs. 60,483/-. This apart the land of the assessee being on the main road and having commercial potential, the value as determined by the AO as on 01.04.1981 for an agricultural land at least should be doubled which gives the value at Rs. 1,21,000/-. Therefore, the value adopted by the assessee as on 01.04.1981 at Rs. 1,21,000/- should be accepted and the AO be directed to allow the indexation benefit accordingly. (b) Indexed Cost of Improvement The assessee has claimed cost of improvement of Rs. 20,000/- on account of land levelling expenses in the FY 2007-08. This expenditure was incurred for removing the Kacchi dol and the Nali before selling the land. This work was done by utilising the JCB. This expenditure is very reasonable. There is no finding of the lower authorities that suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as under: "23. Consequences of execution of the agreement to sell are also very clear and they are to the effect that the appellants could not have sold the property to someone else. In practical life, there are after executing an agreement to sell an immoveable property in favour of one person, tries to sell the property to whose favour the right provision has been incorporated in the Act, is also very clear that events when a person, even another. In our opinion, such an act would not be in accordance with law because once an agreement to sell is executed in favour of one person, the said person gets a right to get the property transferred in his favour by filing a suit for specific performance and therefore, without hesitation we can say that some right, in respect of the said property, belonging to the appellants had been extinguished and some right had been created in favour of the vendee/transferee, when the agreement to sell had been executed. 24. Thus, a right in respect of the capital asset, viz. the property in question had been transferred by the appellants in favour of the vendee/transferee on 27th December, 2002. The sale deed could not be executed for the reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 52.14 sq. yard sold for Rs. 12,000/- is more reasonable. This is because as per this sale deed the rate works out at Rs. 222/- per sq. Yard. The assessee's land is 3,607 sq. yard and adopting this rate its value comes to Rs. 8,00,754/- but assessee has only considered approximately 15% of this value i.e. Rs. 1,20,113/- which is rounded off by the assessee to Rs. 1,21,000/- as the fair market value of the agricultural land as on 01-04-1981. Further, the cost of improvement claimed on account of land levelling charges of Rs. 20,000/- to remove the Kachi Dol and to make the land even which because of the irrigation nail was uneven by using the JCB is reasonable. Therefore, the AO is directed to consider the indexed cost of acquisition and improvement of the agricultural land sold by the assessee at Rs. 12,02,592/- as claimed by the assessee. Thus Ground No. 2 of the assessee is allowed. 3.4.1 In respect of Ground No. 3, it is noticed that that the assessee clamed deduction u/s 54 in respect of purchase of agricultural land for Rs. 5,20,050/- which is stated to be out of the amount of Rs. 9,17,000/- received upto 26-06-2006 as per the earlier agreement to sale dated 18- 03-2006. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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