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TMI Blog2005 (10) TMI 64X X X X Extracts X X X X X X X X Extracts X X X X ..... ally irrelevant. - we do not see any merit in these appeals and the same are dismissed - Tax Case(A) No.985 of 2005 and Tax Case (A) No. 986 of2005 - - - Dated:- 26-10-2005 - Judge(s) : P. D. DINAKARAN., N. KANNADASAN. JUDGMENT The judgment of the court was delivered by P.D. Dinakaran J.-The above tax case appeals are directed against the order of the Income-tax Appellate Tribunal in W.T.A. Nos. 12 and 13/Mds/2004, dated March 7, 2005. The Revenue is the appellant. The assessment years involved are 1997-98 and 1998-99. The assessee filed returns of wealth admitting the wealth of Rs, 15,000 and Rs. 25,000. He owns 2.25 acres of agricultural land within the Corporation of Tirunelveli and its value is Rs. 78,75,000. The assessee cl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ealth-tax Act. On further appeal to the Income-tax Appellate Tribunal by the Revenue, the Tribunal found that it is the discretion of the assessee to use the land in the way he likes and the Assessing Officer cannot recommend the user of the land, which was owned by the assessee to a particular use. The Tribunal also found that admittedly, the land in question is an agricultural land, as on the date of valuation, it was not put to commercial use and there was no construction at all and dismissed the appeal. Aggrieved against the same, the Revenue has preferred these appeals raising the following substantial question of law: "Whether, in the facts and circumstances of the case, the Tribunal was right in holding that the value of 2.25 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income-tax Appellate Tribunal has also accepted the view taken by the Commissioner of Income-tax (Appeals) in excluding the value of the land in the wealth-tax assessment of the assessee for the relevant assessment years. From the plain reading of section 54B of the Income-tax Act, 1961, it is clear that to claim the benefit of this provision, the following conditions are required to be satisfied: (i) the capital gain must arise from the transfer of land which, in the two years immediately preceding the date on which the transfer took place, was being used by the assessee or his parent for agricultural purposes; and (ii) the assessee must have purchased the land within a period of two years after the sale of the above land for being use ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the claim. Even the records of the Income-tax Department showed that the assessee had declared agricultural income from this land in her returns for the preceding two years. The land being located in a commercial area or the land having been partially utilised for non-agricultural purposes or that the vendees had also purchased it for non-agricultural purposes, were totally irrelevant considerations for the purposes of application of section 54B. It is seen from the aforesaid decision that the agricultural land sold by the assessee with an intent to purchase another land within two years had also been permitted to claim exemption under section 54B of the Income-tax Act 1961. In the instant case, even though there was no sale as such, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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